Innovation in Internationalization of Born Global firms

• Globalization and increased liberalization of markets have made it possible for many firms, large or Small and Medium –Sized Firms (SMEs), to be in many foreign markets, especially those in the global industries (Czinkota and Ronkainen, 2007; Doole and Lowe, 2008, 2004). Since trade barriers among markets have fallen dramatically, due to the effects of globalization, intense competition in many markets, and the spread of technological improvements in almost all sectors of any economy, many firms (small or large) seek to establish their presence in many foreign markets (Awuah, et. al., 2011; Doole and Lowe, 2008; Driffield and Love, 2007). Studies abound to shed light on why and how firms internationalize their business activities (Andersson, 2011; Moen, et al., 2004; Knight and Cavusgil, 1996; Johanson and Vahlne, 1990, 1977; Johanson and Wiedersheim-Paul, 1975). Although increased globalization, trade liberalization, and technological improvements do enable many firms (e.g. “Mininationals” or “Born Globals”) to serve several markets (Doole and Lowe, 2008; Czinkota and Ronkainen, 2007), there has emerged an intense competition among firms in all countries (Peng et al., 2008; Czinkota and Ronkainen, 2007; Beamish and Lu, 2004). For many SMEs, a number of factors (e.g. lower trade barriers, increased competition, rapid technological developments, shrinking market opportunities in domestic market, and firm-specific advantages combine to drive their rapid entry into foreign markets (Andersson, 2011; Peng et al., 2008; Moen, et al., 2004). SMEs that have, from the very inception of their establishment, had the drive to internationalize their business activities are termed “Born Global Firms”, in the subsequent sections to be addressed just as born globals (Andersson, 2011; Rialp et al., 2005; Knight and Cavusgil, 1996; Madsen and Servias, 1997). Previous studies about a firm’s internationalization has predominantly concentrated on big multinational firms, where their motives for internationalization, the pace and pattern of their internationalization have been widely studied (Qian and Delios, 2008; Johanson and Vahlne, 1990, 1977; Johanson and Wiedersheim-Paul, 1975; Cavusgil, 1984; Coviello, 2006). In recent times studies have emerged, which have found out that the pace and pattern of the internationalization of big multinational firms are not in line with the pace and pattern, through which born globals, for example, internationalize their business activities (Andersson, 2011; Andersson and Wictor, 2003; Moen, et al., 2004; Rialp, et. al., 2005; Knight and Cavusgil, 1996; Madsen and Servais, 1997).  However, extant literature is virtually silent on what it takes for a born global (a small international player with limited resources, for example) to compete with big and resourceful multinational enterprises in many international markets. Our contention is that born globals’ ability to use innovative solutions to create sustainable competitive advantages as they aspire to expand and grow in international markets will be very crucial. The pace and pattern at which born globals internationalize their businesses, in the face of intense competition in almost all markets, in order to provide innovative solutions that enable them to achieve competitive advantages in the marketplace is under-researched. This has been an important reason for the study of the present phenomenon.   As stressed by Doole and Lowe (2008), products and services offered by firms, these days, are becoming ‘commodities’ (i.e. ‘me too’ products/services), if firms are not able to differentiate the core product benefit or service by offering a bundle of benefits for target customers or users in a target market. For Porter (1985), the competitive advantage of a firm grows fundamentally out of the value the firm can create for its customers, irrespective of the markets in which a firm operates.  Operating across borders, though offers opportunities, dealing with new set of macro-environmental factors (e.g. politics, laws, economics, cultures, and societies) and intense competition, will demand that a born global, for example, differentiates its products and services that will help it to meet similar needs and wants of its transnational customers, while it adapts to meet different market-specific requirements and/or needs of customers (e.g. Doole and Lowe, 2008). And for Doyle and Stern (2006), a firm that is good at satisfying customer needs, better than its competitors can do, has the best opportunities to grow and expand. Hence, Born Globals and their growth and expansion narratives are worth studying.In view of the above, the purpose of the present study is to investigate a born global’s use of innovative solutions to create sustainable competitive advantages as it expands and grows in different international markets. To be able to achieve the above purpose, we seek to address the following research questions:Why and how does a born global firm enter any chosen foreign market?Which strategies does the firm develop and implement in order to provide innovative solutions that will help achieve sustainable competitive advantages as the firm strives to grow and expand in the marketplace?Does the firm use ‘go-alone’ strategies or does it use strategies that influence and are influenced by other actors and the effect thereof? 

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Nyckelord

Internationalization

Innovation

Born Globals

learning

network

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