Born-Globals and Culturally Proximate Markets

2004

Born Globals: Taking Stock, Looking Ahead INTRODUCTION The research on born globals is developing fast. This new breed of firms challenges old, well established views of internationalisation. Unlike 'traditional' multinationals which experienced relatively slow, incremental internationalisation processes, usually anchored on a sound domestic business basis, born globals embrace the world, or significant parts of it, as their market since (or almost since) inception. They emerge as international players, taking profit from globalisation and technological advances in information and communication technologies (Knight and Cavusgil, 2004), and focussing on niche international markets. Yet this research field remains largely unchartered. Several research strands have developed, espousing different operational definitions and theoretical bases. The newcomer will see many 'trees', many studies following multiple approaches, and will be faced with the difficult to find to what extent such 'trees' are part of a same 'species'. This raises some discomfort, and doubts with regard to the soundness of research paths. More than ten years have elapsed since Rennie's (1993) seminal paper. Even though the survey carried out by Rialp et al (2002) made a good contribution, there is a need to improve the chartering of the field, especially on what concerns empirical studies. This is the purpose of the present paper: it will take stock of, and analyse extant literature, to look ahead, identifying convergence axes, under-researched topics, and new questions to be answered. The present paper will be organised in six sections, including this introduction. The second will present the main issues raised by born globals literature as well as the main focus of the paper. Then, the research design is explained, highlighting the method used for analysing the foundations of extant literature. The results obtained are present in section four. 3 Two axes will deserve particular attention: theoretical approaches and operational definitions used. Typologies of born global studies will be developed under each axis. The fifth section provides a discussion of the results. The paper closes with a concluding section, where several questions will be raised as possible 'milestones' for guiding further research on the topic. THE ISSUES The pioneering research carried out by Nordic scholars (Johanson and Wiedersheim-Paul, 1975; Johanson and Vahlne, 1977; Luostarinen, 1979) established a paradigm of the internationalisation process which has been dominant for more than twenty years. The main tenets of such a paradigm were (Petersen and Pedersen, 1997): at the theoretical level, the time-consuming accumulation of experiential market knowledge leads to an incremental foreign market commitment; and at the operational level, such incremental process is translated into step-wise establishment chains as well as into a geographical expansion pattern like "rings in the water" (Madsen and Servais, 1997). It has been increasingly recognised, however, that-in a "shrunk" world and in an "accelerated" time-incrementalism was being challenged by emerging international business requirements (Johanson and Vahlne, 1990 and 2003a; Petersen and Pedersen, 1997). In fact, a new type of firms got academic attention in the nineties, following an internationalisation pattern in sharp contrast with the incremental process postulated by the 'Nordic School'. Fast international reach, innovative moves, and multi-faceted cooperative arrangements characterised these firms, named as born globals (Rennie, 1993), international new ventures (Oviatt and MacDougall, 1994), instant exporters (McAuley, 1999) or even supranationals (Hamel, 1995). These firms-called hereinafter born-globals to use a general label-are undoubtfully a by-product of globalisation (Knight and Cavusgil, 2004), but they 4 are simultaneously furthering it. In today's turbulent environment, firms must adapt quickly in order to survive and to achieve success, and need to forge opportunities, identifying global niches, often without relying on 'lead' markets. Reasoning on a 'traditional' internationalisation approach it becomes puzzling how these firms-often with no previous business experience, lack of knowledge about foreign markets, and scarcely endowed with financial resources-can compete and thrive internationally. Since the work of Rennie (1993), numerous scholars have studied these firms, and a wealth of literature emerged. So far, some areas of consensus were developed. It has been argued that entrepreneurs play a key role in the foundation phase, providing technical competencies, using strong and weak ties to design, manufacture and market distinctive products or services. Social capital is often assimilated to a resource, providing the young firm the credibility needed to get the 'right' to enter strategic international networks. Additionally, it was found that these firms tend to adopt international niche market strategies, often supported by a complex network of partners along the value chain-or else, based on the vertical segmentation of businesses. Are we faced with a paradigm change (Kuhn, 1962) in the study of internationalisation processes? We are not in a position now to respond such a question. The answer requires a closer look at the key issues addressed by the born globals literature. It seems, however, that we are still at a pre-paradigmatic stage. In other words, making a parallel with the development of industries, we appear to be at a fluid stage (Abernathy and Utterback, 1978), where no dominant design has emerged so far. There are too many descriptions and characterisations of this kind of firm, but the field remains-as it was argued above-'unchartered' in general terms. There is, therefore, a need to analyse the work undertook so far, to build a basis for future progress as well as to achieve scientific legitimacy.

International Business Review, 2004

Recent studies view the phenomenon of 'born global' firms as a contradiction to the stages theory. This paper shows that the internationalization process of 'born global' firms may be characterized by gradual increased commitment to foreign markets, albeit not necessarily according to the predictions of the classic stages theory.

Journal of International Business Studies, 2011

Born global" firms are not actually "born" global, but rather internationalize rapidly from their inception by expanding their geographic scope and extent of foreign operations. However, it remains unclear whether such firms:

Thunderbird International Business Review, 2006

This research is examining the Born Global companies, which are facing tremendous entrepreneurial and managerial challenges related to instant or rapid globalisation. A major research problem addressed is whether the strategies and processes of Born Globals differ essentially from that of other firms in respect to globalisation and global marketing. Based on a literature analysis we are first examining the concept of Born Globals, turning then into a detailed analysis of the characteristics of these companies. Survey results on 89 Born Globals are revealing that they can be found in high-tech, highdesign, high-service, high-knowhow and high-system business areas. Their domestic stage last in average only for 2.1 years, which is a large contrast to the traditional companies' corresponding ten time longer figures. Further, Born Globals can be classified based on their development stage into mature, growth, development, starting, entry, domestic and RD stage. Then, the study examines the globalisation and global marketing strategies of Born Globals through a multiple case study of 20 companies belonging to the above five product-business areas. Special attention is put on the mature Born Globals, which are found to have developed faster through traditional stages, jumped over some stages and even in some cases progressed in reverse order. Finally, the attention is turned to detailed examination of the identified challenges and their solutions for three particular interest groups: entrepreneurs, government policy makers, and professors and researchers responsible for education. The implications of the study results for entrepreneurs should be in particular important as managerial, research and development, sales and marketing, as well as financial challenges and solutions are covered in detail. Finally, this research concludes that although many of the Born Global findings deviate from the traditional companies behaviour, the stages model still seems to have a high degree of explanatory power.

Management International Review, 2014

Recent efforts have been made to operationalise the performance of bornglobal (BG) firms in ways that acknowledge their unique characteristics and strategies. This paper explores the BG development process and assesses the relevance of various types of performance measures. Two questions are addressed: first, which types of performance measures are most relevant to BGs in the various phases of their development? Second, how do initial market selection and internationalisation speed influence BG development, and therefore the relevance of performance measures? Drawing on international entrepreneurship theory, this study undertook a progressive focussing, theory development/refinement (abduction) approach. Utilising a multiple case study design, data were collected primarily through in-depth, face-to-face interviews with senior managers from Australian BGs and with industry experts and analysed using open, axial and selective coding. Data were collected from BGs across each of the three phases of BG development: pre-start-up/venture creation; early international entry/ development; and international growth/consolidation. Building on recent conceptualisations of the BG development process, we found that the relevance of performance measures is dependent, in part, on the BG's phase of development. Further, the rapidity of internationalisation and the psychic distance of initial markets influence the duration of each phase. The unique characteristics and strategies of BGs should be reflected in the measures used to evaluate their performance in each of the three phases. This study represents the first empirical examination into the measurement of BG performance across the phases of development, providing a foundation for future scale development.

Advances in International Marketing, 2001

This paper deals with the effects of firm age on export behavior and performance for small exporters. Using market and technology trends from the last decades, we have classified three generations of small exporters: the traditional, the flexible specialists, and the Born Globals. Building upon a sample of Norwegian exporters these three generations of exporting firms are compared using competitive advantage, manager orientation, export motives, and export strategy. The results revealed several significant distinguishing features between the generations. Important differences were the strong technological competitiveness, niche focus and widespread use of advanced communication technology in the two groups of recently established exporters compared to the older, traditional exporters. The study also showed that the various generations of firms had different export 1 performance antecedents. Key factors for the Born Globals were found to be technological advantage and niche focus combined with strong customer orientation. Among both the other groups -traditional exporters and flexible specialists -marketing advantage, product quality, and various manager orientation factors were important performance determinants. It seems that firm behavior and performance are partly contingent upon the environmental context in existence during the firm's year of establishment, which results in systematic differences between the generations of exporting firms. As the firm's year of establishment has often been a neglected variable in international marketing research, these results suggest we should pay more attention to firm age in future studies, as both export behavior and performance determinants vary between different generations of exporting firms. This study further concludes that we can now distinguish a new generation of exporters; the Born Global firms. One of the most important characteristics of these firms is their speed of internationalization; just a few years after establishment the Born Global firms achieve considerable sales in a number of export markets.

International Entrepreneurship and Management Journal

In recent years the emergence of so-called born-global firms -firms which start their international activities from their start up- has challenged traditional theoretical assumptions about the incremental process of internationalization, giving birth to the development of a new stream of studies. In order to give a contribution to this area of studies, the purpose of this paper is to empirically test a model to explain how well some factors are able to explain the level of international development of born global companies. A mail survey was conducted within a sample of born-global Italian companies, belonging to the most representative industries for the Italian economy (metal products and machinery equipment; furniture; chemicals and food). Findings support the validity of a model including five significant predictors: uncertainty and dynamism in the firm’s industry, operating in niche-based industries, markets’ and segments’ knowledge held by the founder/managers, product innovation and firms’ innovativeness, access to networks. Findings are discussed and managerial implications are drawn.

International Marketing Review, 2004

Companies that internationalise at or near their founding, "born globals," are emerging in great numbers world-wide. Characterised by a specific Gestalt of marketing-related competencies, they are playing an increasing role in international trade. Born globals are investigated using data from case and survey-based studies in Denmark and the USA. First introduces and describes the born-global phenomenon. Then, hypotheses are developed and tested via a structural model that represents key factors in the international success of this important breed of firm. Results suggest that born-global international performance is enhanced in the wake of managerial emphasis on foreign customer focus and marketing competence. Product quality and differentiation strategy also play important roles, particularly in the US firms. These and additional findings are discussed in light of their theoretical and practical implications.

Contemporary Management Research, 2016

The established literature on born global firms has tended to overlook the significance of industry factors on born global firms' internationalisation processes. This paper explores recent conceptualisations of the early internationalisation processes of born global firms and their drivers within an industry context to determine how and why industry characteristics impact the internationalisation of born global firms. Drawing on the born global literature, this study adopts an exploratory, qualitative approach. The results from a multiple case study analysis of four Australiabased born global firms suggest that industry characteristics are a critical factor influencing each firm's internationalisation decisions. The key findings include high levels of global integration motivating firms to internationalise, high levels of local competition driving the choice of international markets to improve the firm's position in its domestic market, and the choice of entry mode being determined by industry trends.

Technology Innovation Management Review, 2012