A Comparison of International and Domestic New Ventures

Differences between international new ventures (INVs) and domestic new ventures (DNVs) were examined using a sample of 214 IPO new ventures (ventures 6 years old or less). INVs were found to be significantly different on the basis of their entrepreneurial team experience, strategy, and industry structure. Specifically, the entrepreneurial team of INVs exhibited higher levels of previous international and industry experience. The strategies of INVs were more aggressive, and they operated in more channels of distribution than did DNVs. INVs competed on the basis of differentiation, placing greater emphasis on product innovation, quality, service, and marketing as strategic weapons. In addition, INVs were more likely than DNVs to operate in industries characterized by a high degree of global integration.     

International new venture performance: Role of international entrepreneurial culture,ambidextrous innovation,and dynamic marketing capabilities

International new ventures (INVs) contend with environmental dynamism in global markets, compelling firms to enhance their innovation and marketing capabilities. While the INV literature is growing, it is not informative as to how INVs develop and utilize dynamic capabilities to overcome resource-constraints to enhance performance. We utilize the concept of international entrepreneurship culture (IEC) to better understand how INVs advance innovation and dynamic marketing capabilities to succeed in their internationalization activities. Building on the dynamic capabilities view (DCV), we empirically examine the relationships among IEC, ambidextrous innovation, dynamic marketing capabilities, and INV performance under varying levels environmental dynamism. The findings highlight that IEC influences both ambidextrous innovation and dynamic marketing capabilities; and, together, these link to INV performance gains. Furthermore, this research finds support for the mediating effects of ambidextrous innovation and dynamic marketing capabilities in the IEC – INV performance relationship. Additionally, the results indicate an international entrepreneurial culture is of greater significance in developing ambidextrous innovation when environmental dynamism is present. The study context is a sample of 286 high-technology INVs from India, a large and dynamic emerging market.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.     

Post-entry survival of developing economy international new ventures: A dynamic capability perspective

Recent research suggests that the capabilities needed for the survival of international new ventures (INVs) may be at odds with the original aims that had brought them into the international markets. INV mortality is exacerbated by uncertainty and lack of familiarity with the host market environment, which elevates the liabilities of newness, smallness, and foreignness in the initiating companies. We investigate the key factors that determine the post-entry survival of developing economy INVs by analyzing in-depth seven software INVs originating in the developing economy of Pakistan. These INVs survived the 2000 dotcom crisis and the 2008 global financial crisis, and continue to grow. Based on a dynamic capability view on the INVs’ internationalization and survival from sensing-seizing-reconfiguration angles, we find the founders’ entrepreneurial orientations and network development capabilities (sensing), specialized product focus and niche market development (seizing), and transformation and renewal capabilities (reconfiguration) are the key capabilities that enhance the post-entry survival of these INVs. Importantly, we find that a stable leadership and the post-entry international experience of the leadership team continuously feed into facilitating the creation and maintenance of dynamic capabilities. This paper identifies key strategic aspects that determine the post-entry survival of the developing economy INVs.     

International entrepreneurial marketing strategies of MNCs: Bricolage as practiced by marketing managers

The extant research lacks information on entrepreneurial marketing in large international firms. This study explores the international entrepreneurial marketing strategies of multinational corporations (MNCs), and its results reveal that MNC marketing managers use bricolage to develop international entrepreneurial marketing. A novel finding of the study is that the international entrepreneurial marketing strategies of MNCs include co-innovation, accelerating customer value, and international expansion based on regional market leadership. Marketing managers use both parallel and selective bricolage in their international entrepreneurial marketing. Environmental uncertainty and entrepreneurship culture are important drivers of the implementation of bricolage to develop international entrepreneurial marketing. The research findings can inform MNC management of the options available to utilize corporate venturing to facilitate bricolage and in turn to realize international entrepreneurial marketing strategies.     

International entrepreneurial capability: The measurement and a comparison between born global firms and traditional exporters in China

This study presents the development and application of a new measure of international entrepreneurial capability. The data were collected from manufacturing firms in China, both traditional exporters and born global firms. Five key dimensions of international entrepreneurial capability were identified from the capability and entrepreneurship literature. After scale purification and validation, this new measure was used to examine the relationship between international entrepreneurial capability and global market performance. Born global firms are statistically different from traditional firms along three dimensions: international learning capability, international networking capability, and international experience. Implications and future research directions are then provided.     

Predictive and effectual decision-making in high-tech international new ventures – A matter of sequential ambidexterity

This study investigates the international opportunity exploration and exploitation processes of high technology international new ventures (INVs) operating in the global medical devices sector. Drawing upon the effectuation and causation perspectives, we contribute to the micro-foundations of international entrepreneurship research in the early innovation development space by focusing on decision-making logics of techno-entrepreneurs of INVs. Specific focus is afforded to the phases of their exploration and exploitation of international opportunities leading to international new venture creation. In the pre-start-up and start-up stages of international new ventures, we find that sequential ambidexterity applies to how the subject firms manage the exploration and exploitation of opportunities in the delivery of their innovations to global markets.This research advances prior international entrepreneurship studies by focusing on the opportunity and innovation processes on the individual level. We identify different decision-making logics in the different phases and contrary to earlier findings in the international entrepreneurship (IE) area, we found causation logic to dominate the initial stages of exploration and effectuation logic, in the latter stages. Prior commercial experience presented itself as a key determining factor in the decision-making path chosen by international techno-entrepreneurs. Our study further extends the view of organizational ambidexterity by offering empirical insights into the relevance of sequential ambidexterity for understanding the processes of innovation exploration and exploitation in high-tech INVs and the decision-making logics driving these processes.     

Managerial Resource Allocation and International Performance

Abstract

The “global village” phenomenon has resulted in an increase in the number of articles devoted to examinations of international marketing strategy and, importantly, to its impact on international performance. Notably, previous research has examined the impact of standardization (versus adaptation) and the content of marketing strategies on performance. There is little empirical work on the relationship between the resource devoted to international operations and the success achieved in these operations. Given the important performance implications of this relationship, the research reported here adds to this limited body of research. First, it uses three measures of resources allocated to international operations, including international strategic planning, an underutilized construct in international research. Second, it includes two performance dimensions: objective and subjective (satisfaction). Third, it examines the relationships between allocated resources and the two performance dimensions. Finally, it examines these relationships in Israel, thus extending the generalizability of previous research. The relationship is tested with data from Israeli respondents to a mail survey. The results are used to generate international research and managerial implications.     

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 Entrepreneurial Perspective on the Marketing of Charities

ABSTRACT

This paper discusses marketing activities within charities, with specific reference to the applicability of an entrepreneurial approach, and cause marketing. The efforts of these institutions in recent years to apply the tools of conventional marketing to the services they provide in the markets which they serve is laudable. However, it is argued that in times of environmental turbulence, this is necessary but not sufficient, and that an entrepreneurial perspective on marketing needs to be adopted particularly in relation to cause marketing efforts. Here are elements of risk-taking, proactiveness and innovativeness, and a more recent notion of “network-spotting” or object-orientation. The concept of entrepreneurial intensity in this regard is introduced, as well as a process which can be applied to entrepreneurial marketing in charities. Finally, the obstacles to entrepreneurial marketing by charities are identified.     

Entrepreneurial orientation and international scope: The differential roles of innovativeness,proactiveness, and risk-taking

This research integrates the international business and entrepreneurship literatures by examining the independent influences of innovativeness, proactiveness, and risk-taking on the ability of a firm to broaden its scope across international markets. For each dimension of entrepreneurial orientation, a cost–benefit framework is applied to highlight the trade-offs associated with different levels in the internationalization context. Based on a unique dataset of 500 SMEs spanning 10 industries, the results reflect the consequences of being “stuck in the middle” with respect to their strategic posture on innovativeness and proactiveness, but reveal a nuanced role for risk-taking behavior. The non-uniform and non-linear relationships from the findings contribute to a better understanding of when the individual dimensions of entrepreneurial orientation help or hinder entrepreneurial firms in the internationalization process.     

International springboard as an entrepreneurial act

International springboard is an entrepreneurial act that requires international entrepreneurial orientation (IEO). An important aspect of international springboard is the establishment of a deeply localized flagship foreign subsidiary to help pursue diverse international strategic goals. We model parent-level IEO as a mediator in the relationships between diversity of international strategic goals and flagship subsidiary localization strategies (customer responsiveness, market scope, and local cooperativeness). The results from a sample of 208 Chinese MNEs demonstrate that the three dimensions of IEO (innovativeness, proactiveness, and risk taking) play an important but differentiated mediation role. The study illustrates the connection between parent-level entrepreneurial behavior and subsidiary-level strategic actions through which MNEs capture cross-national entrepreneurial opportunities.     

The dynamics of experiential learning: Microprocesses and adaptation in a professional service INV

In international new ventures (INVs), experiential learning happens in quick succession and across a wide number of diverse contexts. Yet, we lack an empirical understanding of the microprocesses through which INVs learn and adapt in their foreign expansion. Understanding those microprocesses is important because timely adaptation can save the venture time and resources, thus promoting sustainable growth. In this study, we investigate the dynamics of experiential learning and adaptation in the internationalisation process of an INV in the professional service sector. Findings from our study illustrate that the firm applies deliberate experiential learning by developing, revising, and finalising criteria for important dimensions in the international growth process, and adapts its internationalisation practices accordingly. We further show that deliberate experiential learning is predicated on an actively and closely monitored learning process, involving critical evaluation, adjustment of criteria, and acceptance of affordable mistakes, as opposed to learning by default.     

Explaining the formation of international new ventures: The limits of theories from international business research

International new ventures (INVs) represent a growing and important type of start-up. An INV is defined as a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries (Oviatt and McDougall 1994). Their increasing prevalence and important role in international competition indicates a need for greater understanding of these new ventures (Oviatt and McDougall 1994).Logitech, as described in a case study by Alahuhta (1990), is a vivid example of an INV. Its founders were from two different countries and had a global vision for the company from its inception. The venture, which produces peripheral devices for personal computers, established headquarters in both Switzerland and the U.S. Manufacturing and R&D were split between the U.S. and Switzerland, and then quickly spread to Taiwan and Ireland. The venture's first commercial contract was with a Japanese company.Using 24 case studies of INVs, we found that their formation process is not explained by existing theories from the field of international business. Specifically, neither monopolistic advantage theory, product cycle theory, stage theory of internationalization, oligopolistic reaction theory, nor internalization theory can explain the formation process of INVs. These theories fail because they assume that firms become international long after they have been formed, and they therefore highlight large, mature firms. They also focus too much on the firm level and largely ignore the individual and small group level of analysis (i.e., the entrepreneur and his or her network of business alliances).We propose that an explanation for the formation process of INVs must answer three questions: (1) who are the founders of INVs? (2) why do these entrepreneurs choose to compete internationally rather than just in their home countries? and (3) what form do their international business activities take?Who are the founders of INVs? We argue that founders of INVs are individuals who see opportunities from establishing ventures that operate across national borders. They are “alert” to the possibilities of combining resources from different national markets because of the competencies (networks, knowledge, and background) that they have developed from their earlier activities. Following the logic of the resource-based view of the firm, we argue that the possession of these competencies is not matched by other entrepreneurs. Only the entrepreneur possessing these competencies is able to combine a particular set of resources across national borders and form a given INV.Why do these entrepreneurs choose to compete internationally rather than just in their home countries? The founders of INVs recognize they must create international business competencies from the time of venture formation. Otherwise, the venture may become path-dependent on the development of domestic competencies and the entrepreneur will find it difficult to change strategic direction when international expansion eventually becomes necessary. As the founder of one INV explained, “The advantage of starting internationally is that you establish an international spirit from the very beginning” (Mamis 1989:38).What form do their international business activities take? Founders of INVs prefer to use hybrid structures (i.e., strategic alliances and networks) for their international activities as a way to overcome the usual poverty of resources at the time of start-up.This study has important implications for the practice of management. In financing decisions relating to INVs, venture capitalists and other venture financiers should look for entrepreneurs who have a global vision, international business competence, and an established international network. When entrepreneurs start INVs they should create hybrid structures to preserve scarce resources. Finally, given the path-dependence of competence development, founders of new ventures should consider whether establishing a domestic new venture with plans to later internationalize will be as successful a strategy as establishing a new venture that is international from inception.     

A shift in perspective? The role of emotional branding in shaping born globals’ performance

Branding strategies have been at the core of marketing and strategy literatures for decades. Global brands are known for their positive influence in increasing customer trust and confidence, thus reducing the risks associated with foreign operations from the firms’ standpoint. These positive effects of global brands have led to research exploring brand image while emphasizing its relevance in positioning, gaining competitive advantage, and facilitating firms’ international business. Born-global firms (BGs) can mostly benefit from harnessing brand image, mainly by reducing market-related uncertainties while establishing a brand-based reputation and thus enhance their international expansion. However, very few attempts have been made to investigate the role of branding in advancing BG performance. Through a survey-based study including 147 Israeli BGs, complemented by 11 in-depth interviews with BG managers, we investigated the distinct role of functional and emotional brand-image aspects. The findings demonstrate that emotional branding bears a significant impact on BG performance. This impact reaches beyond the influence of innovativeness and marketing intelligence on BG performance. Surprisingly, while functional branding was enhanced by firms’ innovativeness, it showed no significant impact on international performance.     

Functional and contextual dimensions of INVs’ alliance partner selection

Prior research on the selection of international alliance partners calls for investigation of the potential specificity of selection criteria for evaluating partners for alliances with different objectives or functions. The present study responds to this need and contributes to the development of the field of international entrepreneurship by examining the relation between the alliance function and the criteria chosen. We studied three alliance functions: R&D, production, and marketing. Second, for each alliance function, we analyzed the criteria selected within two contexts: developing countries and those that consider emerging markets in their partner choice set. Data were collected through semi-structured interviews with 25 executives from international new ventures (INVs) in two major North American biotechnology clusters, representing 239 alliances; 65.7 % of these were signed with international partners. Results indicate that, aside from compatibility/complementarity of resources (R&D and production alliances), all criteria used within a single function are unique to that function. Furthermore, these criteria differ somewhat when the potential partners considered by a firm include those from both emerging and developed markets, compared with firms that limit potential partners to those in developed market contexts. Finally, the study reveals that respondent firms integrate country, industry, and market attractiveness factors with partner selection criteria for marketing alliances. This suggests that, for many firms, market choice and partner selection are not successive steps. The study’s originality lies in its focus on the relationship between alliance function and partner selection criteria used by INVs as well as within different contexts.     

The rapid internationalization of high technology firms created through the commercialization of academic research

This article uses the international entrepreneurship framework developed by Jones, M. V., & Coviello, N. E. (2005). Internationalization: Conceptualizing an entrepreneurial process of behavior in time. Journal of International Business Studies, 36(3): 284–303, to explore the internationalization of high technology firms created through the commercialization of academic research. In particular, the effect of networks and entrepreneurial orientation is explored. Theoretical sampling resulted in four cases being studied. The data suggests that the “fundamental” networks of the academics involved in the firms assisted in the identification and exploitation of initial opportunities to internationalize. The research also suggests that only certain dimensions of entrepreneurial orientation impacted the internationalization of firms. Specifically, risk taking, technological innovativeness, and autonomy in certain parts of the organization assist in the entrepreneurial stages, while proactiveness and product–market innovativeness assist the success of firms internationally.     

Characteristics of Immigrant Entrepreneurs and Their Involvement in International New Ventures

We studied 561 young firms in Australia to understand the involvement of immigrant entrepreneurs (IEs) in international new ventures (INVs). We found that IEs are overrepresented in INVs and have many characteristics known to facilitate INV success, including more founders, university degrees, international connections, and technical capability. Our study has implications for immigration policy and economic policy and the efficient use of a nation's human capital. This research challenges a necessity‐based stereotype of immigrant entrepreneurs by identifying areas in which immigrant entrepreneurs have natural competitive advantages over native entrepreneurs (NEs). This research makes a contribution to the theory of immigrant entrepreneurship by identifying the significant role of immigrant entrepreneurs in INVs and the suitability of immigrant entrepreneurs for the development of INVs. We inform diverse streams of research in transnational and immigrant entrepreneurship with broader strategic work on the creation of INVs. © 2013 Wiley Periodicals, Inc. This research was partly funded by an Australian Academy of Social Sciences research grant. A previous version of this paper was presented at Babson College Entrepreneurship Research Conference (BCERC), 2011, Syracuse.     

Internationalising Entrepreneurship Education

Despite growing policy and research interest in small firm internationalisation, little attention has been focused on the international dimensions of entrepreneurship and even less on the academic formation and personal/professional development of international entrepreneurs. The need to address these issues is particularly crucial in light of the emergence of small entrepreneurial “born global” firms that have able to take advantage of technological advances to internationalise rapidly. This contribution outlines and evaluates approaches that have been adopted to embed international entrepreneurship dimensions in undergraduate and postgraduate business programmes in Ireland. The authors contend that many of these mechanisms are eminently transferable to educational programmes in other locations.