Which model depicts internationalisation as a gradual process with increasing commitment?

Which model depicts internationalisation as a gradual process with increasing commitment?

• A. Stages model
• B. Uppsala model
• C. Network internationalisation model
• D. Market entry model

Answer: (A)

The Uppsala model is the correct choice, as it illustrates how companies gradually increase their international involvement over time. The model posits that firms start their internationalization process by entering markets that are geographically and culturally closer, which involves lower risk. As they gain more experience and knowledge about foreign markets, they gradually commit more resources and may expand further afield or into more complex market environments. The essence of the Uppsala model lies in its emphasis on learning and experiential knowledge. Companies begin with low-risk entry modes, such as exporting, and as their understanding and commitment grow, they move towards higher-risk modes like foreign direct investment. This step-by-step approach addresses the uncertainties and challenges associated with entering new markets. In contrast, the stages model may suggest a similar progression but lacks the empirical support and theoretical framework provided by the Uppsala model. The network internationalization model focuses more on relationships and networks rather than a gradual increase in commitment. Finally, the market entry model broadly addresses the various strategies for entering foreign markets but does not emphasize the gradual process central to the Uppsala model.

The Uppsala model is the correct choice, as it illustrates how companies gradually increase their international involvement over time. The model posits that firms start their internationalization process by entering markets that are geographically and culturally closer, which involves lower risk. As they gain more experience and knowledge about foreign markets, they gradually commit more resources and may expand further afield or into more complex market environments.

The essence of the Uppsala model lies in its emphasis on learning and experiential knowledge. Companies begin with low-risk entry modes, such as exporting, and as their understanding and commitment grow, they move towards higher-risk modes like foreign direct investment. This step-by-step approach addresses the uncertainties and challenges associated with entering new markets.

In contrast, the stages model may suggest a similar progression but lacks the empirical support and theoretical framework provided by the Uppsala model. The network internationalization model focuses more on relationships and networks rather than a gradual increase in commitment. Finally, the market entry model broadly addresses the various strategies for entering foreign markets but does not emphasize the gradual process central to the Uppsala model.