Uppsala Internationalization Model (Johanson & Vahlne, 1977)

Overview

The Uppsala Model explains internationalization as a gradual, path-dependent process driven by experiential learning. Firms enter foreign markets incrementally, starting with psychically close countries (similar language, culture, institutions) and progressing through an establishment chain: no regular export, export via agent, sales subsidiary, production subsidiary. Each stage builds market knowledge that enables the next commitment.

When to Use

Trigger conditions:

• User is planning a staged international expansion strategy
• User asks which foreign markets to enter first and in what order
• User needs to evaluate the pace and sequence of internationalization
• User mentions "psychic distance", "gradual internationalization", "Uppsala", or "establishment chain"

When NOT to use:

• For firms that internationalize rapidly from inception -> use grad-born-global
• For FDI mode selection (OLI-based) -> use grad-oli
• For national competitive advantage assessment -> use grad-diamond