Nature and Internationalization of the Born Global - the Case of Three Finnish High-Tech SME's
Pulkkinen, Johanna (2002)
Kuvaus
Kokotekstiversiota ei ole saatavissa.
Tiivistelmä
This study concentrates on firms, which internationalize from the very beginning of their existence. The firms in focus have been termed born-globals, global stars-ups, international new ventures, infant multinationals and so on. In this study the term born-global is adopted and the main objective is to analyze the characteristics and internationalization strategies of these firms. Due to many changes in the business environment - such as niche marketing, international networking, and technological developments - a common trend today is increased and accelerated international competition of even smaller and younger firms. In addition to the typical advantages of smaller size such as flexibility and adaptability in operations, it has been argued that born-global firms and their managers can also be distinguished by characteristics such as strong international orientation, experience and risk-tolerance. The purpose is to explore if these characteristics occur in the Finnish born-globals and what possible other features could describe these firms and explain their rapid international development.
The internationalization strategies of born-global firms are analyzed through three main dimensions. The first dimension is market strategies. The essence in rapid internationalization is managing the risks of foreign entries in light of the resource-restrictions of the firm. The second dimension is related to marketing strategies. Earlier research suggests the born-global firms to follow a product differentiation strategy and emphasize distinctive marketing techniques. The third dimension concerns human assets as a source of competitive advantage and the relationships that the born-global firm utilizes for value creation and international growth. Based on these dimensions, a theoretical framework for analyzing the characteristics and internationalization strategies in the empirical part was presented.
The empirical part was conducted through a multiple-case study of three Finnish high-technology SME's. The results give support for most of the proposed characteristics and strategies. The most important internationalization triggers seem to be inadequate domestic demand due to niche focus, and strong international orientation and the experience of the company and its managers from inception. The companies targeted many markets simultaneously after initial entry, and often by employing many operation modes - both inward and outward. The country selection was foremost based on strategic considerations such as market potential. The fastest means to penetrate the markets is typically through different distributor partners. The companies stressed product differentiation - rather than cost-effectiveness - through unique technology, customized product service and quality. The marketing emphasizes branding, personalized promotion, Internet-marketing, seminars and tradeshows. From the other marketing mix variables, the role of price seems to be less sensitive especially in the early phase. Finally, whereas the human assets seem to be the source of unique advantage through innovativeness in R&D and international experience in marketing, industry networks are an important means for faster market penetration, development of technologies and support for manufacturing - thus enabling the born-global firm to focus on its core areas of expertise.
The internationalization strategies of born-global firms are analyzed through three main dimensions. The first dimension is market strategies. The essence in rapid internationalization is managing the risks of foreign entries in light of the resource-restrictions of the firm. The second dimension is related to marketing strategies. Earlier research suggests the born-global firms to follow a product differentiation strategy and emphasize distinctive marketing techniques. The third dimension concerns human assets as a source of competitive advantage and the relationships that the born-global firm utilizes for value creation and international growth. Based on these dimensions, a theoretical framework for analyzing the characteristics and internationalization strategies in the empirical part was presented.
The empirical part was conducted through a multiple-case study of three Finnish high-technology SME's. The results give support for most of the proposed characteristics and strategies. The most important internationalization triggers seem to be inadequate domestic demand due to niche focus, and strong international orientation and the experience of the company and its managers from inception. The companies targeted many markets simultaneously after initial entry, and often by employing many operation modes - both inward and outward. The country selection was foremost based on strategic considerations such as market potential. The fastest means to penetrate the markets is typically through different distributor partners. The companies stressed product differentiation - rather than cost-effectiveness - through unique technology, customized product service and quality. The marketing emphasizes branding, personalized promotion, Internet-marketing, seminars and tradeshows. From the other marketing mix variables, the role of price seems to be less sensitive especially in the early phase. Finally, whereas the human assets seem to be the source of unique advantage through innovativeness in R&D and international experience in marketing, industry networks are an important means for faster market penetration, development of technologies and support for manufacturing - thus enabling the born-global firm to focus on its core areas of expertise.