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Uppsala Model Of Internationalization

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Motives of Internationalisation Firms who invest in the foreign markets often have the same reasons for expanding its operations within its home country. According to Dunning and Lundan (2008), there are four main intrinsic motives why firms become multinationals. The categories are efficiency-seeking, resource-seeking, strategic asset-seeking and market-seeking. Efficiency-seeking firm’s intention is to essentially decrease their tax load by operating in tax havens countries, such as the Bermuda and Caymans. Secondly, resource-seeking firms emphasizes on low-cost productions, skilled labour or raw materials in foreign subsidiaries. Sometimes foreign facilities are able to find much superior yet less costly access to resources compared to …show more content…

The Uppsala model is known as the progressive model explaining how firms succeed in learning and receiving knowledge during their operations in foreign markets. The Uppsala model is about taking slow, incremental steps towards international business development depends on a series of incremental choice (4). The two basic tools of internationalisation are the stage and change aspects. The stage aspects are the knowledge of foreign markets as well as the market commitments. The commitment decision and business activities will likely affect the subsequent change aspects. Therefore, an increased in market knowledge and commitment will transform into the commitment decision to increase events in foreign market …show more content…

This can be explained through the Flying Geese (FG) Paradigm created by Akamatsu (1962). The FG model explains the catching up process of industrialization in latecomer economies. The pattern of industrial development in transmitted from a lead goose (Japan) shifts further away from labour-intensive production to more capital-intensive activities, by shedding its lower productivity goods production to the follower geese (NIEs, ASEAN 4, China). This industrialization has been enabled by the ‘pro-trade-oriented FDI’ mechanism

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