Uppsala Model

INTRODUCTION

1

Graduate Business School

School of Economics and Commercial Law

Gцteborg University

THE INTERNATIONALIZATION PROCESS

OF E-COMMERCE COMPANIES

A CASE STUDY ON BOKUS, BOXMAN,

DRESSMART & LETSBUYIT

Marcus Ekstrцm and Christine Persson

INTRODUCTION

2

Graduate Business School

School of Economics and Commercial Law

Gцteborg University

International Management

Masters Thesis 1999:22

THE INTERNATIONALIZATION PROCESS OF

E-COMMERCE COMPANIES

A CASE STUDY ON BOKUS, BOXMAN,

DRESSMART & LETSBUYIT

Marcus Ekstrцm and Christine Persson

INTRODUCTION

3

Graduate Business School

School of Economics and Commercial Law

Gцteborg University

ISSN 1403-851X

INTRODUCTION

4

ABSTRACT

This thesis was initiated because of the new and fast growing environment

that attracts more and more companies to do business electronically - the

Internet. The question that was raised was how e-commerce companies are

internationalizing into new countries, and why they go about in a certain

way. Using the Uppsala-model and its operationalizations as a theoretical

framework, four case studies were conducted. The companies studied were

Bokus, Boxman, Dressmart, and LetsBuyIt.

In the study it was concluded that the Uppsala-model and its operationalizations

could not alone describe and explain the internationalization

process of the case companies. These companies seem to operate in a

hyped environment and three factors, capital, external knowledge, and

homogenization influencing them to behave in another manner than

suggested by the Uppsala researchers, were found.

The main findings were that the companies moved very quickly from

country to country, and that they took rather radical and direct first

initiatives when entering foreign markets. The study also showed that the

case companies internationalized to countries with increasingly higher rates

of psychic distance. Other more rational factors such as Internet penetration

and market potential also influenced the choice of countries entered.

Keywords: Internet, e-commerce, internationalization process, Uppsalamodel,

establishment chain, psychic distance, Bokus, Boxman, Dressmart,

and LetsBuyIt

INTRODUCTION

5

FOREWORD

The concept of "the new economy", launched by the sociologist

Manuel Castells, is the object of almost daily debates in the

media: is

there really something radically new or is it the same old economy

dressed in slightly different clothes?

Regardless of what the answer will be on macro level, there is no

doubt that the introduction of IT and recently the Internet has drastically

changed the environment for the individual company. Hence, new ways of

doing business have been, and will be, invented. This is clearly mirrored in

this thesis on the internationalization processes of the four leading Swedish

e-commerce companies. The phenomenon of internationalization has long

been a topic of great interest and relevance to those interested in the field

of management - both researchers and students as well as practitioners.

The results of this thesis make it clear, we will all have to re-think what we

thought we knew.

GRI, 00-01-07

Jan-Erik Vahlne

INTRODUCTION

6

ACKNOWLEDGMENTS

During the past months we have had the opportunity to investigate

an extremely interesting and yet fairly unexplored topic - the

internationalization process of e-commerce companies. Along the

way we have met several knowledgeable and helpful persons

to whom we are of course very grateful.

We would here like to express our gratitude to our interviewees Jerker

Nilsson at Bokus, Anders Karlberg at Boxman, Annika JÐ'rund and Martin

Geber at Dressmart, and Michael Freudenthal at LetsBuyIt - you made this

thesis possible by letting us come under the surface of your companies.

We would also like to give our special thanks