How to manage accelerated growth of internationalization for born globals.

• Author: Li, Pengyu

1. INTRODUCTION

   The interest in born globals started early in the 1990s, and an increasing number of publications have focused on this issue since that time (i.e. Oviatt and McDougall, 1994; Madsen and Servais, 1997; Knight and Cavusgil, 2004). In contrast to the traditional pattern of firms that operate in the domestic market for many years and gradually evolve into international trade (Johanson and Vahlne, 1977), the success of born globals depends on their international vision--they visualize the global market, and from inception seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries (Oviatt and McDougall, 1994). They also market through a strong network and a tightly managed organization focus on international sales growth to create value in organizations (McDougall and Oviatt, 1992; 2000). This phenomenon is especially popular in high-tech industries.

   Previous studies have focused on the definition of born globals, their characteristics, the various industrial and environmental influences that affect new venture globalization and the way born globals compete on the global stage (Madsen and Servais, 1997; Oviatt and McDougall, 1994, 1997; Moen, 2002). The common factors triggering and giving significance to this growing phenomenon include new changing market conditions, and technological developments in transportation and communication. In addition, the development of global networks and the importance of founder or entrepreneur capabilities have a critical role.

   Oviatt and McDougall (1994) and McDougall, Shane and Oviatt (1994) stated that an international new venture is a business organization that seeks to derive significant competitive advantage from the use of resources--transferring moveable resources abroad to be combined with less mobile resources in the destination country. Zahra and George (2002) further suggested that early and speedy internationalization stems from an absorptive capability. However we still know little about how born globals manage their resources and capabilities to accelerate their Internationalization growth: it remains something of a black box. In this study, we investigate the product and international market management of born globals to explain the process of early internationalization.

1. LITERATURE REVIEW

   1.1. Core Competence of Related Products

   Previous studies concluded that born globals focus on a narrow product market scope due to their small size; they extensively use networks of business partners to quickly enter multiple markets and make potential innovative products available. Especially in small countries, the firms are often focus on niche markets. They tend to focus on narrow product ranges and market leadership. Few studies have described this narrow product range in any detail. Chetty and Campbell-Hunt (2004) found born global products to be technological intensive and highly specialized. As such, knowledge sensitivity is a vital source of the core competence of born globals.

   1.2. Linking International Markets through Entrepreneurial Teams

   Existing studies on born globals have investigated entrepreneurial personal characteristics, prior experience and individual intention (McDougall et al., 1994; Eriksson, Johnson, Majkgard, and Sharma, 1997; Kundu and Katz, 2003). However, requirements pertaining to time, financial resources and knowledge prior to achieving certain market sales have led to greater recognition of the importance of the entrepreneurial team (Hambrick and Mason, 1984). Team members' relevant prior experience with initiating born globals in international markets in terms of market knowledge, industry information, and marketing technology can be transferred to the firms. Most of this knowledge stems from the personal networks of the venture team, as well as previous job experiences, relationships, and education backguard. Firms with limited resources can still enter global markets successfully based on team members' prior international business experience and knowledge of foreign markets. The prior experience and knowledge can help firms recognize initial international opportunities (Bengtsson, 2004).

   1.3. Targeting Leading International Markets

   Born globals rely on foreign markets as means of growth (Tallman and Li, 1996). Within the foreign markets, especially in developing countries, firms can focus on technological development and markets trends based on large customers and varying demands. Yet small firms with limited resources cannot immediately diversify within international markets at the outset. Therefore, the first targeted market usually is a leading market (such as the United States, Europe, or Japan); another option is to enter domestic and international markets concurrently (Coviello and Munro, 1997; Madsen and Servais, 1997). Starting in a leading foreign market can help firms reach economies of scale and build a positive reputation.

   1.4. Connecting International...