1. Critically evaluating and comparing two internationalization theories that are the Uppsala Model and Casino Model
Uppsala Model
The Uppsala model has been first outlined by Jan Johanson’s and Jan-Erik Vahlne in the year 1977. The internalization process of the firm is widely defined by making use of a theory which is known as the Uppsala Model. The organization ensures making low market commitments while entering the market for the first time. In the new era of globalization, most of the companies ensure in making use of this model for getting the desired results in the upcoming future. In order to emphasize the latest trending changes, this model is being used for making the adaptation of changes simpler and easier. It integrates into nurturing the business in the familiar environment as it is one of the risk-averse methods. Thus, it can be evaluated that the process of internationalization gets broadened by making use of this model. As per the critical suggestion of Dow et al., (2018), the Uppsala model enhances in creating inertia for extending the managerial intentionality.
Figure 1: Uppsala Model
(Source: Dow et al., 2018)
The decision-making process for the venture becomes relatively easy with the application of this model. Management from the top level to the down level becomes relatively easier and reliable with the adaptation of the above-mentioned model. It can be said that subsequent development in the various fields that enhance growth can be ascertained by the application of this model. Various researchers of the companies enhance in making experience that clear knowledge about the market in order to remain sustainable in the global economy can be achieved with the help of this model. On the contrary to the above view, Forsgren (2016) mentioned that the implications of the business network, as well as entrepreneurship, could be clearly depicted by the application of the techniques of the Uppsala model. The model facilitates its own beliefs and preconceptions by emphasizing in size as well as the inchoate pool of information.
Casino Model
The choice of the international market, as well as the modes of new entry during the international expansion of the firm, the Casino model is used for the generation of better decisions. It widely focuses on the exemption through increasing the shares for an organization. The Swedish large Multinational companies make use of this model for the generation of the desired results. This model results in optimally using the available capabilities as well as the resources for the establishment and the management of the organization. The model enhances in reducing the marginal cost associated with the business activities as well as the results in the reduction of the amount of risk for ensuring better and profitable results. As per the critical suggestion of Neubert (2018), the impact of digitalization on internationalization has been ascertained due to the application of the casino model.
The international process of business becomes smooth by the reduction of the associated, which can be facilitated with the help of this model. It can be said that the reduction in the amount of risk enhances in ensuring more chances of profit for the venture. The performance of the single project is not to determine, whereas the performance of the entire project is determined by the applications of the above model. Emphasis has been made to bring about different experimental innovations in the foreign markets with the adaptation of the above model. It can be said that the model ensures in depicting a clear image regarding the economic growth of the organization by reducing the chances of risk that may affect the performance of the organization. On the other hand, García-Álvarez et al. (2019) mentioned that the pattern of the organization gets completely changed due to the adaptation of the internationalization model for driving better economic developments. [Referred to as appendix 1].
2. Applying theory to context with real-life examples
Uppsala model -Tata consultancy
The professional business service firms enhance in bringing internationalization through the use of the Uppsala model. It can be said that the core performance of the organizations can be improved through the application of this model. For example – the Tata consultancy of Sweden makes use of the Uppsala model for internationalizing the firm. The net entry in the global market that belongs to the same industry often biomes a greater threat to the organization. As a result, it becomes the priority of the venture to opt for several advertising strategies that result in ascertaining the competitive advantage in the global ecopnp0my. The model is being used by Tata consultancy to have in-depth economic growth in the upcoming years for remaining sustainable in the global economy. The organization enhances making several investments in the market for the benefits of the customers in order to meet their demands. As per the critical recommendation of Cruz et al., (2017), the Uppsala model is being used by the Tata consultancy to manage the diversity of the business.
The organization has resulted in increasing the market shares for improving the internationalization process in the modern era for achieving a competitive advantage. It facilitates the corporate internship programs in order to provide adequate knowledge to the individuals reading the activities of the organization. Therefore, the growth of the organization widely depends upon the facts that facilitate opportunities for other individuals to get better performance. However, various job understanding facilities are being provided to the individual for motivating them to achieve the organizational goals with the required timeframe. On the contrary to the above view, Yamin and Kurt (2018), the review of the international market becomes easier as well as simpler with the use of the Uppsala model of internationalization.
Casino model- Volvo Company of Sweden
Volvo company of Sweden makes use of the casino model, which is one of the other alternatives of the Uppsala paradigm. The model results in uncovering a number of a different number of new research issues based on the internationalization process. Hence, it can be said that under the condition of environmental uncertainty as well as partial ignorance, Volvo is able to make the strategic decision with the use of the Casino model. Therefore, the model results in mapping the foreign sales as well as the manufacturing activities of the chosen company. The management, as well as the different kinds of activities, are shaped for better and efficient results in the upcoming future.
The model facilitates an observation pattern for international growth that helps in becoming develop for the organization into a stable condition. Hence, an appropriate chain has been established within the different activities of the Volvo that ensures in determining a better expansion of the shares. As per the critical recommendation of Håkanson and Kappen (2017), the market entries are being evaluated individually based on the stand-alone merits, which are considered to be one of the most important factors of the Casino model. It can be said that monitoring individual performance often results in identifying the individual weaknesses that are required to implement change for getting the desired objectives.
Figure 2: Casino model of Volvo
(Source: Håkanson and Kappen, 2017)
The above figure results in evaluating the condition of the Volvo company with the adaptation of the casino model for recent years. The recent era of globalization has resulted in becoming more complicated; therefore, the chances of being sustainable on a long-term basis are relatively riskier. The adoption of the internationalization model integrates into having appropriate management of the activities by reducing the association of risk. On the contrary to the above view, Neubert (2018) opined that technology innovation has resulted in bringing innovation as well as digitization among the organization for getting the required perspectives.
3. Conclusion
It can be concluded that in today’s business economy, the Uppsala model is still relevant for the expansion of the business internationally. The challenges faced in the expansion of the market can be reduced by the use of this model. The study has facilitated the use of the Uppsala model in the Swedish Tata consultancy for having extensions of the market. The organization has been successful in facilitating expansion in the current era of globalization due to the adoption of such a model. The era of modern globalization has resulted in making the market more competitive. Therefore, this model enhances in reducing the barriers by explaining the nature of internationalization.
In order to capture the benefits of experiential learning as well as permit them, the commitment of sufficient resources is being used by modern companies. The model is being used by modern organizations on the basis of understanding the relevant opportunities for the making of far-reaching commitment decisions. The model further aims at driving significant changes for the companies by reducing the implications of managerial behavior. Therefore, it can be said that the challenges and barriers enhance the creation of different kinds of opportunities for modern ventures. The modern companies enhance in addressing the different types of partial ignorance as well as the uncertainty with the use of the Uppsala model of internalization. The expansion process in foreign markets becomes easier with the adaptation of the above-mentioned model.
Reference list
Cruz, E.P., Ramos, C., Falcao, R.P.D.Q. and Amaral, S.S., 2017. The Uppsala model as an attempt to explain the Brazilian immigrant ventures in Orlando, Florida. Journal of Business Diversity, 17(1), pp.79-92.
Dow, D., Liesch, P. and Welch, L., 2018. Inertia and managerial intentionality: Extending the Uppsala model. Management International Review, 58(3), pp.465-493.
Forsgren, M., 2016. A note on the revisited Uppsala internationalization process model–the implications of business networks and entrepreneurship. Journal of International Business Studies, 47(9), pp.1135-1144.
García-Álvarez de Perea, J., Ramírez-García, C. and Cubo-Molina, D., 2019. Internationalization business models and patterns of SMEs and MNEs: A qualitative multi-case study in the agrifood sector. Sustainability, 11(10), p.2755.
Håkanson, L. and Kappen, P., 2017. The ‘casino model’of internationalization: An alternative Uppsala paradigm. Journal of International Business Studies, 48(9), pp.1103-1113.
Neubert, M., 2018. The impact of digitalization on the speed of internationalization of lean global startups. Technology Innovation Management Review, 8(5).
Neubert, N., 2018. SMES perception on the impact of digitalization on internationalization. In Proceedings of.
Yamin, M. and Kurt, Y., 2018. Revisiting the Uppsala internationalization model. International Marketing Review.
Appendix
Appendix 1: Three models of the internationalization process
(Source: Håkanson and Kappen, 2017)
