A specialty store’s perspective on retail internationalization: a case study

Retail internationalization is an important trend for today’s retailers. However, the appropriateness of the strategy for all retailers has not been fully addressed. Most of the literature is based on experiences encountered after businesses have entered their new marketplaces. Very little information exists about strategic considerations occurring prior to international expansion. This study contributes to retail internationalization theory by partially validating a conceptual model of decision antecedents (Simpson and Thorpe, 1995). Data collected from an idiographic case study using a qualitative methodology support the conceptualization presented in the model, indicating that certain pre-conditions should exist in the retailer’s domestic environment, act as motives for considering a global expansion strategy, and drive the internationalization decision-making process forward.     

Born global or local? Factors influencing the internationalization of university spin-offs—the case of Halmstad University

A wealth of research in the past decades has examined born globals or international new ventures, which are firms that from inception view the whole world as a market and as a source to access resources. Many of these firms build their competitive advantage on high-tech knowledge. However, although many studies have shown how born globals can achieve success if they access resources through their relationships from actors in their networks, few studies have explored the relationship between born globals and universities. Universities are important actors in creating new technology knowledge, and many studies have shown how new firms, or so-called university spin-offs (USOs), are formed around universities. The current study explores why some USOs are successful in their international growth strategy and discusses the factors that influence and facilitate the internationalization process. The study investigates 10 USOs around the newly established Halmstad University in Sweden and finds that universities have a positive effect on firm creation and initial international growth. The regional competence base increases from the establishment of a local university, primarily by strengthening the regional human capital and by increasing university research. This study shows that researcher entrepreneurs’ ventures start as born globals, but that these firms do not continue to grow. Born global business models, per se, do not lead to competitive advantage and successful internationalization. Instead, a strategy built on customer focus and an ability to adapt to different customer demands lead to growth, and the location of growth is dependent on the size of the home market. This study also shows that student entrepreneurship can be a successful growth strategy for USOs focusing on both international and local markets.     

Antecedents and outcomes of digital platform risk for international new ventures’ internationalization

With the growing trend of using digital platforms for internationalization, the management of digital platform risks in international markets has become a critical issue. However, academic research in this area is sparse. This study develops and tests a theoretical framework of the drivers and outcomes of digital platform risk for international new ventures (INVs). Specifically, drawing on transaction cost theory, we identify sets of antecedents of digital platform risk including product specificity, foreign market uncertainty, foreign market competition, and home market institutional voids. We examine the effect of digital platform risk on the internationalization scope of INVs. Based on a unique sample of Chinese INVs, our empirical findings indicate that digital platform risk tends to reduce INVs’ internationalization scope. However, the negative effect is mitigated by INVs’ entrepreneurial orientation. Our proposed drivers of digital platform risk are supported. The paper ultimately discusses the theoretical and managerial implications.     

An empirical study on the timing of big retailers’ initial internationalization: Influence of the target market and entry-mode choice

This paper examines the timing of big retailers’ initial internationalization and proposes a theoretical framework. Then, the framework is tested with the proportional hazard model and data of European and U.S. big retailers. Empirical results show that retailers’ entry timing is jointly influenced by the economic conditions of both the home market and target foreign markets, cultural and geographical distance, and the entry mode. Based on these findings, this article offers suggestions to China’s big retailers whose initial internationalization has just started.     

When a picture’s worth a thousand words: The effects of visual construal priming on information acquisition and choice

Individuals acquire information in an attribute- or alternative-based way depending on the construal level of the choice situation. This research contributes to the literature by showing that different information acquisition strategies can emerge not only as a function of the psychological distance from the object of evaluation but also through situational cues unrelated to the evaluation task, such as a visual priming. Furthermore, results show that which pattern of information acquisition is adopted in turn affects individual choices. While the literature has already found a direct effect of construal levels on choices, the present analysis supports the existence also of an indirect effect, mediated by the information acquisition pattern. Consequently, managers can implement simple tools, such as visual stimuli alongside the presentation of product-related information, to display information consistently with individuals’ construal levels, bearing in mind that the way consumers acquire information is a predictor of their choices.     

The internationalization of small firms: The relationship between the global mindset and firms’ internationalization behavior

Some firms in internationally oriented industries are internationalized while other comparable firms in the same sector or industry do not. Observing this difference in strategic behavior among small firms led us to consider how differences in CEOs’ attitudes, international orientation, and mindset might explain it. Therefore, this study adopts a cognitive perspective on management to explore the formation of the global mindset and the relationship between the global mindset of small-firm decision makers and their firms’ internationalization behavior. A theory-based conceptual model and measurement instrument are developed and—using structural equation modeling—the model is estimated based on empirical data from cross-sectional samples of small Norwegian and Portuguese firms. The study finds: (1) a strong causal relationship between the global mindset and firms’ internationalization behavior; (2) the combination of the findings and substantive theory indicates that the main driver of firms’ internationalization operates through the global mindset. This study also covers the factors that strongly influence the formation of a global mindset, especially the decision makers’ work experience and personal characteristics in terms of propensity to interdisciplinary collaboration, cognitive flexibility, and networking capability. Based on these findings, suggestions are made for policies that can foster the internationalization of small firms.     

Retailers׳ expansion mode choice in foreign markets: Antecedents for expansion mode choice in the light of internationalization theories

Whenever a retail company expands its store network in a foreign market, decisions have to be made about how this can be achieved. Existing studies of retail internationalization have usually analyzed the “entry mode” choice as an end in itself, and not as the start of a firm׳s international development. In addition, there is much debate in the academic literature about the antecedents for retail foreign operation mode choice and the relevance of generic internationalization theories to international retailing. Therefore, the objectives of this research are (1) to investigate the paths of entry and subsequent expansion modes pursued by retailers in international markets and (2) to develop and test a model of expansion mode antecedents in the light of generic business internationalization theories. This is achieved on the basis of data collected from 43 French fashion retailers and a PLS-SEM approach. Results show that (1) retailers clearly differentiate between entry and expansion modes; (2) the international marketing plan, the perceived attractiveness of the foreign market, and strategic and ownership conditions are the key antecedents for the choice of an expansion mode. After comparing the results with the explanations proposed by the generic internationalization theories, a multi-theoretical framework is proposed which draws from the Uppsala internationalization process model, network theory and the born-global theory. The findings provide a wealth of information for retailers׳ use in choosing appropriate foreign operation modes.     

Let’s get real: new continental philosophy’s methodological imperative

This paper elucidates the implications of the ontological turn within continental philosophy for social researchers. In my literature review, I focus on the work of ?i?ek, Badiou, and Ferraris, and I identify three challenges which we must address. First, their work demands increasingly realist approaches to social research. Building on this, the second challenge is to find a methodology which can serve this realist approach; here, I argue that critique of the critical theory tradition is most appropriate. The third and final challenge is to identify appropriate concrete methods. I do so and then provide an example of how these methods could be applied in the study of sustainable food production. Ultimately, I argue that the most important intervention is an ethical one, as this tradition compels us to produce knowledge which benefits the comparatively disadvantaged in society. I conclude with specific implications for my own field of consumer research.     

Firm exits as a determinant of new entry: Is there evidence of local creative destruction?

This study posits that a local process of creative destruction provides an impetus to regional industrial renewal. We argue that exits of older firms release resources that stimulate local entry. New entrants add value to these resources by redeploying them in more productive uses. We test our hypotheses with a unique longitudinal database encompassing the entry and exit of Canadian manufacturing enterprises. We find that exits of old firms increase entry and that on average new entrants are more productive. Persistent high local rates of exit, however, deter entry.     

Predicting new venture survival: An analysis of “anatomy of a start-up.” cases from Inc. Magazine

This article tests the insights and predictions of venture success as offered by reporters and experts in Inc. magazine, to the predictions generated from an analysis of data from a venture screening questionnaire. The venture screening questionnaire, consisting of 85 items covering four broad categories: (1) Individual Characteristics; (2) Entrepreneurial Behaviors; (3) Strategy; and (4) Environment, was used to evaluate 27 “Anatomy of a Start-up” articles from Inc. magazine. The creation of the questionnaire was guided by the following premises:Individual Characteristics. We hypothesized that the chances of venture survival would be improved if: (1) entrepreneurs had substantial knowledge and ability at the beginning of the start-up story; (2) entrepreneurs gained knowledge and ability during the start-up process; and (3) entrepreneurs continued to demonstrate substantial knowledge and ability at the end of the start-up story.Entrepreneurial Behaviors. We hypothesized that entrepreneurs who expended more effort in any of the following activities would be in new ventures that survived compared to entrepreneurs who expended less effort: Finding and Refining the Opportunity—comprised of 9 different activities, such as, defining the purpose of the business, planning, analyzing competitors; Acquiring Resources and Help— comprised of 15 different activities, such as, finding investors, getting advice from lawyers, getting a loan, acquiring technical expertise; Operating the Business—comprised of 5 different activities, such as, dealing with distributors, managing the day to day operations of the business; Identifying and Selling to Customers—comprised of 5 different activities, such as, identifying specific customers to sell to, selling to customers, managing sales channels; Outside of the Business Issues—comprised of 4 different activities, such as, dealing with family problems, spouse, and friends.Strategy and Environment. The strategy and environment variables were characteristics requiring comparisons of the relative performance of new firms vis-à-vis other competitors and their industry characteristics, much like the questions used in PIMS research: first to entry, degree of innovation, rate of industry growth, size of market, relative price, and relative quality. There were 28 questions in this section of the instrument. We hypothesized that niche oriented strategies and high growth environments might be strategy and environmental characteristics common to startups that survived.In total, there were 85 questions that comprised the venture screening questionnaire.New Venture Survival. The measure of new venture survival for this study was a determination of whether the new venture described in each Inc. magazine article (Longsworth 1991) was still in operation as of January 1995. This date is nearly 4 years after the last case study that we analyzed was published (September 1990), and nearly 7 years after the first case study was published (February 1988). We were able to determine that of the 27 new ventures profiled in the “Anatomy of a Startup” series published in Longsworth (1991), 17 of these ventures were still in operation.A discriminant analysis was performed that resulted in seven variables that correctly classified 85% of the cases into new venture survivors or non-survivors. New ventures that survived were more likely to have: (1) entrepreneurs who gained knowledge and ability during the founding process; who devoted greater efforts to (2) dealing with suppliers; (3) analyzing potential new entrants and who (4) devoted less time to determining the identity of the business; businesses that had (5) “fundable” resource requirements (6) focused on products or services that were designed or produced to order; and (7) were in high growth industries. The classification accuracy of the model was much better than industry experts (55% correct), competitors (55% correct), venture capitalists and financiers (40% correct), and customers (38% correct).Even though the discriminant analysis was better able to predict venture survival or non-survival compared to the experts, there are significant limitations to the reliability and validity of this one particular model, and the data set used. The primary value of this exercise involves making obvious the variables that observers use to make judgments about predicting venture success. One of the frustrations we experienced in analyzing the expert’s predictions was our inability to glean consistent and general “rules of thumb” about new venture success from their observations. We conclude by discussing the value of academic research on new venture success predictors vis-à-vis other avenues of inquiry and expertise: popular journalism and practice.     

Learning from own and others’ previous experience: the contribution of the venture capital firm to the likelihood of a portfolio company’s trade sale

The objective of this paper is to examine to what extent different venture capital firms contribute to the likelihood that the portfolio company in which they invested will realize a trade sale. We use arguments from learning theory to hypothesize the relationship between vicarious, experiential and congenital learning of the venture capital (VC) firm and the trade sale hazard of its portfolio companies. Based on our analysis of 206 VC-backed UK start-ups, we find that both trade sale experience of the VC and learning from syndicate partners with trade sale experience significantly increase the trade sale hazard. The routines and procedures learned from experienced syndicate partners complement experience accumulated through trial and error. Congenital trade sale experience of the investment managers on the contrary has no significant influence on the acquisition hazard.     

The entrepreneur's mode of entry: Business takeover or new venture start?

We extend the well-known occupational choice model of entrepreneurship by analyzing the mode of entry. Individuals can become entrepreneurs by taking over established businesses or starting up new ventures from scratch. We argue that the new venture creation mode is associated with higher levels of schooling whereas managerial experience, new venture start-up capital requirements and industry level risk promote the takeover mode. A sample of data on entrepreneurs from The Netherlands provides broad support for these hypotheses, and also bears out a prediction that entrepreneurs whose parents run a family firm tend to invest the least in schooling. We go on to discuss the implications for researchers, entrepreneurs and public policy makers.     

A case study on the internationalization process of a ‘born-global’ fashion retailer

This case study on Zara elucidates the expansion strategies used by both born-global and gradual global fast-fashion retailers based on theories of internationalization. Aspects related to knowledge sharing, resource-based theory, and psychic distance are overlaid with Zara's internationalization strategies to advance understanding of the role fashion plays in dynamic internationalization. Zara employs a high-risk, high-reward model of internationalization to defend its unique merchandise and retail position by remaining completely vertical. Zara's born-global expansion strategy engendered a psychic distance paradox in that it was very successful in distant markets early on. It is proposed that fashion retailers may take note of Zara's success through the proposed ‘dynamic strategic planning process’ for expansion in international markets. Researchers can test the proposed framework empirically to investigate the theoretical constructs for both gradual- and born-global firms.     

The evolution of hierarchy toward heterarchy: A case study on Baosteel’s managerial systems

In recent years, the hierarchical nature of organizations is severely criticized. Will hierarchy be gradually replaced by networks? Or else, will it be revitalized through certain variations while remaining its distinct characteristics in the vertical relationship between upper and lower levels of an organization? Drawing upon research on “administrative organization” by Simon (1962), this research is based upon an in-depth case study on Baosteel, one of the “Fortune Global 500” Chinese iron & steel conglomerate. We find that heterarchy is a variation of hierarchy and applicable in both systems of operations management and strategic management. Moreover, the seemingly paradoxical decentralization of authority and concentration of business activities are discovered as the key driving forces in the formation of hierarchical structure. The existence of heterarchy adds variety to organizational world.     

Traces of foreign retailers – local knowledge-spillovers and strategy adaption within retail internationalization

ABSTRACT

Since the 1990s certain retail companies have evolved into some of the largest and most dispersed transnational corporations worldwide. However, within the ‘new era of retail distribution’ retailers are increasingly divesting from foreign markets. This study addresses these recent and under-explored dynamics by revealing the traces transnational retail corporations leave after divesting from a country. It explores the aspect of learning of host market retailers from entering transnational corporations (TNCs) and examines how foreign knowledge is adjusted in the business strategies of these local actors. It takes a fresh empirical slant using qualitative interviews with host market retail managers including former TNCs’ subsidiaries operating under domestic ownership. The emerging economy of Turkey serves as an empirical example. The paper finds that foreign retailers transfer firm-specific resources to the local retail through (1) demonstration and imitation, (2) vertical linkages with suppliers, (3) joint ventures and acquisitions, and (4) labor turnover of TNC trained staff. Certain successful local companies adjust the foreign knowledge based on their local knowledge and strengths, their high level of flexibility and deep territorial embeddedness, and create ‘hybrid’ business strategies. These findings suggest that dynamic capabilities are crucial to successful retailing in an international competitive environment. TNC managers should work with local staff in partnerships of equals and managers of locally operating companies should incorporate new knowledge by hiring TNC trained staff.     

Exploring the link between internationalization of top management and accounting quality: The CFO’s international experience matters

This study examines whether and how top management internationalization is associated with accounting quality. We combine upper echelons perspectives, agency theory, human capital theory and accounting research, and demonstrate that top management internationalization mitigates the level of managerial discretion in financial reporting. By decomposing the top management team, our analysis reveals that higher levels of accounting quality are associated with the internationalization of the CFO, not the internationalization of the CEO. In particular, we find that CFO’s international education and international work experience are important factors in higher accounting quality.     

The role of a municipality’s financial health in a firm’s siting decision

When deciding where to locate a new facility, a firm needs to consider the financial health of the municipality where its activities will take place. Unless it sites its facility in a financially viable community, a firm is putting a substantial investment at risk. Despite the importance of this issue, many firms pay insufficient attention to a municipality’s financial condition. Instead, they focus on matters such as the tax rate, the quality of the school system, or the absence of regulatory constraints. All of these features are important, but unless a municipality is financially healthy, they can evaporate before a company has attained its expected return on investment. There are 5 financial statements and 10 financial ratios that can be used to create a financial health template, which can help a firm to assess a municipality’s financial strength, or its counterpart financial weakness. The template goes beyond the debt-repayment focus of credit rating agencies to matters such as financial autonomy, cash flows, and borrowing capacity. We use data from three cities—Barcelona, Dublin, and Detroit (pre- and post-bankruptcy)—to demonstrate the template’s ability to facilitate comparisons among cities that are in different countries and that use different accounting systems.     

Are international new ventures really new? A process study of organizational emergence and internationalization

Firm inception is integral to the definition of the ‘international new venture’/‘born global’, yet has received little attention. In line with entrepreneurship research, we propose that inception be analysed as a process of organizational emergence. By means of a qualitative process-based case study, we identify the key inception events of six SMEs that according to conventional definitions could be considered INVs/born globals. Organizational emergence occurred prior to, and continued beyond, the date of incorporation, and included international activities. We reconceptualize INVs as firms that internationalize during organizational emergence. Our explanation for the international activities of INVs therefore integrates internationalization and inception processes.     

Born with a silver spoon of legitimacy but struggling for identity? The paradox of emerging spin-offs in a new sector

This study examines one paradox of the spinning-off process—on one hand, a spin-off's affiliation with the parent firm provides legitimacy that it can leverage for success; on the other hand, a stronger affiliation with the parent firm makes it difficult for a spin-off to resolve identity ambiguity and develop its novel identity in a new sector. The context of this study is a spin-off created by a reputable manufacturing firm but venturing in the software sector. I highlight challenges faced by the executives in leveraging spin-off's legitimacy at the same time it seeks to move away from the parent for developing a new identity. I find that a combination of the processes of sensegiving by a proactive leadership and applied sensemaking by the members is critical in resolving identity ambiguity. The study further develops propositions that synthesize the findings and contribute to the literatures of identity, legitimacy, and entrepreneurship.