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CCSM
24,4 Parachuting internationalization:
a study of four Scandinavian
firms entering China
554 Tony Fang
Stockholm Business School, Stockholm University, Stockholm, Sweden
Received 21 February 2016
Revised 27 August 2016 Rosalie L. Tung
15 December 2016
Accepted 27 March 2017
Beedie School of Business, Simon Fraser University, Burnaby, Canada, and
Linda Berg and Nazanin Nematshahi
Stockholm Business School, Stockholm University, Stockholm, Sweden

Abstract
Purpose – The purpose of this paper is to propose a “parachuting internationalization” metaphor as an
alternative strategy that firms may choose to enter foreign markets compared to Uppsala Model and
Born Global Model. This proposed new metaphor seeks to integrate the Uppsala and the Born Global Models
to show that firms can attain success in the age of globalization if they are adept at devising creative
strategies that help them overcome the challenges in a psychically distant environment.
Design/methodology/approach – This is a research paper that develops theoretical perspectives inspired
by the Yin Yang thinking as well as the “thick descriptive” multiple case studies.
Findings – “Parachuting internationalization” embraces essential elements of the Born Global and the
Uppsala Models and refers to a firm’s strategic targeting of markets with great potentials, correct positioning,
swift actions, and fast learning, thus enabling the firm to circumvent the conventional wisdom of liability of
foreignness, cultural distance, and psychic distance. “Parachuting internationalization” is essentially a
GLOCAL approach which can be implemented in practice in terms of global vision, location, opportunity,
capital, accelerated cultural learning and quick action, and logistics.
Research limitations/implications – The “parachuting internationalization” metaphor is derived from
interviews with four Scandinavian firms’ experiences that have entered into the Chinese market.
This research reveals that two seemingly opposite approaches, i.e., the Born Global and the Uppsala Models,
can be fruitfully combined and reconciled to generate a third novel approach.
Originality/value – To date, there has been little attempt to reconcile and/or integrate the Born Global and
the Uppsala Models of internationalization. The paper enriches the ongoing debate on the internationalization
of firms in the international business literature that has relied primarily on the Uppsala Model or Born Global
Model. The study shows that a third way, i.e. the “parachuting internationalization” is both theoretically
innovative and practically feasible.
Keywords China, Uppsala Model, Yin Yang, Born Global Model, GLOCAL,
Parachuting internationalization
Paper type Research paper

This is a very exciting time in the world of information. It’s not just that the personal computer has
come along as a great tool. The whole pace of business is moving faster. Globalization is forcing
companies to do things in new ways (Bill Gates).

Introduction
Globalization inspires firms to internationalize in unconventional ways. Far-reaching
changes have taken place in the global economic environment such as the liberalization of
cross-border markets, the emergence of the digital revolution, and technological
Cross Cultural & Strategic
breakthroughs, etc. (Dunning, 1998, 2009). In turn, these changes have contributed to
Management “boundarylessness” in cultural learning, knowledge transfer, and synchronized information
Vol. 24 No. 4, 2017
pp. 554-589
© Emerald Publishing Limited The authors would like to thank Dina Chimenson for helping with the latest updates about the
2059-5794
DOI 10.1108/CCSM-02-2016-0041 case companies.
sharing across nations and peoples, thus creating unprecedented opportunities for firms to Study of four
conduct business on a global scale (Levitt, 1983). The age of globalization[1] and the internet Scandinavian
have enabled firms, including latecomers, to accelerate foreign market entry to achieve firms entering
international and global success (Luo and Tung, 2007).
The two dominant approaches to explain how firms internationalize in overseas markets China
are the Uppsala Model and the Born Global Model. The Uppsala Model essentially posits an
incremental approach to internationalization, progressing from countries with the least to 555
the greatest psychic distance between the home and host markets (e.g. Johanson and
Wiedersheim-Paul, 1975). The Born Global Model (e.g. Knight and Cavusgil, 1996)
challenges the stepwise Uppsala theory by arguing that “it is possible to succeed in world
markets without an established domestic base” (Rennie, 1993, p. 45). In other words,
Born Globals with limited resources can be “international from inception” and can “compete
successfully in the international arena” (Oviatt and McDougall, 1994, p. 46) by “foreign
customer focus” (Knight et al., 2004, p. 645). Cavusgil (1994, p. 18) went so far as to declare
that “gradual internationalization is dead.”
To date, there has been little attempt in the international business literature to reconcile
and/or integrate the aforementioned two approaches to internationalization. Despite the
obvious appeal of the Born Global Model in an age of rapid globalization where firms with
little or no prior international experience have successfully penetrated foreign markets,
assertions of the demise of the incremental approach may be premature and ill-informed.
The tendency to move from one extreme to the other in theory building such as that from the
Uppsala Model to the Born Global Model exemplifies a fundamental methodological
weakness that stems from “the lack of ability given the methodology of logical analysis
rooted in the epistemology of rational reductionism and the ontology of realism-idealism
separation, all of which are dominant in the West” (Li, 2012, p. 73). Research shows that
purely Born Global companies do not exist if firm-, region-, and/or country-specific
characteristics are taken into account (Hewerdine, 2008; Lopez et al., 2009; Rugman and
Verbeke, 2004, 2008). In other words, aside from espousing a global vision, global firms need
to possess capabilities and competencies that will enable them to undertake meticulous
step-by-step planning and country-specific local market analysis. Therefore, it is necessary
to think in terms of hybridity (Chetty and Campbell-Hunt, 2004) to reconcile and/or combine
both models to adequately capture the dynamics of the internationalization processes.
In this paper, we propose a “parachuting internationalization” metaphor as an alternative
strategy that firms may choose to enter foreign markets. This metaphor seeks to integrate
the Uppsala and the Born Global Models to show that firms can attain success in the age of
globalization if they are adept at devising creative strategies that help them overcome the
challenges in a psychically distant environment. In this paper we propose a “parachuting
internationalization” metaphor as another strategy that firms may choose to use to enter
foreign markets. “Metaphors craft our thinking in distinctive ways” (Fang, 2005-2006) and
metaphors are also used to study management and organization, culture, and international
business strategy (e.g. Kao, 1997; Luo and Tung, 2007; Morgan, 1986).
The fundamental research question to be addressed in this paper is:
RQ1. How do firms undertake internationalization in the age of globalization?
The research is informed by in-depth case studies of four Scandinavian firms’ foreign
market entry into China. The “parachuting internationalization” metaphor, to be discussed
in detail later in this paper, has been inspired by the thick description provided by some of
the respondents in this study as well as from “parachuting” jumps in recreational sports
and/or military operations.
By drawing on the Yin Yang (i.e. holistic, dynamic, and dialectical) perspective
(presented in a subsequent section entitled “Understanding culture in globalization” and
CCSM “Embracing paradox”), we use the “parachuting internationalization” metaphor to
24,4 embrace the two seemingly contradictory Born Global Model and Uppsala Model into an
integrative framework to better understand the emerging trend of how firms pursue
internationalization in the age of globalization. This is where this research
contributes innovatively to the extant literature on foreign market entry strategies that
have practical implication (see under “Conclusion”).
556 Parachuting internationalization does not ignore cultural differences; rather it tackles
them in the light of cultural paradox (Osland and Bird, 2000), cultural learning, and cultural
balancing (Fang, 2012) in the context of boundarylessness in the global business
environment. In this paper, the Born Global Model vis-à-vis the Uppsala Model debate is
discussed in the context of research on cross-national culture[2].
In the rest of this paper, we will review the extant literature and present the
research methodology. A detailed presentation of four company cases will follow.
Finally, we conclude the paper by discussing the theoretical and practical implications as
well as identify topics for future research.

Literature review
The Uppsala Model
During the 1970s, following earlier research on internationalization of the firm (e.g. Carlson,
1966, 1975; Hörnell et al., 1973), Johanson, Wiedersheim-Paul, and Vahlne at the University of
Uppsala presented a theory on the internationalization process of Swedish multinational
manufacturing firms in two studies ( Johanson and Vahlne, 1977; Johanson and
Wiedersheim-Paul, 1975). They identified two basic patterns associated with a firm’s
internationalization process: first, firms start their internationalization process by investing
only in one or a few neighboring countries. Second, when entering a country, the investments
are done in a very cautious and incremental way (e.g. from export, agency, subsidiary, and
finally, to foreign production/manufacturing) to ensure that organizational learning and
experience can be acquired before entering new markets with greater psychic distance.
Despite its popularity and appeal, the Uppsala Model has been criticized (Andersen, 1993;
Forsgren, 2002; Forsgren and Hagström, 2007; Hadjikhani, 1997; Turnbull, 1987). Studies have
shown that firms can take “short-cuts” by acquiring knowledge from other firms through
imitative learning or hiring skilled professionals with the specific knowledge base the firm is
looking for (Barkema and Vermeulen, 1998; Haunschild and Miner, 1997). While the Uppsala
Model is premised on the exploitation aspect of organizational learning (March, 1991), it has
adopted a rather narrow and static interpretation of learning by focusing solely on the focal
firm and its experiential learning without giving due consideration to the fact that learning
and knowledge about foreign markets can be acquired through relationships and networks
with other actors in the markets (Andersson et al., 2002). Moreover, firms can accelerate the
pace of internationalization through acquisition of indigenous or other foreign firms that
already possess the necessary country-specific knowledge and skills (Huber, 1991;
Barkema and Vermeulen, 1998; Forsgren, 2002). As such, firms do not necessarily have to
go through the entire incremental and experiential learning themselves (Levitt and
March, 1988; Hansen, 1999) in terms of the four-stage sequence posited by Johanson and
Wiedersheim-Paul (1975); instead, they can “stage-skip,” “leapfrog,” and “springboard” in their
internationalization processes (Luo and Tung, 2007).
In response to these criticisms, several changes have been made to the Uppsala Model
(see Johanson and Vahlne, 1990, 2003, 2006), including learning achieved not only by
the focal firm but through the expertise/experience of its partners/networks. Indeed, if the
concept of learning is broadly interpreted to embrace relationships and networks in
the global marketplace, the Uppsala Model and the Born Global Model can then be
integrated. Despite limitations, the contributions of the Uppsala Model to
internationalization theories remain as the fundamental concepts on which the model is Study of four
based remain intact and insightful. These include the notions of “risk,” “planning and Scandinavian
decision making,” “position,” “knowledge development,” “opportunity,” “resources,” firms entering
“commitment,” and “learning” ( Johanson and Vahlne, 1977, 1990, 2003, 2006, 2009;
Johanson and Wiedersheim-Paul, 1975) which can be found in our empirical case studies China
(see section entitled “Case descriptions”).
557
The Born Global Model
With increasing globalization, since the mid-1990s, the field of internationalization of the firm
has witnessed the emergence of the Born Global Model that “presents an important new
challenge to traditional internationalization theory” (Knight and Cavusgil, 1996, p. 17). The Born
Global thinking has been presented under various names/terms such as “Born Globals”
(Knight, 1997; Knight and Cavusgil, 1996, 2004; Madsen and Servais, 1997; Rasmussen et al.,
2001; Rialp et al., 2005; Rundh, 2007), “International New Ventures” (McDougall et al., 1994;
McDougall and Oviatt, 1996, 2000; Oviatt and McDougall, 1994, 2005a, b), “Instant
Internationals” (Preece et al., 1999), “International Entrepreneurs” (McDougall and Oviatt,
2000), and “Global Start-ups” (Oviatt and McDougall, 1994, 1995), and so on.
The Born Global Model asserts that firms can espouse a global vision from its inception
to achieve competitive advantage by making active use of global resources.
The “Born Global” firms are typically technology-oriented small- and medium-sized
enterprises (SMEs) that view the entire world as one single market from the start; as such,
they do not follow the sequential pattern advanced by the Uppsala Model. They leapfrog the
early stages and embark on internationalization in an aggressive manner (Chetty and
Campbell-Hunt, 2004; Knight and Cavusgil, 1996, 2004; Rennie, 1993). This line of thought
paved the way for an emerging research area of international entrepreneurship that reflects
the fusion of entrepreneurship with international business (McDougall and Oviatt, 2000)
where “the speed of internationalization” (Oviatt and McDougall, 2005a, p. 537) and
“accelerated internationalization” (Mathews and Zander, 2007) are emphasized.
At the core of the Born Global Model is customer focus as “a key driver” of
product quality, marketing orientation, and product differentiation in Born Global firms
(Knight et al., 2004, p. 654). The customer focus orientation allows Born Global firms to
concentrate their resources to serve markets and avoid head-on resource-draining
competition with large MNEs (Knight et al., 2004).
While the Born Global Model vis-à-vis the Uppsala Model debate has centered around the
notion of whether it is possible to bypass stages in the internationalization process, few
studies in both models have couched the debate in the context of understanding cultural
dynamics in the age of globalization. Indeed, culture has been by and large sidelined in the
Born Global Model. Most studies concerning culture, if any, tend to adopt unquestioningly
the liabilities associated with cultural distance (see review by Stahl and Tung, 2015), without
due consideration to the possibilities of stage-skipping, leapfrogging, and springboarding in
internationalization. The failure to consider the concept of culture from a dynamic
perspective represents a limitation of the Born Global paradigm.

Understanding culture in globalization

Hofstede’s (1980) paradigm has dominated research on culture in international business context
for decades. Three constructs that have received much attention in the internationalization
literature – “psychic distance” ( Johanson and Vahlne, 1977), “cultural distance” (Kogut and
Singh, 1988), and “liability of foreignness” (Hymer, 1976; Zaheer, 1995) – are all associated with
Hofstede’s (1980) paradigm.
Psychic distance encompasses factors such as “differences in language, culture, political
systems, level of education, level of industrial development, etc.” ( Johanson and
CCSM Wiedersheim-Paul, 1975, pp. 307-308). The construct of cultural distance “is derived from
24,4 the indices of Hofstede (1980)” (Kogut and Singh, 1988, p. 412) and “cultural distance is, in
most respects, similar to the ‘psychic distance’ used by the Uppsala school” (p. 430) although
the latter is more encompassing. The concept of “liability of foreignness” refers to
“all additional costs a firm operating in a market overseas incurs that a local firm would not
incur” (Zaheer, 1995, p. 343). Psychic distance is positively correlated with liability of
558 foreignness: “The larger the psychic distance the larger is the liability of foreignness”
( Johanson and Vahlne, 2009, p. 1412).
Hofstede’s paradigm “is essentially a pre-globalization and pre-Internet phenomenon”
(Fang, 2012, p. 29), so are the associated constructs of “psychic distance,” “cultural
distance,” and “liability of foreignness.” They essentially view culture as a static
phenomenon and cultural differences as a problem. This static vision of culture has been
challenged by an increasing number of studies (Bird and Stevens, 2003; Brannen and
Thomas, 2010; Holden, 2002; Hong et al., 2000; Hong et al., 2007; Inglehart and Wayne, 2000;
Inglehart and Welzel, 2005; McSweeney, 2002).
Shenkar (2001) provided a comprehensive critique of the conceptual and methodological
limitations of the “cultural distance” construct on the basis of its assumptions of linearity,
stability, causality, and discordance. Tung and Verbeke (2010) have identified the problems
associated with the assumptions of “spatial homogeneity” within a country and cultural
differences “systematically engender negative outcomes,” two of the four masks associated
with the cultural distance construct. There is ample evidence that shows that doing business
in a nearby country with a similar culture can be just as difficult as in a distant country with a
different culture, generally known as the psychic distance paradox (e.g. O’Grady and
Lane, 1996; Fang et al., 2004). In the globalization era the divide between “foreign” and “home”
markets can be fluid; i.e., the “foreign market” can become the “home market” and vice versa.
For example, a growing number of multinationals are beginning to view China not as a
“foreign” market but as “second home” (Galvin et al., 2010; Hoover, 2006) – this emerging trend
challenges the traditional “distance” mentality.
Fang (2005-2006, 2012) has proposed a Yin Yang perspective on culture to capture the
paradoxical nature of culture in the age of globalization. Li (2016) has posited Yin Yang
balancing as an epistemological system that can be used to advance our understanding of
paradox management in the global context. The Yin Yang perspective on culture is based
on the ancient Chinese Yin Yang philosophy that espouses a holistic, dynamic, and
dialectical worldview, methodology, and lifestyle (Fang, 2010, 2012; Li, 2016)[3]. According
to the Yin Yang philosophy, any universal phenomenon embraces two seemingly opposing
yet interdependent energies, namely, Yin (“female” energy) and Yang (“male” energy).
More specifically: “1. Yin and Yang coexist in everything, and everything embraces Yin and
Yang. 2. Yin and Yang give rise to, complement, and reinforce each other. 3. Yin and Yang
exist within each other and interplay with each other to form a dynamic and paradoxical
unity” (Fang, 2012, p. 34). From the Yin Yang perspective, culture in the age of globalization
is conceptualized as “a unique dynamic portfolio of self-selected globally available
value orientations as a consequence of that culture’s all-dimensional learning over time”
(Fang, 2012, p. 25). In short, Yin Yang thinking holds potential as an epistemological system
that can embrace and manage paradoxes in different aspects of societal living and
organizational functioning “across all domains of management research” (Li, 2016, p. 42);
as such, it can be used to encompass essential elements of the Born Global and the Uppsala
Models to derive a new perspective on strategies that firms can use to overcome large
cultural/psychic distances[4].
It is important to emphasize that globalization has not rendered cultural differences as
irrelevant. Globalization, which may be better understood as “glocalization” (Robertson, n.d.,
1995, 1996), drives “a paradoxical movement of cultures” (Bird and Fang, 2009, p. 140) that
renders cultures to be both similar and different at the same time. As such, even perceived Study of four
similarities can sometimes mislead individuals and firms alike to underestimate the actual Scandinavian
cultural differences in conducting international business (Fenwick et al., 2003). O’Grady and firms entering
Lane (1996) have referred to this as the psychic distance paradox in their study of exporting
firms in the USA and Canada. China

Embracing paradox 559

There are two basic approaches to theory building: one is to develop internally consistent
theories; the other is to “[l]ook for tensions or oppositions and use them to stimulate the
development of more encompassing theories” (Poole and Van de Ven, 1989, p. 563). The latter
approach has been underutilized and needs to be encouraged in international business
research (Birkinshaw et al., 2011; Doz, 2011; Eisenhardt, 2000) as “creative insight often arises
from the juxtaposition of contradictory or paradoxical evidence” (Eisenhardt, 1989, p. 546).
Tsang and Ellsaesser (2011, p. 404) have advocated the use of “contrastive explanation,” a
form of paradoxical thinking, “in creating, broadening, and deepening their theories through
posing suitable contrastive questions.” Similarly, Smith and Lewis (2011, p. 381) have
advocated the use of a “paradox lens” to “understand and explain the tensions” to meet the
“more global, dynamic, and competitive, contradictory demands” that characterize today’s
organizational environments. Furthermore, Osland and Bird (2000) see cultural paradox as a
way of counterbalancing cultural stereotyping through context indexing.
This paper uses a paradoxical lens. More importantly, the paper has been informed by
Yin Yang (i.e. holistic, dynamic, and dialectical) thinking which has its unique advantage in
managing paradox (Li, 2016; Luo and Zheng, 2016). A Yin Yang perspective is different
from the classical Western approach to viewing paradox – the Western approach views
paradox as being made up of distinctive and exclusive opposites (Chen, 2008; Chen and
Miller, 2010; Eisenhardt, 1989, 2000; Poole and Van de Ven, 1989; Smith and Lewis, 2011).
The Yin Yang principle, on the other hand, views “opposites [as] containing within them the
seed of the other and together forming a dynamic unity” (Chen, 2002, p. 184) over time.
In short, the Yin Yang approach emphasizes the interdependence of opposites as compared
to the perspective of the independence of opposites in the classical Western approach.
For further details of the Yin Yang balancing perspective, please see Li (2016) and Luo and
Zheng (2016).
The distinguishing features associated with the Yin Yang perspective, namely, the
interdependence of opposites and the transformational unity that arise from such
interdependence, hold promise for capturing the evolving trends of internationalization in
the age of globalization. In other words, the essential ingredients of the two opposing
paradigms – namely, the global vision inherent in the Born Global Model, on the one hand;
and the emphasis on planning, knowledge, resources, commitment, basic survival tools, and
learning pertaining to the Uppsala Model, on the other hand – are not necessarily
contradictory but can complement, reinforce, and coexist within each other to generate a
fuller understanding of how firms internationalize. The key to the Yin Yang perspective is to
attain the proper balance of the opposites rather than a mere mixing of the two. To attain
this desired state, there needs to be an adequate understanding of the contextual variables
discussed later in this paper.

Methodology
For the purposes of this research, we conducted in-depth qualitative multiple case-based
exploratory study of four Scandinavian firms’ entry into China. While qualitative research
has not been widely used in international business research (Doz, 2011), it has received
growing attention because it can be a powerful tool to facilitate theory generation
(Eisenhardt, 1989; Welch et al., 2011; Eisenhardt et al., 2016).
CCSM In this paper, we have adopted a “thick descriptive” (Geertz, 1973) approach to present
24,4 our empirical data (see under “Case descriptions”) to capture the “particularistic,”
“descriptive,” “heuristic,” and “inductive” advantages associated with the strengths of
qualitative case study methodology (Merriam, 1988). In particular, “the case itself is
important” because it reveals the phenomenon, confronts specific problems, and takes a
holistic view of the situation (Merriam, 1988). Recent studies on methodology, such as
560 Byrne and Ragin (2009), Thomas (2011), Mills et al. (2010), Piekkari and Welch (2011),
Welch et al. (2011), and Birkinshaw et al. (2011) have called for diversity and plurality in case
study design to allow researchers to go beyond the dominant implicitly positivistic North
American approach to conducting qualitative case study.
China represents an interesting empirical base for examining the internationalization of
firms for two important reasons: one, the supposedly large psychic/cultural distance with the
western world, and hence, the presumed huge liability of foreignness between the investor’s
home country and that of China’s; and, two, the size of the China market and rising
consumerism in that country. Virtually, all international firms from around the world seek to
have a presence in that market. Until the recent slowdown of its economy, China has
experienced three decades of double-digit growth to catapult it to become the second or largest
economy in the world. Between 2002 and 2012, China was rated as the most attractive
destination for foreign direct investment by CEOs and CFOs from around the world and only
slipped to number 2 rank in the period 2013-2015 after the USA (see A.T. Kearney Investor
Confidence Index for miscellaneous years).
The rise of China has contributed to the reality that a growing number of international
firms view China as their “second home market” (Galvin et al., 2010; Hoover, 2006). If China
is considered a second home market, it raises an important question as to whether there is
room for psychic distance from the foreign firms’ perspective. We have chosen one Danish
and three Swedish companies for our study. Swedish companies make suitable candidates
for studies on foreign market entries because Sweden has the highest number of large
companies on a per capita basis (Birkinshaw, 2002). Nearly 600 Swedish and 300
Danish companies have established a presence in China.
Given the purpose as well as the type of research question (“How”) of this paper, a
multiple qualitative case study method based on in-depth interviews was used (Yin, 2003).
Because access to reality is a daunting challenge in the conduct of qualitative case study
research (Gummesson, 2000; Zhang et al., 2009), we decided to interview representatives
from both SMEs and MNEs who are knowledgeable about their companies’
internationalization in general and their operations in China in particular. These
representatives are thoroughly knowledgeable about their company’s overall strategy and
operations and were authorized to speak to us on behalf of their company for the purposes
of this research. Our aim was to find companies that were willing to disclose their
internationalization experience through in-depth face-to-face interviews (Cooper and
Schindler, 2006) in terms of thick descriptive storytelling.
After numerous phone calls and e-mails back and forth with many potential companies
through many contact channels, we identified three Swedish companies
(Elekta, Swedsoloringen[5], and Hästens) provided by the Swedish Trade Council in
Stockholm that met our criteria. In addition, we obtained a Danish company (Bestseller China)
through our own connections after much effort via e-mail and phone communication between
Sweden and China. We prepared a detailed interview agenda that consisted of five categories
with 38 questions (the figures in parentheses indicate the number of questions under each
category): Introduction (1), globalization (8), culture (7), internationalization process (12), and
networking and business relationships (10) (see Appendix 1).
The interviews were conducted in Swedish during April-May, 2008 in Stockholm and
Uppsala with top executives from three Swedish firms with operations in China, except for
the Bestseller case where one face-to-face interview was conducted in English in China Study of four
in 2006. Company profiles have been updated, however. These are: Elekta: Torgny Landin, Scandinavian
Global Marketing Director and Rolf Kjellström, Vice President, International Neuroscience firms entering
Sales and Marketing; Swedsoloringen: Jonathan Wikström, Founder; and Hästens: Keyu
Zheng, Country Manager China. A fourth Scandinavian company, a Danish firm, was also China
included. This is Bestseller China. The interviews with Bestseller China were conducted in
English. Allan Warburg, Co-founder of Bestseller Fashion Group (China), was interviewed 561
for this study. The interviewees are top executives directly involved in their respective
firm’s internationalization strategies. We consider these executives as competent
respondents, a principal source for conducting exploratory research (Saunders et al., 2007).
All the interviews were conducted face-to-face (each ran for one to two hours) except for
one telephone/Skype interview with Allan Warburg, Co-founder of Bestseller China, that
lasted for one hour. This latter interview was preceded by a 1.5-hour face-to-face meeting
with Allan Warburg in his Bestseller China Beijing office in Spring 2006. Two of the
co-authors, both Swedish nationals although one has a non-Swedish sounding surname,
conducted interviews with all the case study firms. Another co-author of this paper, an
ethnic Chinese who has lived for several decades in Sweden, conducted the extra interview
with Bestseller in Beijing in 2006. A week before each interview, the respondents were sent a
list of questions to be asked during the interviews to prepare them to answer the questions
in a storytelling fashion. This context-rich storytelling method provides a holistic
understanding (Moore, 2011) of the intricacies associated with the internationalization
process as it unfolds in each of the case companies. In short, this process has enabled the
respondents to reflect on crucial incidents in their experience and allowed them to delve into
details in their answers. We did not use the term “parachuting internationalization” in the
questions although it emerged as a common word/theme in all the interviews. The major
milestones in the four companies’ internationalization processes are provided in Appendix 2.
The interviews were tape-recorded and later transcribed in their entirety. In addition,
detailed notes were also made by the researchers during the interviews. Together, these
provided an accurate and comprehensive account of what was discussed in the interviews,
thus enabling us to quote a respondent’s assertions in this paper. The respondents were
informed about the purpose of this research (Bryman, 2002) and they had the option of
remaining anonymous, if they so desired. Moreover, an initial report based on the
transcripts was sent to the respondents to ensure accuracy of quotations, and so on.
Our data analysis has been processed through the thematic and pattern analysis of
keywords (Richard and Boyatzis, 1998; Miles and Huberman, 1994; Yin, 2003) that led to the
identification of five common themes (see under “Analysis: perspectives and common
themes”). We rechecked some original sources (Elekta, Swedsoloringen, and Hästens) for the
purposes of correcting unclear data that were uncovered during this paper writing process.

Case descriptions
Elekta
Elekta was founded by Professor Lars Leksell in 1972. In 2015, the company employs
3,850 employees in 28 countries. Their radiation therapy solutions for high-precision
treatment of cancer and brain disorders are used in over 6,000 clinics worldwide.
One of Elekta’s products is the “Gamma Knife” which is used in less invasive surgical
procedures for treating brain disorders. Elekta has been listed on the Stockholm Stock
Exchange since 1994. In fiscal year 2014-2015, Elekta’s turnover amounted to USD1.3 billion
with a net profit of USD66 million.
Immediately after its establishment in 1972, Elekta entered China through an agent, a
small Swedish company that helped establish Elekta in China. Professor Leksell has many
personal contacts with medical professionals in China. Through a combination of his
CCSM personal relationships and positive outlook on growth potentials of the Chinese market,
24,4 Elekta was able to successfully create a demand for its products in China. In 1992, Elekta’s
first representative office was established in Beijing.
During the 1997-1998 Asian financial crisis, Elekta substantially scaled back its
operations in Asia. The major breakthrough came in 2001 when Elekta set up a
manufacturing line in Shanghai through a majority joint venture to produce one of Elekta’s
562 core components in the linear accelerator product line. In 2002, the partner was bought out
and the joint venture became a 100 percent wholly owned operation. In 2006, Elekta
acquired Beijing Medical Equipment Institute (BMEI), a leading Chinese company that
produced domestic linear accelerators. Elekta modernized the whole manufacturing process
by applying modern management practices such as quality control and effective logistics.
Today, Elekta operates two wholly owned subsidiaries, Elekta Instrument (Shanghai) Ltd
and Elekta BMEI (Beijing) Medical Equipment Co. Ltd (Elekta, 2015, p. 121). Through the
years, Elekta has developed strategic cooperation with the Ministry of Health in China, as
well as leading hospitals, research institutions, and universities, such as Tsinghua
University, Wuhan University, and Tianjin University (Blankenburg Holm et al., 2015).
Today, China is Elekta’s second largest market where the company holds over 50 percent
of the market share in radiation therapy solutions, thus making it the market leader in that
country (Elekta, 2015, p. 27). Elekta China currently employs 530 people to make Elekta
China as the third largest operation base for the company worldwide (Elekta, 2015, p. 129).
“For Elekta, internationalization is a matter of where the customers are,” said
Rolf Kjellström, Vice President of International Neuroscience Sales and Marketing of Elekta
in his interview with us. Elekta’s customers, mainly hospitals and clinics in neurosurgery,
are a relatively homogeneous group where professionals know each other well via
networking, research publications, and the internet. This enables Elekta’s broad product
portfolio to have an extensive global reach.
The development in telecommunications technology, especially the internet, has
fundamentally changed the way in which business is conducted. In the words of Mr Kjellström:
Information is spreading effectively through networks and communication channels that
raise brand awareness at a level not possible before. Hospitals knew about Elekta before we even
entered the market.

Torgny Landin, Global Marketing Director of Elekta, also alluded to the faster-paced and
highly competitive business environment. He asserted that in order to survive in today’s
globalized environment, one needs to move faster than before and it is not as crucial for
companies to consider cultural differences as it did 20 years ago. Scandinavian companies can
enter any country they want to, regardless of geographic distance, as long as they do their
homework first and then continuously acquire knowledge through relationships with local
partners who can help them navigate through the bureaucracy and the market. Landin added:
Due to the vast development of communication technology, Nordic companies can skip steps in
their internationalization process. If something happens in China today, we will know about it
within 15 minutes and this enables companies to set aside the incremental approach.

According to Landin, Elekta did not follow an incremental approach to internationalization.

It did not first enter into the neighboring Nordic countries but rather went to China in
1972 and then the USA in 1983. Landin also said that there was “less need to use an
incremental approach because the company has many local partners that are well
established in their respective markets.”
The need for speed in entering the China market is particularly important as growing
affluence among its consumers is accompanied by increasing emphasis on health and longevity.
China’s entry into the WTO in 2001 has further facilitated the conduct of business there.
According to Landin, it is much easier for Scandinavian firms to establish operations in China Study of four
now as compared to Germany, France, and the USA since “the Chinese are very open to foreign Scandinavian
lifestyles and the Chinese government offers very generous incentives to foreign investors.” firms entering
Many regions in China, especially the southeast inland region, provide free land to technology-
based companies to establish operations in industrial parks or offer generous tax breaks for five China
years. In return, the companies have to provide jobs for the local people. This may explain why
China has been consistently ranked as the most or second most attractive country for FDI since 563
2002 despite its low ranking on the Transparency International Index.
According to Landin and Kjellström, business in China today is “highly influenced by
Western corporate practices where it is easier to communicate with government authorities as
transparent and standardised processes are now in place.” Commensurately, however,
competition in China has becoming extremely tough. A decade or so ago, virtually anything
from the West was considered good. But now the Chinese can choose among a wide variety of
Western product offerings. Today, Scandinavian companies can no longer rely solely on their
guanxi; rather, they need a combination of a unique product offering and good relationships to
become successful in China. Despite these changes, Chinese society is still characterized by
hierarchy where the boss makes all the key decisions while the job is implemented by people
with the technical knowledge who report to the boss. Sometimes, local Chinese hospitals still
encounter problems in making foreign currency purchases; this is where a foreign partner
could facilitate the deals. Chinese business people are generally well prepared before meetings
with their Swedish counterparts. At the negotiation table, the Chinese expect the Swedes to
answer all the questions and make all the decisions on site, and are not receptive to Swedes
who have to consult with their colleagues in the head office in Sweden before making a final
decision. This highlights the importance of logistics planning in advance. Fundamental
Chinese values such as guanxi and face are still important although they have taken on some
modern features. Networking, an important aspect of guanxi, takes time. As such, after-hours
socializing such as going out for dinner, drinking, and karaoke is a crucial part of the business
process. In China one does not conduct business with a company; rather, one does business
with an individual. As such, it is important to establish a lasting and trusting relationship.
At the time of the interview, Landin was convinced that China will surpass the USA to
become the world’s largest economy in 10-20 years’ time. Landin’s prediction materialized
much earlier – in December 2014, the International Monetary Fund announced that China
has become the world’s largest economy – USD17.6 trillion vis-à-vis $17.4 trillion for the USA
(Gorman, 2014). Even though the numbers 1 and 2 spot will most probably oscillate between
China and the USA in the years ahead, China’s ascendancy in the world economic arena has
been confirmed. In Landin’s opinion, a company cannot expect to be a global player if
they do not have a presence in China. For this reason, firms that aspire to be global must
not shy away from entering China at an early stage of their internationalization process.
In conclusion, Landin observed:
Companies should put on their parachutes and go for it, as long as they have done their homework and
filled their pockets with knowledge first. To assure that you will land safely in the right market, you
need a local partner that assists you with his flashlight. The flashlight symbolizes his local knowledge
which will guide you in the right directions. Otherwise you will be lost and miss your opportunity.
The Elekta case highlights the importance of meticulous logistics planning and advanced
preparation, including the recruitment of local guides to assist the foreign firm in
parachuting into the foreign terrain.

Swedsoloringen
Swedsoloringen was founded in Stockholm in 2005 by Swedish Entrepreneur, Jonathan
Wikström. Swedsoloringen’s objective is to sell rings to single or unmarried people globally.
CCSM Its products are sold primarily online in over 20 countries including emerging markets such
24,4 as China, Brazil, and India. The focus on online retailing is to “enhance the development
of a Swedsoloring global community.” Swedsoloringen entered all these markets through
joint ventures or through local distributors. Swedsoloringen had 18 employees and a
turnover of USD970,000 in year 2007. In 2009, in the middle of the world economic crisis,
Swedsoloringen decided to focus only on China while suspending its other overseas
564 operations. The turnover in China alone in 2010 was USD0.5 million.
Swedsoloringen started selling online in 2005. Due to the lack of resources Wikström had
to travel a lot in 2005 to China, South Korea, Japan, Brazil, the rest of South America, the
USA, and all over Europe to make contacts and create attention around his product.
After traveling for two years, Swedsoloringen received a lot of media coverage and the
“Swedsoloring” concept went viral over the internet. During his travels, Wikström realized
that his product was more popular in Asian countries. Hence, he decided to set up operations
in China in August 2007 after some preliminary market research.
According to Wikström, the reasons for entering China were the low costs of
establishment plus the very positive reception to Swedsoloringen’s concept in that country.
All this contributed to the relatively low investment risk. In China, the average age of first
time marriage has increased by three to four years in large cities in the last two decades.
The size of the middle-class population, Swedsoloringen’s target customer base, has grown
dramatically, thus presenting a promising business opportunity. In addition, China has an
excellent infrastructure that supports the sales/distribution of the product. Living standards
have risen substantially over the past two decades – the number of Chinese who now own
apartments is comparable in that in Sweden. This trend is expected to continue. Wikström is
impressed that China is open and transparent in discussions about sex. In fact, China is the
only country in the world that has devoted a special day to celebrate single people every
year on November 11 (or “11/11” which symbolizes four singles). On Singles Day 2015,
Alibaba, the Chinese retail internet giant, reported a record breaking USD13 billion in online
sales despite the continued stigma associated with being single in the country (Ding, 2015).
These factors, in combination, have prompted Wikström to predict that a “Single
Revolution” is on the cusp of takeoff in China. This aligns with Wang’s (2015) assertion that
the internet has hastened the sexual revolution in China.
As Wikström explained, as a small entrepreneurial company Swedsoloringen has
focused on learning through guanxi networking in the market, which is considered the most
effective way of establishing business in China. He said:
In countries such as China, Brazil and India it is vital to get into the right networks from the
beginning to get hold of the opportunities through the networks. As a small company with limited
resources, these opportunities are significant for our success in these specific markets.

In 2007 alone, Wikström traveled to China 12 times. Wikström explained that he has
15 friends in China each of whom, in turn, has another 40 friends, thereby creating an
effective network of 600 contacts. Through this network, it was easy to find the right
business partners with whom he can set up meetings immediately. Wikström said that it is
difficult to do business with the Chinese over the phone; rather, it is better to meet them in
restaurants, cafés, or karaoke bars. As a matter of fact, his most valuable businesses were
developed in the after-hours (6 p.m. to midnight). As a result, Swedsoloringen was able to set
up a sales organization by teaming up with China Venture Labs in Beijing in March 2007.
In January 2008 this partnership developed into a joint venture.
In a similar fashion, Swedsoloringen entered into a partnership in 2008 with Beauty and
Fashion, a Chinese company with more than 2,000 outlets in China. Wikström explained
that his second cousin is married to a Swede who then worked for Expedia Travel.
The owner of Expedia Travel, Justin Tang, purchased an online travel agency called Elong.
com in 2006. Because the business became hugely successful, Tang decided to acquire a Study of four
retail business. When Wikström went to Hong Kong in 2007 his second cousin’s husband set Scandinavian
up a meeting between Wikström and Tang to establish a joint venture. Since Tang did not firms entering
believe that Swedsoloringen’s customers would fit the specific retail business he ran,
negotiations progressed slowly until the fall of 2007 when Tang was considering investing China
in Beauty and Fashion. Tang informed Wikström that this Chinese company serves a
clientele that would fit Swedsoloringen’s target customers. Even though Tang eventually 565
decided not to invest in Beauty and Fashion because he perceived turnover to be lower
than what he had in mind, he did arrange a meeting between Swedsoloringen and Beauty
and Fashion in November 2007. In April 2008, Swedsoloringen and Beauty and Fashion set
up a partnership in Guangzhou. Wikström proudly announced that he now has
13 employees in China, double the size when he entered China the year before. The client
base is also growing fast.
According to Wikström, the middle-class single people with rising incomes in metropolitan
cities around the world represent his target market. In emerging markets such as China, Brazil,
and India, single people are keen on obtaining new information through the internet and they
are receptive to new trends in modern lifestyle. Thus, single people from Beijing, Stockholm,
and New York are similar in many ways and they can join and form a single community over
the internet. This allows Swedsoloringen to work simultaneously with multiple markets at a
level that was inconceivable just a decade ago. Wikström is convinced that the new
globalization trends, including the internet, are speeding up the internationalization process by
providing small entrepreneurial firms with unprecedented opportunities to rapidly
internationalize simultaneously into different markets around the world.
Wikström strongly believes that psychic or cultural distance between countries is less of
a consideration now as it was two decades ago. The internet is one reason. Wikström
recalled his earlier entrepreneurial business in the bicycle industry in Asia. At that time
Wikström had to phone each contact to confirm that he/she had actually received and read
his mail. Therefore, it took a tremendous amount of effort to locate production opportunities
in the past. Today, Wikström can easily identify both production and business
opportunities through the internet. He emphasized that this wireless development has
accelerated the pace of internationalization. Market opportunity is another reason.
Swedsoloringen’s target market, single people are growing in numbers worldwide. For
Swedsoloringen, it is a matter of finding market opportunities (single people) and assessing
potential market size rather than worrying about whether or not the market is
geographically, psychologically, or culturally distant. Wikström said:
It is a combination of gut feeling and market sizes. It is unlikely for us to consider psychic, physical,
cultural and political differences as our target market is extremely homogeneous.

Bestseller China
Bestseller is a family-owned clothing company founded in Denmark in 1975 by Merete
Bech Povlsen and Troels Holch Povlsen. The company has over 14,000 employees, 3,000 of
whom are employed in Denmark. The company sells clothing and accessories to young men
and women through their in-house brands such as VILA, Vera Moda, EXIT, Jack and Jones,
Name It/Newborn, ONLY, Selected, Pieces accessories, Object Collectors Item, Mamalicious,
and Outfitters Nation. Bestseller has a global presence in Europe, China, Middle East, and
Canada with 3,000 branded stores in over 38 countries and an additional 15,000 multi-brand
and department stores around the world (Bestseller, 2015). In 2014, Bestseller had a turnover
of USD3.4 billion and net profit of USD167 million. These figures exclude that of
Bestseller China because the latter is an independent company that is separate from the
Bestseller Group (Denmark).
CCSM Bestseller China ( formally known as “Bestseller Fashion Group China”) was established
24,4 in China in 1996 by two Danes, Allan Warburg and Dan Friis. Bestseller China is 50 percent
owned by the Holch Povlsen family and 50 percent by Warburg and Friis. In the course of
two decades, Bestseller has become “one of China’s leading fast-fashion retailers.” In 2015,
Bestseller China employed 49,000 people in China (Bestseller Fashion Group China, 2015;
Orbis, 2015a, b, c).
566 When Bestseller China was established, both Warburg and Friis, the co-founders, did not
come from within the Bestseller Group. Warburg and Friis saw China as a potential market.
Based on market research, they identified mid-range fashion as a fragmented sector with
only a few major players in the world in the mid-1990s. They wanted to avoid entering a
field that is dominated by strong multinational companies such as the shampoo industry
where there are already five major companies. Warburg and Friis thought that if they were
to enter the fashion industry, they could produce everything in China without the need to
import; in this way, production costs would be kept low. At the same time, they could use
Bestseller, a Danish/European brand, to boost the profit margin. Moreover, the fashion
industry generates extremely good cash flows if there is a large differential between the
production cost of a fashion garment and the retail price.
They were aware that the Chinese mid-range fashion market was about to takeoff at that
time due to the rapid development of the Chinese economy. In reviewing Chinese
demographics in 1995, Warburg and Friis recognized that there was a thriving market of
young Chinese who want quality fashionable foreign clothing. Big international fashion
players such as Zara and H&M were still absent from the China scene at that time
(Zara entered China in 2006 and H&M in 2007, respectively). Warburg and Friis were
determined to seize the opportunity of building a fashion empire in China and invested all
their private savings into this venture. As they had insufficient resources in terms of brand
names to start up their operations in China, they wanted to partner with the Bestseller
Group (Denmark). In 1995, Warburg and Friis visited the head office of Bestseller in Brande,
a quiet village in Jutland, Denmark, and convinced the owners to “lend” them the Bestseller
brand in return for 50 percent equity in Bestseller China. Bestseller China and Bestseller
Group (Denmark) are two distinct legal entities – they only share the same Bestseller brand
and product names. Armed with this agreement, Warburg and Friis single-handedly
established a greenfield Bestseller unit in China in 1996.
Bestseller China opened its first shop in Beijing in September 1996. This was followed by
another two in December 1996 and January 1997. Since it was difficult to borrow money
from Chinese banks for expansion purposes back then, they had to self-finance everything;
this explains why only 20 new shops were opened per year in the first four years. As the
market grew rapidly in 2000, Bestseller China expanded at a more accelerated pace. By 2004,
Bestseller was present in over 120 cities in China. Today, all of Bestseller China’s value
chain activities are located in China. Bestseller China has been extremely successful and has
become the number one fashion retailer in China with some 6,500 concept stores in over
300 medium- and large-cities across the country (DCCC, 2015). Over 90 percent of the
Bestseller products sold in China are locally produced.
Bestseller China is convinced of the potentials in China as evidenced by the fact that the
co-founders poured their own money, time and hard work into the business. Warburg
asserted that their process was very different from that of other foreign companies whose
management just went to China for three years to start up a business and then returned
home. Warburg and Friis did just the opposite – they committed all their time, effort, and
money to the Chinese market through an entrepreneurial learning organization. Warburg
pointed out that many foreign companies in China tend to let their managers sit in an
isolated foreign office that is geographically distant from head office where a secretary
zealously guards the entrance to the company to ensure that no outsider can enter. This has
the undesirable consequence of insulating the company and head office from both the Study of four
employees and the markets. Scandinavian
According to Warburg, the fashion industry has become truly global in the last two firms entering
decades and predicts that it will continue to be so. Companies like Zara and H&M have gone
from being mere European players to global powerhouses with presence in virtually all China
corners of the world. Because fashion trends worldwide have converged, this means that
Bestseller China does not have to adjust their fashion lines to suit local tastes. For this 567
reason, Bestseller China is able to localize everything except for the brand and design.
The company relies on Scandinavian/European brands and design because the firm’s
philosophy is to market European fashion and lifestyle in China.
Warburg strongly believes that the internet has accelerated the internationalization
process, especially in China. The Chinese have MTV and CTV where movie- and pop stars
spot the latest trends that are, in turn, immediately emulated by their adoring fans in China.
Global fashion magazines, such as Vogue and Elle, have an extremely big impact on
changing the lifestyles of young Chinese. In terms of fashion, the Chinese are quite
westernized and they are very open to global products and trends, thus making adaptation
less important and necessary.
However, Warburg indicated that Scandinavian firms do need to make adaptations in
terms of size and climate differences. Beyond that, he believes that one can essentially
establish a fashion business in any market, regardless of apparent cultural differences.
Warburg emphasized that Bestseller China makes quick decisions and they are not afraid to
make mistakes in order to gain the upper-hand over their competitors. In hindsight,
Warburg said that his firm’s internationalization process would have been much faster if
they had more resources, capital-wise, at the time of their entry into China and also if there
was as much homogeneity in lifestyle and tastes back then as there is now.
Warburg asserted that they have tried to implement the Danish corporate culture in their
Chinese business. For this reason, Bestseller China hires primarily young Chinese university
graduates as they are more open-minded and can readily identify with global trends. At the
same time, however, Warburg is aware that many young Chinese still possess certain
traditional values, such as fear of assuming responsibility – they tend to wait for directives
from their manager. The Chinese are extremely hard workers but, at the same time,
deferential to their bosses in contrast to their Western counterparts. Most of the Chinese are
used to a hierarchical organization while Bestseller China’s structure is very flat and where
an open-door policy is maintained. The young Chinese employees are happy to work in a
Scandinavian-style organizational environment and bring enormous energy and work ethic
to the workplace. Warburg stated:
The Chinese are extremely westernized in terms of fashion and lifestyle but a lot of them still have
traditional Chinese values within them. For example, the Chinese are nationalistic in terms of their
preference for Chinese food, family and financial security for the older generation. On the other
hand, however, they are totally westernized when it comes to living standards, clothes, fashion and
lifestyles. These values absolutely coexist in harmony.
To sum up, Warburg said:
It is possible to parachute your business to another place without going to nearby markets first,
we did it from Denmark to China. I do not see why you could not just take the basic thinking about
the brand and the business model and do it somewhere else.

Hästens
Hästens is a privately owned family company founded in a small Swedish town called
Köping in 1852. Hästens is Sweden’s oldest manufacturer of handcrafted luxury beds that
uses only natural filling material from horses’ hair. The Hästens brand name (“Häst” is
CCSM “horse” in Swedish) and logo refer to the company’s origin as a saddle making company.
24,4 Since 1952, Hästen has been the supplier of beds to Swedish King Carl XVI Gustaf and his
family. Hästens’ products are sold in 25 countries and its annual exports have grown from
4 percent in 1994 to 71 percent in 2005. In 2014, Hästens’ turnover reached USD54 million
with net profit of USD4 million. Exports accounted for 85 percent of the company’s turnover,
a substantial increase 4 percent in 1994 (Hästens, 2014). The Hästens’ group operates
568 17 subsidiaries in 12 countries (Orbis, 2015a).
Hästens entered China in 2005 through a Swedish-Chinese agent, Peter Liu. Liu
approached the head of marketing at Hästens with the idea of introducing Hästens’ products
to China. Liu opened a store in Beijing in April 2006 – the timing was impeccable in light of the
tremendous economic growth in major Chinese cities such as Shanghai and Beijing, thus
resulting in a demand for high-priced, high-quality foreign beds. In October 2006,
Dutch-Chinese investors opened a second Hästens store in Hong Kong. Hästens has no equity
investment in Liu’s store. In December 2006, Peter Liu opened his third store in Shanghai.
Other private investors opened a store in Shenzhen in January 2008. Since its entry in 2005, the
company has developed and operated a dealership network of 14 distributors of Hästens
products across China. Hästens’ second retail store was opened in Shanghai on May 30, 2015.
According to Keyu Zheng, Hästens’ Country Manager in China, the development of
communication technology such as the internet revolution has made it possible for firms to
speed up their internationalization process. In the past ten years, Zheng asserted that:
“Chinese consumers have demanded Western products in huge scales and it is crucial for
Western firms who want to become global to be present in China.” For example, if Hästens
sets an objective to sell to only 1 percent of the population in each county in which the
company has a presence, that would translate into a 13-million customer base in China.
Since China entered the WTO in 2001, foreign companies have benefitted from reduced
tariffs and barriers to trade, surging consumerism and a substantial growth in overall trade
between China and Western countries. For Hästens, China’s WTO membership has meant
that the target market in China for its products could reach 5 percent or 65 million potential
customers in China in the long term. In light of the economic downturn in the European and
North American markets, it is even more important for companies that sell luxury items,
such as Hästens’ handcrafted beds, to enter into China and other emerging markets that
have witnessed an explosion in the number of wealthy citizens.
Hästens’ internationalization strategy is to recruit country managers who sell the company’s
concept of high-quality handcrafted beds and build up networks of retailers and distributors in
each national market. Hence, it is important for Hästens to find the right persons for the
designated markets. Zheng pointed out that if Hästens can locate the right person with the
required country-specific knowledge in a given market, they will enter it even though it may not
be high on their priority list of countries to invest in. Hästens started their internationalization
in the mid-1990s by first venturing into neighboring countries: Finland in 1993, Denmark and
Norway in 1995, Germany in 1998, and both the USA and the Netherlands in 1999. To date, the
latter is their biggest international market. Their initial stage of internationalization thus
supports the Uppsala Model. In Zheng’s view, it is imperative that the company be totally
committed to the market and perform due diligence since it is difficult to enter China without
adequate preparations under the wishful assumption that the firm can learn by doing. It is also
important to cooperate with local or Swedish partners with roots in that specific market.
Furthermore, like Keyu Zheng who has Swedish-Chinese cultural roots, their country managers
for Italy and Spain have Italian and Spanish roots, respectively. In China Hästens acquired
China market knowledge from Peter Liu who had prior work experience in China and who has
lived in Sweden for 12 years. These factors have contributed to Hästens’ success in China,
highlighting the importance of meticulous logistics planning, including the recruiting of local
guides who can provide country-specific knowledge and expertise.
 According to Zheng, at the beginning of Hästens’ internationalization experience, Study of four
they adopted an incremental approach to grow from four retailers in Sweden 20 years ago to Scandinavian
the current 300 retailers around the world. Today, however, Hästens’ view of firms entering
internationalization has changed dramatically from that of a decade ago. The company
now has a global perspective instead of setting its sights on neighboring countries only. China
Today, Hästens’ products can reach the whole of Europe in just a couple of days by truck and
the rest of the world by air in the same amount of time. Thus, servicing a foreign market like 569
China requires essentially the same amount of resources as reaching the northern city of Luleå
in Sweden. Zheng asserted that if Hästens were to start its internationalization process today,
it would have gone to foreign countries such as China much more rapidly because
globalization trends, such as the internet, have made customers more homogeneous
worldwide. If the firm has the capacity, logistics and resources to commit to foreign countries,
it should do so since these countries have growth potential and can generate more sales. In his
opinion, Hästens has been successful in China because they have committed their resources to
creating efficient logistics to allow the transportation of bulky items (i.e. beds) in a very
cost-effective manner. Increasingly Hästens has focused on market opportunities more than
anything else, regardless of how far the market is geographically from its home country.
Zheng identified several challenges to doing business in China. One, initially the Chinese
customers reacted to the softness of Hästens’ mattresses because of their traditional belief
that sleeping on soft surfaces is bad for their backs. Zheng said that this attitude is
changing, however, and he believes that Hästens has contributed to this transformation.
In China, the young generation who grew up in big cities such as Shanghai is similar to
urban dwellers anywhere in the world as a result of the adoption of capitalistic market
principles and the pursuit of individual happiness. Two, Zheng stressed that guanxi is
crucial when doing business in China. The challenge for Hästens is to find the appropriate
networks in each country in order to succeed. Once these networks have been identified, it is
essential to establish long-term relationships. For example, Zheng worked at Scania, a
Swedish manufacturer of heavy trucks, before joining Hästens. He has maintained good
contacts with the marketing director of Mercedes cars who has helped Zheng with
marketing and public relations in China. Both Mercedes and Hästens go after wealthy
customers in a country. This is an example of how one can derive a competitive advantage
by knowing someone who has connections and knowledge of the market.

Analysis: perspectives and common themes

The Elekta case shows that the company has, paradoxically, followed both the Uppsala and
the Born Global Models. Its decision to enter China in 1972 is an illustration of the
Born Global Model. However, the evolution of its foreign market entry mode of first going
through a foreign agent before proceeding to establishing a wholly owned manufacturing
plant conforms to the Uppsala Model. In other words, Elekta seems to have embraced the
duality of risk-taking and risk-avoidance in a dynamic way.
Swedsoloringen has mostly followed the Born Global approach. The company began to
look for opportunities worldwide as the founder spent two years scouring international
markets starting in 2005, the same year the company was registered in Sweden. In other
words, Swedsoloringen bypassed the Uppsala Model’s prescription of sequential international
expansion. Moreover, when entering overseas markets Swedsoloringen did not start by
exporting but resorted to entering via joint ventures. Nevertheless, Swedsoloringen’s
internationalization process still bears some of the characteristics associated with the Uppsala
Model as key features associated with this approach, such as “resources,” “risk,” “position,”
“opportunity,” and “learning” can be found in the case description.
Bestseller China is an outstanding example of a Born Global firm. The case highlights the
successful story of two non-Chinese entrepreneurs who brought a foreign brand to China in
CCSM the absence of operational support from the original owners of the brand. Apart from the
24,4 50/50 equity relationship with the Holch Povlsen family and the use of the common brand
name and product name, Bestseller China is completely separate and independent from
Bestseller headquarters in Denmark. Bestseller China went directly to local production and
the establishment of wholly owned stores in the target market. However, Bestseller has
diligently abided by the principles of “planning and decision making,” “position,”
570 “resources,” “commitment,” and “learning” that characterize the Uppsala Model.
Of the four cases presented in this study, Hästens has probably adopted the most
incremental internationalization process as it started expanding into the neighboring Nordic
markets before entering other parts of the world. However, the respondent from the
company emphasized that if Hästens were to begin its internationalization process today,
it would have adopted “a global perspective” from the start.
A careful analysis of the experiences and internationalization process at the four
Scandinavian companies in China reveals five common themes that underlie their success in
entering into China. These are: importance of knowledge, learning and commitment; customer
focus regardless of geographic location; need for speed; reduced salience of psychic distance;
and national cultural learning and balancing in globalization. These five themes suggest that
a new metaphor, parachuting internationalization, can better capture the true essence of the
internationalization process in the age of globalization. Each of these five themes and the
parachuting internationalization metaphor are discussed below.

Importance of knowledge, learning, and commitment

While the four case studies presented in this paper come from different industries and sectors
(B2B high-tech company – Elekta; B2C consumer goods companies – Swedsoloringen,
Bestseller China, and Hästens), they all confirmed the importance of characteristics associated
with the Uppsala Model – knowledge, learning, and commitment (Forsgren, 1989; Pedersen
and Petersen, 1998). These key features remain valid and continue to be crucial in today’s
internationalization process. However, the cases revealed that knowledge, learning, and
commitment are not narrowly interpreted as something that pertains to the focal firm only
(see a critical review in Forsgren, 2002; Forsgren and Hagström, 2007, for example); rather, for
expediency purposes, they can and should be acquired through the firm’s relationships and
networks in the market. For example, Hästens China Manager Keyu Zheng and its distributor,
Peter Liu, have China-specific knowledge. Peter Liu’s knowledge and connections capture the
“valuable, rare, inimitable, and non-substitutable” (VRIN) resources that Barney (1991, p. 8)
alluded to. This perspective of knowledge, learning, and commitment through relationships
and networks is reflected in the words of Jonathan Wikström, Founder of Swedsoloringen:
“It is vital to get into the right networks from the beginning to get hold of the opportunities
through the networks” (Swedsoloringen). The Swedsoloringen case also suggests that a small
new start-up company can overcome firm-specific limitations (e.g. lack of resources) by
making use of market-based resources in the host location (Barnard, 2010).

Customer focus regardless of geographic location

“Customer” is sidelined in the Uppsala Model[6] but it is at the core of the Born Global Model
(Knight et al., 2004). The customer focus is evident in all the four cases and highlights that in
the light of intense global competition, in order to be successful, the international firm has to
be more customer driven. Incrementalism and caution, characteristics of the Uppsala Model,
must now be balanced against a strong customer orientation, regardless of geographic
location and psychic distance. Hästens adopted an incremental approach early on in its
internationalization process by entering nearby Nordic countries. However, Hästens’ view of
internationalization has changed dramatically over time and the company now espouses
“a global perspective instead of a nearby perspective” by scanning market opportunities
worldwide (Hästens). Similarly, Elekta’s vision is “internationalization is a matter of where Study of four
the customers are” and is indicative of an emerging customer-driven approach to Scandinavian
internationalization in the age of globalization. Even though China may be distant, firms entering
geographically, psychically, and culturally from the Nordic region, it is the world’s largest
and fastest emerging market with a huge potential customer base that no global player can China
afford to ignore. This explains why Bestseller China started its operation and production in
China at the company’s inception. This represents a focal shift away from the firm to the 571
customer, thereby demonstrating that in reality the sequential stages advanced by the
Uppsala Model can indeed not only be skipped but perhaps rendered obsolete in today’s
rapidly changing world.

Need for speed

The pace of internationalization is not discussed in the Uppsala Model but is
emphasized throughout the four cases, thus lending support to the call for “the speed of
internationalization” (Oviatt and McDougall, 2005a; Weerawardena et al., 2007), “accelerated
internationalization” (Mathews and Zander, 2007), and to Luo and Tung’s (2007, p. 490)
assertion that to become global players, firms need to “springboard” faster and be more
aggressive in internationalization than they used to be. In global competition, it is absolutely
imperative to seize the moment when the opportunity arises. A basic assumption of the
Uppsala Model is that the firm first develops in the domestic market before going overseas
( Johanson and Wiedersheim-Paul, 1975). An important learning gleaned from the four cases
is that the internationalization process can be accelerated and the stages of the Uppsala
Model can be bypassed in the presence of two factors. One factor is the existence of
information technology, such as the internet. The second factor is the existence of tough
competition. The highly competitive environment in today’s globalized world renders it
difficult for companies to pursue incremental internationalization in markets with
fast-developing high-growth potentials. In these cases, it may be necessary to skip the
sequential stages prescribed by the Uppsala Model by parachuting directly and as quickly
as possible into these target markets. A crucial factor behind Bestseller China’s phenomenal
success is its decision to enter the market as expeditiously as possible once the two
co-founders realized that the increasing purchasing power and rapidly changing taste of
Chinese consumers presented a significant opportunity for them, particularly when other
giant clothing retailers like Zara and H&M have not yet entered into China. Through the
first mover advantage and quick decision making, Bestseller China was able to gain an
important upper-hand over its competitors in China.

Reduced salience of psychic distance

The aforementioned themes suggest that the concept of psychic distance that is at the core
of the Uppsala Model is increasingly less salient in the face of rapid changes brought about
by globalization. In all four cases, none of our respondents found psychic distance to be an
important consideration when discussing internationalization of the firm in a global
economy. In Swedsoloringen’s case, for example, with the convergence in tastes and values
of the younger generation, psychic distance between the host and home countries is less
significant now as compared to 15-20 years ago. The case of Bestseller China points to the
convergence of fashion trends across international borders. In all the case studies,
the academic concepts of “psychic distance” ( Johanson and Vahlne, 1977), “liability of
foreignness” (Hymer, 1976), “cultural differences” (Hofstede, 1980), and “cultural distance”
(Kogut and Singh, 1988) were found to be inconsequential, thereby raising the question of
whether these concepts have been rendered obsolete in the age of globalization as discussed
in the next section.
CCSM National cultural learning and balancing in globalization
24,4 While the executives from all four companies were of the opinion that “psychic distance,”
“liability of foreignness,” “cultural differences,” and “cultural distance” were less important in,
one, their entry to China and, two, contributing to their company’s success, they did not
dismiss the significance of national cultural learning and the need to understand the local
culture. Rather, they were cognizant of the upside of cultural distance as posited by Stahl and
572 Tung (2015). For example, some respondents pointed out that traditional Chinese values such
as guanxi (cf. Luo, 2007; Buckley et al., 2006; Tung et al., 2008) and face are still very important
in today’s Chinese society. Yet they observed that these traditional values tend to coexist with
“capitalistic” and “Western values.” The dual existence of old and new values in Chinese
culture is indicative of the need to adopt a Yin Yang approach to understand cultural learning
and balancing in an age of globalization. In other words, globalization does not mean that
national culture no longer matters (Chevrier, 2009); rather, the existence of national culture
does not necessarily translate into permanent cultural differences that are fairly impervious to
change. These companies appear to espouse the perspective that these cultural differences can
be rendered less potent because each national culture can learn and embrace new values and
behaviors. This is consistent with Fang’s (2005-2006, 2012) hypothesis that any given
“foreign” concept can paradoxically find its footing in the local host culture/society under the
right situation, context, and time. This perspective can help explain why foreign markets can
be viewed as home markets (Galvin et al., 2010; Hoover, 2006).

“Parachuting internationalization” as a new metaphor

Collectively, the five themes garnered from the Chinese market entry process of the four
Scandinavian firms suggest that neither of the dominant internationalization theories alone
can adequately capture reality. As such, there is a need to develop a new way to capture the
dynamics of internationalization of the firm.
A “parachuting” metaphor emerged during an informal conversation with one of the
interviewees during the course of the face-to-face meeting. Even though the metaphor was not
used in the interview agenda sent to the respondents in advance, once this metaphor arose, it was
adopted enthusiastically by the respondent in his storytelling. This unexpected finding inspired
the researcher to mention this metaphor in an informal way in interviews with subsequent
respondents. The “parachuting” metaphor was quickly embraced by several respondents to
characterize their company’s strategy, respectively: “One can parachute into countries that hold
the biggest opportunity for us to reach our clients and it is a combination of gut feeling and
market size” (Swedsoloringen); “It is possible to parachute your business to another place without
going to nearby markets first, we did it from Denmark to China” (Bestseller China).
Table I presents the elements inherent in the Uppsala Model and the Born Global Model
and how the proposed ‘parachuting internationalization’ metaphor can reconcile and integrate
these two seemingly opposing paradigms. The table gives the relative importance of the
Uppsala Model and the Born Global Model represented in each of the case studies.
Parachuting internationalization refers to a firm’s strategic targeting of markets with
great potentials, correct positioning, swift actions, and fast learning in world markets
whereby the firm appears to circumvent the conventional wisdom of liability of foreignness,
cultural distance, and psychic distance. Parachuting internationalization involves high risks
and demands global vision, courage, planning, intimate knowledge of the local terrain,
effective use of networks, and basic survival instincts.
The “parachuting internationalization” metaphor proposed here is analogous to
parachuting, the recreational sports and/or skydiving into enemy territory or other
strategic locations in military operations[7]. Parachuting in both contexts share certain similar
characteristics – the skydiver or paratrooper must possess a “bird’s eye view” (i.e. holistic or
global in a broader sense) of the target; perceive the potential risks associated with the
 Parachuting
Study of four
Characteristics Uppsala Model Born Global internationalization Scandinavian
firms entering
Importance of foreign Less important Very important Very important
markets at the firm’s inception Hästens***** Elekta***** China
Swedsoloringen*****
Bestseller China*****
Role of national culture Very important Ignores cultural differences Both important 573
Elekta*** Elekta*** and unimportant
Swedsoloringen* Swedsoloringen***
Bestseller China* Bestseller China****
Hästens**** Hästens*
Psychic distance Very important Not important Both important
Elekta* Elekta*** and unimportant
Hästens**** Swedsoloringen*****
Bestseller China*****
Hästens*
Firm’s orientation Ethnocentric Geocentric Geocentric
Hästens**** Elekta***
Swedsoloringen*****
Bestseller China*****
Hästens****
Global vision Less important Very important Very important
Swedsoloringen* Elekta******
Hästens* Swedsoloringen*****
Bestseller China*****
Hästens****
Attitude toward risk-taking Less tolerance for risk
High tolerance for risk High tolerance
Elekta** Elekta***** for risk
Swedsoloringen* Swedsoloringen*
Table I.
Bestseller China* Bestseller China* Comparative
Hästens***** analysis of three
Notes: A 1-5 scale is used with *Meaning slight support and *****Meaning great support; **,***,**** are internationalization
significants with equal internals in between * and ***** approaches

activity; possess exceptional courage; be mentally and physically fit; and have undergone
extensive training prior to the actual operation itself. Also in the act of skydiving, the skydiver
has to adapt to changing weather/wind conditions to increase the likelihood that he/she will
land in a designated area. In order to successfully carry out the entire operation, it is
imperative that the following activities be undertaken before the actual event itself: devising a
strategic vision that is shared among the members of the team, careful planning, meticulous
preparation and almost endless rehearsals for the ultimate jump. In the event that the
paratrooper lands in hostile terrain, such as an area that is already occupied by enemy forces,
he/she must possess street smarts, including the ability to think on his/her feet and act swiftly
and deftly to find shelter in a nearby safe yet advantageous location. All of these point to the
importance of meticulous logistics planning and preparation.
The decision to parachute into international markets and the requirements for successful
parachuting have been alluded to in the four case studies and will be summarized below
with the keywords (i.e. the characters that have been capitalized and boldfaced in the six
requisites identified in the preceding sentence) coincidentally forming the word, “GLOCAL”.

G – global vision
In this study three of the four cases (Elekta, Swedsoloringen, and Bestseller China)
possessed a clear global vision from the inception of their businesses. For example,
CCSM “For Elekta internationalization is a matter of where the customers are […] companies
24,4 should put on their parachutes and go for it” (Elekta), “the development of a Swedsoloring
global community” (Swedsoloringen), and Bestseller China’s successfully capitalizing on the
global trend of the fashion industry. Hästens, a traditional local Swedish supplier and also
the supplier to the Swedish Royal family, has also recently replaced its earlier incremental
approach with a global approach. Under parachuting internationalization, the firm/
574 entrepreneur similarly espouses a global mindset by adopting a proactive, high risk and
high yield strategy of aggressively scanning market opportunities around the world
(Weerawardena et al., 2007). These attributes are clearly evident in the owners/founders of
all the four case companies presented in this paper.

L – location
All four case companies in this paper recognize the strategic importance of location, or the
China market in this study, to their firm’s success. Their decision to enter and operate in
China stems from global vision of the owners/founders. For example, Elekta believes that
without a presence in China an organization can hardly become a global player. Hästens has
a similar vision: “it is crucial for Western firms who want to become global to be present in
China.” In the case of Swedsoloringen, the company quickly recognized the opportunity that
China is the country in the world that initiated the single people’s day on November 11
(or “11/11” which symbolizes four singles) every year. Now that this event has gone viral,
the company seeks to capitalize on this trend by building a global online community.
Bestseller China’s vision and strategy of focusing on China to sell its European fashion is a
testament to the success of location selection, i.e. location-specific advantages. Dunning
(1998, 2009) has focused on the importance of location in a firm’s international expansion
strategies. On the surface, the location and local customer focus may seem to be paradoxical
to the espousal of a global vision identified under “G” above. In reality, this is not so as the
location of the best market opportunities and the need to meet the needs of the local
customers are subsumed in a global vision. Customer focus in the local business
environment is basic to the Born Global thinking (Knight et al., 2004). To successfully target
these strategic locations and their customers, the firm that adopts a parachuting
internationalization strategy must be fully committed, time-, energy-, and capital-wise.

O – opportunity
The word “opportunity” is featured prominently in all our cases. Elekta emphasized the
importance of speed to enter the Chinese market by seizing the opportunity that Chinese
consumers are becoming increasingly well-off, thus contributing to the huge market
potential. In the case of Swedsoloringen: “In countries such as China, […] it is vital to get
into the right networks from the beginning to get hold of the opportunities through the
networks […]. These opportunities are significant for our success.” That Bestseller China
was founded in China in 1996 long before its giant competitors ZARA and H&M entered
that country a decade later is an amazing example of how fast the company managed to
identify and seize the opportunity to build up its fashion empire in China. The two
co-founders, Warburg and Friis, recognized the huge market potential of young Chinese
consumers who desire quality fashionable clothing with western characteristics; therefore,
they invested all their personal savings in creating Bestseller China. In the case of Hästens it
is evident that the company has increasingly focused on “market opportunities” more than
other factors such as geographic distance. Beginning in 2003-2004, the rate of economic
growth in the developing countries has surpassed that of the industrialized economies.
This gap has been further widened by the 2008-2009 global financial crisis and the
European Union sovereign debt crisis. In light of the changed calculus of global competition,
firms have to ferret out opportunities anywhere in the world, regardless of cultural/psychic/
geographic distance. Parachuting internationalization highlights this need to search Study of four
intensively for opportunities around the world and rapidly enter into those markets/sectors Scandinavian
with good growth potentials – this is in line with the increasing call to understand firms entering
entrepreneurial dynamics in international business (Mathews and Zander, 2007). As in
parachuting, this represents a high risk yet potentially high yield approach and constitutes China
a marked departure from the Uppsala Model that posits a sequential entry into psychically
close countries initially to minimize risk. 575
C – capital and other resources to support globalization efforts
Allan Warburg, Bestseller China’s co-founder, described how he started up with insufficient
capital and how his organization could have been developed much faster in the
internationalization process if more financial resources were available at the time of entry
into China in 1996. The importance of resources is also discussed in the case of
Swedsoloringen where Wikström stressed the need for him to travel extensively to the USA,
Europe, China, and other places to establish business contacts as well as attracting local and
international media attention. This helped his product to be better known in Asian
countries, resulting in his operations being set up in China in 2007. Hästens also made it
clear that in terms of establishing its operations in China, it requires essentially the same
amount of resources they used in Sweden. Elekta’s major breakthrough came in 2001, 2002,
and 2006 when the company set up a manufacturing line in Shanghai through a majority
equity joint venture where they eventually acquired its Shanghai Chinese partner and
another major player in Beijing subsequently – acquisitions are extremely resource
intensive. This relevance of capital and other resources to support an investor’s
globalization efforts has been widely discussed in the Uppsala Model but less so in the Born
Global Model. To internationalize, a firm needs capital and other resources – these can be
obtained through organic growth and/or networks and/or joint relationships with other
players either at home or abroad. The importance of networks can be found in both the
Uppsala and Born Global Models. In the four company cases, all the executives interviewed
have alluded to the continued importance of guanxi and networks in the Chinese context
(cf. Luo, 2007; Buckley et al., 2006; Tung et al., 2008), albeit they have taken on some modern
features. However, as Elekta’s case illustrates, companies can no longer rely solely on their
guanxi in today’s business environment in China; to secure success in the Chinese market
they need to combine a unique and superior product offering with guanxi.

A – accelerated cultural learning and swift action

All four cases show that there are cultural differences across national markets, but the
psychic distance between markets that has been emphasized in the Uppsala Model may no
longer be as salient. Elekta’s experience, i.e., “Information is spreading effectively […]
Hospitals knew about Elekta before we even entered the market” confirms the power of the
internet in mitigating cultural differences and accelerating cross-cultural understanding in
the era of globalization. In the case of Swedsoloringen the new trends in globalization
including the internet have substantially speeded up the cultural learning process by
offering unprecedented opportunities for the firm to enter rapidly into different markets
around the world simultaneously however geographically, psychologically, or culturally
distant they may be. Hästens’ China Manager described the impact of the development of
communication technology such as the internet on the company’s accelerated
internationalization process. At Bestseller China, quick decisions can be made because
the fashion industry has become truly global. Warburg strongly believes that the internet
has contributed to the speed of internationalization process of firms, especially in China.
MTV, CTV Vogue, Elle, etc., have had a big impact on changing Chinese lifestyles especially
among young Chinese. All this has helped facilitate cultural learning which bridges the
CCSM cultural differences to allow Bestseller China’s products to swiftly penetrate into and
24,4 succeed in China. Warburg is of the opinion that one can essentially establish a fashion
business in any market, regardless of apparent cultural differences. Warburg emphasized
that Bestseller China is not afraid of making mistakes in market competition.
This constitutes a prime example of the high risk yet high payoff associated with the
parachuting internationalization metaphor. The empirical data collected through the four
576 case studies lend support to the assertion that it is possible to derive positive consequences
from cultural differences (Stahl and Tung, 2015). China, a country that has traditionally
embraced multiple philosophical traditions, is particularly open to such influences and yet
anxious, at the same time, to retain ancient values that have served the country well in the
past (Faure and Fang, 2008).
The executives interviewed in our study do not consider cultural differences as a static
phenomenon. Rather, they are inclined to view culture as something that can be learned. The
paradoxical view of cultural differences embraced by our interviewees support the assertion
that culture can be transcended and transformed through Yin Yang balancing (Chen, 2016;
Fang, 2005-2006, 2010, 2012). Therefore, the concepts of psychic distance and national
culture are perceived as both important and unimportant in parachuting
internationalization depending on how the concepts are tackled in a given situation,
context, and time. This view is supported by the Yin Yang thinking. This dynamic view of
cultural differences and cultural balancing (not a mere mixing) associated with the
parachuting internationalization metaphor thus represents a departure from the Uppsala
Model that focuses on cultural differences, on the one hand, and the ignoring of cultural
differences by the Born Global Model, on the other. This perspective of cultural differences
reflects the reality observed by Stahl and Tung (2015) that indeed there are both positives
and negatives associated with cultural distance; the key lies in correctly understanding
when, where, and how distance matters.

L – logistics preparation and meticulous planning

The best strategic vision and intent must be complemented by meticulous logistics planning
and preparation such as the assembly of survival kits, local map, and seeking the assistance
of a local guide in order to ensure a desirable outcome, as exemplified in the Elekta case.
Elekta emphasized the importance of modernizing its manufacturing process and
management practices including effective logistics management. The success of Hästens in
China is attributed, to a large extent, to the company’s commitment to creating efficient and
cost-effective logistics solutions to transport bulky items (i.e. beds); this requires meticulous
planning. In the case of Swedsoloringen, Wikström engaged in painstaking plans to travel
to various continents to get to know the right people to develop his business networks for
the purposes of starting up his activities in China. Bestseller China’s phenomenal success
lies in its full dedication and commitment to practical details. Warburg remarked that his
company is different from most other foreign investors that are more concerned about quick
returns on their investments. Warburg and Friis committed all their time, effort and
personal savings to the Chinese market with detailed attention to logistics and planning.
Besides planning/preparation and intimate knowledge of the terrain of the targeted
territory, because unforeseen contingencies can always arise, the paratrooper needs to possess
innate survival instincts supplemented by kits and local guides. A paratrooper’s ability to
survive when things do not always proceed according to plans is a function of whether he/she
can think on his/her feet, i.e. spontaneously adjust to changes in course/direction. The ability
to adapt to these changes (i.e. flexibility) is at the core of the Yin Yang principle and, hence, an
essential component of the parachuting internationalization metaphor.
The “parachuting internationalization” metaphor sheds new insights into the emerging
internationalization process beyond the notions of stage-skipping, leapfrogging, or
springboarding by emphasizing the firm’s capability to embrace a strategic intent Study of four
(Hamel and Prahalad, 1989) when embarking on internationalization in the age of Scandinavian
globalization. Firms with a strategic intent are in a better position to land in a targeted firms entering
market, thereby attaining seemingly impossible goals. Yet, the same “parachuting
internationalization” metaphor acknowledges that nothing is purely “born global” and there China
are significant risks associated with parachuting/internationalization. Viewed in this
context, the firm has to be mentally and physically equipped and prepared to parachute 577
safely from the sky to its desired target.
In short, the “parachuting” metaphor is an embracive internationalization strategy which
builds on a dynamic integration of the “Uppsala” and “Born Global” models. If a military
metaphor is adopted, the Uppsala Model may be compared to“infantry in the army” which
emphasizes step-by-step advancement in terrains whereas the “Born Global” Model may be
called “airborne bomber”[8] which does not need advance step-by-step but can fly high and
far; the former assumes a superior advantage of indigenous knowledge and understanding
whereas the latter benefits from its speed and holistic view[9]. In terms of Li (2016) and
Chen (2002), the “parachuting internationalization” represents Yin Yang balancing and a
“middle way” strategy.

Conclusion
In this paper, we have presented and analyzed the experiences and perspectives of four
Scandinavian firms’ internationalization into China. An important finding of our study is
that the popular concepts of “psychic distance,” “liability of foreignness,” “cultural
differences,” and “cultural distance” are increasingly less salient in the explanation of a
firm’s internationalization into high risk yet high yield markets. We proposed a
“parachuting internationalization” metaphor to better understand how firms pursue
internationalization in the age of globalization. When parachuting into an overseas market,
the firm may not even have a big home base. Rather, its most strategic assets appear to be
its global vision and strong commitment to learn and build competence continuously
through relationships and networks in the target market. Parachuting internationalization is
not an approach that ignores cultural differences; rather, it views cultural differences in the
context of dynamic changes in the age of globalization.
This research is inspired by the Yin Yang thinking and empirically based on the
experiences and perspectives of four Scandinavian firms’ entry into China. The research
shows that these firms perceived China as a market that they cannot afford to ignore. Elekta
and Bestseller China appear to be superior performers, while Swedsoloringen and Hästens
have been more affected by the 2008-2009 global financial crisis although they seem to have
recovered from it. Future research should examine the moderating roles of industry/sector,
company size, ownership structure, corporate culture, and leadership in explaining the
differences in performance across firms.
It should be pointed out that the use of Scandinavian firms’ entry into China as the
empirical base can itself be a limitation. Future research should apply the Yin Yang’s
holistic, dynamic and paradoxical lens to examine foreign market entry into other
emerging economies. For example, it would be insightful to examine how different
institutional environments besides culture (Xu and Shenkar, 2002) could affect the
internationalization process of firms and strategies. The paradoxical nature inherent in
the “parachuting internationalization” metaphor proposed in this paper seems to echo
Luo and Rui’s (2009) theory of ambidexterity. Future research should also examine
whether the “parachuting internationalization” metaphor is applicable in developed as
well as emerging markets.”
Besides the theoretical contribution of the parachuting internationalization which shows
that it is indeed possible to reconcile and integrate two dominant but seemingly conflicting
CCSM approaches to the study of internationalization (i.e. the Uppsala and Born Global Models),
24,4 the findings in this study have important practical implications for firms that seek to
expand worldwide. These were alluded to throughout the paper and are summarized here:
first, firms should seek to capitalize on globalization trends that have facilitated the
convergence of consumer tastes around the world, as in the case of Bestseller China. Second,
the findings from the four cases support earlier research that emphasizes the need to acquire
578 knowledge from third parties and/or networks, and partnering with domestic and/or foreign
entities if the company does not have such in-house knowledge and expertise.
Third, because of the speed of development in many emerging markets, a firm can no
longer afford the luxury of pursuing a sequential approach to foreign market entry; rather, it
should seriously consider parachuting into multiple markets simultaneously. Fourth, as the
four case companies from different sectors have illustrated, it is indeed possible to create a
glocal concept and product that can find a ready market around the world. Fifth, because of
the potentials associated with particular target markets, once the firm decides to enter into
that country, it needs to commit 100 percent to that activity. Finally, firms that embark on
internationalization in global markets must not be unduly intimidated by cultural
differences as these can be mitigated by cultural learning and balancing. In short, parachute
landing combined with fast learning can enable a firm to gain competitive advantage
because of its swift and seemingly paradoxical GLOCAL strategic moves cannot be readily
discerned nor copied by other companies that are mentally constrained by either the
Uppsala Model or the Born Global Model.
In conclusion, we would like to quote Mr Ren Zhengfei’s use of the parachute metaphor at a
rally in end October 2016 to pledge his company’s commitment to its various markets of the
world by dispatching over 2,000 Huawei R&D experts to the frontiers of the markets.
Mr Ren is the founder of Huawei, the world’s leading global information and communications
technology (ICT) solutions provider active in more than 170 countries and regions with more
than 170,000 employees. Mr Ren likened the worldwide markets for ICT products to a
battlefield where Huawei’s experts have to exercise speed and efficiency to respond to
consumer needs everywhere they could be found. Mr Ren inspired his employees to “put on
parachutes” (Sina, 2016) to parachute successfully through glocal markets.

Notes
1. Rugman and Verbeke (2004, p. 3), for example, have argued that the “data on the activities of
the 500 largest MNEs reveal that very few are successful globally”. Therefore, regionalization or
semi-globalization may be more appropriate to characterize the realities of the global economy.
It is not the intention in this paper to debate whether it is globalization vis-à-vis regionalization.
In this paper, globalization is used as a shorthand for globalization and/or semi-globalization/
regionalization.
2. While institutional factors (e.g. Xu and Shenkar, 2002) can affect foreign market entry, they are not
the focus of this research.
3. In this paper, in terms of discussions of the Yin Yang thinking, the word “dialectical” is used to
connote the notions of “duality” and being “duality-rooted” (see also Li, 2016; Luo and Zheng, 2016).
4. While cultural distance is not synonymous with psychic distance, we sometimes use them
interchangeably in this paper given the similarities between them.
5. In this paper, “Swedsoloringen” and its founder “Jonanthan Wikström” are fictitious names.
6. An argument can be made that firms that first expand to psychically close countries do consider
customers as well because they assume that customers in neighboring countries are more similar
to those at home.
 7. Courtesy of one of the reviewers, the Oxford Dictionary also defines parachuting as Study of four
“the introduction by appointment or election of a person to a position within an organization Scandinavian
without regard to the existing hierarchy.” This definition applies in the case of Bestseller China
as the two co-founders are external to the clothing manufacturing business until they established firms entering
Bestseller China. China
8. “The airborne bombe” metaphor.
9. We would like to thank one of the blind reviewers who suggested this idea. 579

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Further reading
Leung, K., Bhagat, R.S., Buchan, N.R., Erez, M. and Gibson, C.B. (2005), “Culture and international
business: recent advances and their implications for future research”, Journal of International
Business Studies, Vol. 36 No. 4, pp. 357-378.
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World Business, Vol. 51 No. 1, pp. 142-152.

Appendix 1. Interview questions

Introduction
When and why did you decide to start your business in China?

Globalization
(1) How do you define globalization and how do you see your company competing in an
increasingly globalized world? How has the globalization trends affected your organization?
(2) What are the new globalization trends that have speeded up the internationalization process?
(3) How will globalization affect you in the future? Lower tariff barriers and higher market
entry standards create a larger market and more competition. Are these two of the most
fundamental features? Why or why not?
(4) What consequences do you think globalization has on China? And on Swedish companies’
internationalization in China?
(5) What is most important, first mover advantage? Why?
(6) What is driving your choice (which factors) of markets when pursuing internationalization?
(7) How important do you consider the Chinese market to be for any company that wants to
become “global”?
(8) What is your view on Chinese economic development in relation to your future business there?
CCSM Culture
24,4 (1) Do you perceive any cultural differences when doing business in China? How would you
describe the Chinese corporate culture?
(2) Being an international brand, what would you say is the greatest challenge for an
international brand in the Chinese market? What recommendations would you give to a
company on how to overcome the cultural differences between the East and the West in the
586 best way possible?
(3) Is it easy for Chinese consumers or businesspeople to adapt to international values or lifestyle?
Please use a story to illustrate this.
(4) Is it easier to do business in China now as compared to 10 years ago?
(5) There are many sources that claim that cultures are converging, i.e., that cultural differences
have become smaller. Do you agree with this statement? Why or why not? Do you think that
the Chinese have become more open to western products and lifestyle?
(6) Do you think that capitalism will be the new “religion” in China? Why or why not?
(7) Do you think that the old values will disappear/remain or co-exist with the new values?

Internationalization process
(1) What is your core motivation for international expansion?
(2) Is it a strategic decision to grow or take advantage of an opportunity? How was this strategic
decision made? Was this related to your experiences, studies, work or other? Or was it due to
industry, globalization, entrepreneur or networks?
(3) What strategies have you used to establish your company’s presence internationally?
Acquisition, partnership, licensing. Please explain your reasons? (Synergies?)
(4) What do you consider to be the most important challenges to your international expansion?
(5) Did you enter one market at the time or many markets simultaneously? Has the market entries
evolved over time continuously or at an accelerated pace?
(6) What is the most important fact to consider when you go abroad with your business
(culture, knowledge, experience, commitment, opportunities or networks)?
(7) How does the company gain knowledge about new markets (China)? What market information
are you mainly interested in? Do you have any prior experiences in China?
(8) Did you enter the nearby market first? Was psychic distance an influencing factor?
(9) How did you analyze the market situation before you started your business? How were
decisions regarding the expansion made?
(10) When you look back on your company’s success, what do you think were the major milestones
in your company’s international expansion?
(11) What types of experience are the most important for success in the internationalization
process to China?
(12) What lessons did you draw from this experience? What would you have done differently if you
were to embark on internationalization today?

Networking and business relationships

(1) What networks have you used in your internationalization process to China?
(2) What kinds of business relationships do you have in China and how do you value Guanxi?
Did you increase the use of networks in China?
 (3) What do you think are the most common mistakes other companies commit when they Study of four
establish their business in China? Scandinavian
(4) Is it necessary to build up knowledge in-house or is it enough to acquire knowledge firms entering
from others? China
(5) What is your advice for Swedish firms that want to establish themselves in China?
(most important factors to consider)
(6) What kind of expectations did you have about the Chinese market and did that change once
587
you entered the market?
(7) Can you recall/describe a real story/situation that provides insight into the difficulties of
operating in China?
(8) Does the bureaucracy have a lot of power to influence the business/industry?
(9) Is it important to have personal, private or company networks when entering China?
(Personal network ¼ Professional, private network ¼ friends, family and their network,
Company ¼ Supplier, customers, partners)
(10) Why do you think your company has been so successful in your internationalization efforts,
both in China and in general?

Appendix 2. Milestones in the case companies’ internationalization process

Elekta’s internationalization process

1972 Elekta was founded in Sweden.
1972 Elekta entered China through agent.
1982 Entered the USA.
1983 Established a foreign subsidiary in the USA.
1985 Entered into partnership with a third party in China.
1985 Established a Wholly-Owned Subsidiary in France.
1988 Entered Germany.
1989 Entered India.
1989 Entered Spain.
1989 Established a representative office in Japan.
1992 Established a representative office in Beijing, China.
1994 Elekta AB was listed on the Stockholm Stock Exchange.
1996 Established a leading entity in Hong Kong, China.
1996 Established a Wholly-Owned Subsidiary in Japan.
1997 Acquired Philips Radiation Therapy Division and formed Elekta Oncology Systems Ltd and
became active in many European countries: Finland, Australia, Greece, Italy, Switzerland, the
Netherlands, Belgium, Hungary and the UK.
2001 Established Joint Venture in Shanghai, China.
2002 The Joint Venture in Shanghai became a Wholly-Owned Subsidiary.
2002 The leading entity in Hong Kong became a legal entity.
2005 Acquired California based software company IMPAC Medical Systems in the USA.
2006 Acquired BMEI in Beijing, China (80 percent).
2006 Entered Australia through a third party.
2007 Established Wholly-Owned Subsidiary in Australia.
2007 Established Wholly-Owned Subsidiary in India.
2007 Established Wholly-Owned Subsidiary in Hungary.
2007 Acquired the Italian company 3D Line Research and Development.
2008 Acquired the US-based company CMS, a worldwide leader in radiation therapy software solutions.
2010 Acquired the assets and liabilities from Elekta Korea Ltd, a former distributor in South Korea.
CCSM 2010 Acquisition of Resonant Medical Inc. (RMI) in Canada.
24,4 2011 Acquired Nucletron in the Netherlands.
2012 Acquisition of Radon Ltd, the leading linear accelerator service provider in Brazil.
2013 Acquired the remaining 20 percent in the Chinese subsidiary Elekta BMS ( former BMEI).
2014 Acquired Mesi Medical, the leading distributor of radiation oncology solutions in Turkey.
2015 Acquisition of RTA in Poland.
2015 Acquired the service business of Mexican distributor, Asesores Electrónicos Especializados S.
588 A. de C.V. (AEESA).

Swedsoloringen’s internationalization process

2005 Swedsoloringen was founded in Stockholm, Sweden.
2005 Visited China on a two-year trip around the world.
2005 Entered Japan.
2006 Entered Brazil.
2006 Entered Taiwan.
2007 Established operations in China through a service contract.
2008 The contract with the Chinese partner changed into a Joint Venture in January.
2008 Entered India.
2008 Entered Spain.
2008 Entered Peru.
2008 Entered Colombia.
2008 Entered Argentina.
2008 Entering Venezuela.
2008 Entered Czech Republic.
2008 Entered Poland.
2008 Entered France.
2008 Entered Italy.
2009 Cooperated with the firm Argyor S.A., Spain’s largest wedding ring manufacturer.
2010-2015 Focused on online retailing to develop the SingleRing global community concept.

Bestseller China’s internationalization process

1996 Bestseller Fashion Group China was established.
1996 The first ONLY brand store was opened in Xidan, Beijing.
1996 Established three shops in Beijing.
1997 Opened 24 stores in 9 different cities across China.
1997-2000 Established 20 new shops every year in China.
2000 The brand Jack & Jones was introduced to the Chinese market.
2001 Launched the brand Vero Moda in China.
2001-2008 Opened 449 shops under the brand name Vero Moda.
2008 The brand Selected was introduced in China.
2009 Opened a flagship online store on Taobao’s Mall ([Link]).
2011 Acquired a majority share in the Swedish brand [Link].
2012 The brand [Link] was launched in China.
2015 Operated around 6,500 stores across more than 300 cities in China.

Hästens’ internationalization process

1852 Hästens was founded in Sweden.
1993 Entered Finland.
1995 Entered Norway.
1995 Entered Denmark.
1998 Entered Germany.
1999 Entered the Netherlands.
1999 Entered the USA.
 2001 Entered Spain. Study of four
2003 Entered Italy. Scandinavian
2005 Entered Greece.
2005 Entered Austria.
firms entering
2005 Entered China. China
2006 Entered Russia.
2006 Entered the Czech Republic.
2006 Entered Switzerland. 589
2006 Entered Great Britain.
2006 Opened a store in Beijing.
2006 Opened a store in Hong Kong.
2006 Opened a store in Shanghai.
2006 Awarded Swedish Trade Council Export Award.
2007 Entered South Africa.
2007 Entered Hungary.
2007 Opened a store in Singapore.
2008 Entered India.
2008 Entered Poland.
2008 Opened a store in Shenzhen.
2009 Suspended international expansion (lost almost a half of its distributors).
2010 Opened a store in Istanbul, Turkey.
2010 Opened a store in Seoul, South Korea.
2012 Opened 34 stores worldwide.
2012 Opened a store in Dubai, United Arab Emirates.
2012 The first Hästens Sleep Spa concept store opened in Stockholm, Sweden.
2013 Opened 26 stores globally.
2013 Opened a concept store in Brussels, Belgium.
2014 Opened a store in Tianjin, China.
2015 Operated over 200 Hästens brand stores in 35 countries worldwide.

About the authors

Tony Fang is a Professor of Business Administration at Stockholm Business School of Stockholm
University, Sweden. Professor Fang’s research includes cross-cultural management and innovation,
internationalization of emerging markets multinationals, China studies, and Swedish innovation
model. He is the author of the book Chinese Business Negotiating Style and the research paper
Yin Yang: A New Perspective on Culture. Tony Fang is the corresponding author and can be contacted at:
[Link]@[Link]
Rosalie L. Tung is the Chaired Professor of International Business at Simon Fraser University
(Canada). She is a past President of the Academy of Management and the Academy of International
Business, and an elected fellow of the Royal Society of Canada, the Academy of Management, the
Academy of International Business, and the British Academy of Management. She has published
extensively on the subject of international management. She is also the Editor-in-Chief of Cross Cultural
& Strategic Management.
Linda Berg was Master’s students at Stockholm Business School of Stockholm University, Sweden
when this research was conducted.
Nazanin Nematshahi was Master’s students at Stockholm Business School of Stockholm University,
Sweden when this research was conducted.

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