Explain Uppsala model shortcomingsSolutionThe Uppsala Intern

Explain Uppsala model (shortcomings)?

Solution

The Uppsala Internationalization model does not give importance to the incentive given to management and the effect of these incentives on decision making which may be a deciding factor in the model, or when sequential four steps of market entry were introduced, other forms of market entries which are difficult to place on the model’s scale were ignored, such as franchising given by a firm is a relatively less risky market entry option and create the opportunity to increase market coverage and dominance. On other limitation of the model is that it fails to discuss the logic behind foreign direct investment and why should it be desired for ultimate market operation, or why should/would companies follow that step development. For example, there is an apprehension that why export could be not the final step in the process of internationalization in the model.

In last 2 decades with vast improvement in technology and communication has changed the business processes enormously. The regional groupings has also affected the process of internationalization. Emerging economies such as China, India, Brazil and Russia are contributing big in the international trade as well reduction of barriers to world trade through WTO, IMF and various trading groups and agreement. The regional structure and de-territorialisation has changed the consumer behavours and market situation