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Criticism of the Uppsala Model
Since the Uppsala model was presented in 1977 there have been various criticisms of the theory. One criticism is that the model is too deterministic. Other criticism related to the Uppsala model is that the model doses not take into account interdependencies between different country markets.
There have been many empirical tests related to the Uppsala model and the studies have shown that the internationalisation process model is not valid for service industries. Others have claimed that companies have lately seemed prone to leap-frog stages in the establishment chain, entering 'distant' markets in terms of psychic distance at an early stage. The internationalisation process generally seems to have speeded up. In 1990 Nordstrom made a test that confirmed this criticism. Countries like the UK, Germany and the USA have become more comment market for the first establishment of sales subsidiaries by Swedish companies than their Scandinavian neighbours.
"The leap-frogging tendency not only involves entering distance markets". A company can also leap-frog some intermediate entry modes in order to move away from the sequentialist pattern and more directly to some kind of foreign investment.
Other criticism stated is that the Uppsala school is not valid in situations of highly internationalised companies and industries. "In these cases, competitive forces and factors override psychic distance as the principal explanatory factor for the firm's process of internationalization". If knowledge of transactions easy can be transferred from one country to another, companies with international experiences are likely to perceive the psychic distance to a new country shorter than companies with little international experiences.
According to Nordstom, 1990 the world has become much more homogenous and that has lead to that psychic distance has decreased. As a result of this, resent starters can enter directly into large markets that are close to Sweden in a culture sense.
It has developed a market for knowledge about foreign markets. It is now possible to buy knowledge about legal and financial standards from international accounting companies and investment banks. Which make it easy to gain information about competitors, market potential, distribution system and possible entry modes. Companies have also quicker and easier access to knowledge about doing business abroad. It is no longer necessary to build up knowledge 'in-house'.