Considering the predicaments of the Uppsala model of gradual less risky internationalization, we found that successful first-time exporters are more risk prone as they tend to follow more diversified internationalization strategies.
Department of Management - The University of Texas at Arlington
In this chapter, we report on transformations of an entrepreneurial firm during its internationalisation. During the processes of expansion the firm deploys different behaviours that indicate shifting mindsets from approaches that can be characterised as entrepreneurial to behaviours considered as managerial. In international business IB , value is generally considered as something that is created in a global value chain Gereffi et al. Conventional views suggest that companies engage in exchange with other companies across different countries in a somewhat sequential manner e.
Nevertheless, there is not much discussion on how value is created or derived throughout these interactions. In international business literature several researchers have applied the microeconomic concepts scope and scale economy in the context of foreign market servicing modes. Researchers discussing the optimal timing of Foreign Direct Investments have shown that in terms of total costs, it is favorable first to export to the foreign market via a local sales agency or a distributor due to scope economies and later on to switch to a production subsidiary due to scale economies.
Export channel volume is therefore conceptualized as one of the determinants of entry mode choice. This chapter focuses differently by taking a network approach to internationalization.
Setting of from the triadic entry nodes concept we highlight the value offered to small firms in the internationalization process by intermediaries operating as network informants, integrators and coordinators. Moreover, we challenge the viewpoint that foreign market entry is a mona dic relationship between one producer and one foreign party. Literature on SME internationalisation often ignores that internationalisation is a process that involves the whole value producing chain of activities.
This chapter takes a holistic view to the internationalisation of an SME by examining, also its capabilities to manage the value chain.
Therefore, it makes an important contribution to organisational capabilities, value chain management and international business literatures. The qualitative case study captures the capabilities needed to manage the value chain in a higher-level construct of value chain management capability. The value chain management capability is found to consist of international orientation, network capability, market orientation, technological capability and teamwork management capability.
According to studies on born globals Madsen and Servais and international new ventures Oviatt and McDougall , firms enter far markets soon after establishment. In the process of firm internationalization, intelligence on foreign markets is required. Regarding the internationalization process of small and medium-sized firms, one study described the internationalization intelligence process as how information and knowledge on international opportunities is identified, gathered, organized, and assessed Che Senik and Md Sham Thus, in this chapter, we define internationalization intelligence as relevant cross-border information gathered by firms in support of their internationalization process.
Small and medium-sized enterprises SMEs generally face tough competition in the countries where they are based.
The ongoing process of globalization exerts further competitive pressure on value creation in these firms Audretsch Value creation spreads over different levels Lepak et al. Consequently, in a manner similar to large companies, more and more SMEs face the challenge of searching foreign markets for opportunities, which forces firms to change their strategies rapidly.
At the same time, competition among knowledge-based SMEs intensifies, as these firms strive to develop capabilities faster than their rivals Teece and Pisano , to maximize created values Jensen , make them sustainable Ciasullo and Troisi , and increase value creation through mission Andersen or by project management practices Laursen and Svejvig According Bowman and Ambrosini value creation is determined by:.
How can small firms leverage the Internet when seeking to expand their business abroad? This question has been at the centre of academic inquiry ever since the introduction of the Internet. How do companies design their international structure? How do companies manage the process of international expansion? How does location specificity matter in this process? Gabbay, Tsungting Chung. Introduction to Part V.
Mitchell P. Koza, Silviya Svejenova, Luis Vives. Back Matter Pages About this book Introduction Everyday, more and more companies embark on international business.
Through a collection of articles by leading scholars in International Business this book answers fundamental questions such as: How do companies create value through global strategy? What are the sources of value creation?
How do companies organize themselves and manage the process of international expansion? How does location specificity matter in this process?
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