The Development of the Uppsala Model : A Study of Samsung Electronics

University essay from Lunds universitet/Centrum för öst- och sydöstasienstudier

Abstract: Based on an explorative case study approach, this thesis investigated whether the Uppsala model functioned in Samsung Electronics Corp. (SEC) case. The purpose of this study was to upgrade the Uppsala model by using a representative case of SEC. This thesis found that there are two dimensions derived from the Uppsala model. The first dimension is the sequential nature of the internationalization process in terms of psychic distance (from the market with close psychic distance to the market with remote psychic distance). The second dimension is a “market commitment” dimension, which means the form of market operation established from low-level commitment to high-level commitment. Two hypotheses derived from the two dimensions of the Uppsala model will be applied in SEC case. The first hypothesis is that the shorter the psychic distance between SEC’s home environment and target markets, the earlier will SEC establish foreign activities in those markets and vice versa. This hypothesis will be tested on a the macro-level with regards to the geographical distribution of Korean outward FDI and will be tested again during the internationalization process of SEC in two target markets-China and the US, to estimate how psychic distance functioned in SEC internationalization process. The second hypothesis will be tested by SEC’s actual operations in Europe. The conclusion will summarize the whole study, discuss research questions and provide some suggestions for future studies on the internationalization process of firms.

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