What is a key concept in the Uppsala Model?

The Uppsala Model is a theory that describes how firms gradually increase their international involvement. A key concept of the model is incremental internationalization, which suggests that companies expand into foreign markets in a step-by-step manner rather than committing significant resources to a new market all at once. This approach allows businesses to learn about the foreign market progressively, gaining knowledge and experience that can reduce risks associated with international operations.

Through this incremental process, firms typically begin by entering markets that are geographically or culturally closer to their home base, gradually moving to more distant and unfamiliar markets as they gain confidence and expertise. This contrasts sharply with the idea of entering a foreign market through immediate large-scale investment or taking risks associated with random market selection, which do not align with the gradual and methodical approach that characterizes the Uppsala Model.