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International growth in born globals – value creation on international markets
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL), Centre for International Marketing and Entrepreneurship Research (CIMER).ORCID iD: 0000-0002-8194-2053
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL), Centre for International Marketing and Entrepreneurship Research (CIMER).ORCID iD: 0000-0002-0554-9591
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL), Centre for Technology, Innovation and Marketing Management (CTIM2).
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL), Centre for International Marketing and Entrepreneurship Research (CIMER).ORCID iD: 0000-0002-0419-8654
2015 (English)Conference paper, Published paper (Refereed)
Abstract [en]

Importance and key contribution

Research on firm’s that already from inception see the whole world as a market and/or the whole world as a source to access resources, so called born globals (Andersson & Wictor, 2003), have been growing during the last decades (Jones, Coviello and Tang, 2012).  These firms are characterized of innovative business models that are competitive on the global market already from inception (Hennart, 2013). To succeed with a continued international expansion, the born global firms need to adapt their respective business models for a more complex environment; in more institutionally remote markets. The continued growth phase of born globals are scarcely treated in earlier research (Gabrielsson & Gabrielsson, 2013).

Earlier studies on Born Globals have focused on Born Globals’ development in western, developed countries. Therefore there is a need to examine Born Globals’ activities on emerging markets (Kiss et al, 2012). The attractiveness and growth opportunities in emerging markets are perceived to be higher than what obtains in other conceivable markets of the world (Cavusgil, Knight, and Risenberger, 2012).

Important in this stage is handle relationship with different stakeholders on a global base. An important tool to handle this relationship is the companies’ branding strategy. Few studies have combined research on born globals’ internationalization and branding (Gabrielsson, 2005) and there is a need to further develop the knowledge about branding and international growth. This study aims to explore how born global companies are using brand management when growing on emerging markets. This study contributes to the international entrepreneurship field by exploring growth on emerging markets, it also contributes by adding knowledge from the brand management field to explore international growth.

Theoretical base

In recent studies the “global” part in the BG has been criticized (Lopez, Kundu and Ciravegena, 2009, Rugman and Almodovar, 2011). Some researchers argue that there a very few really Born Global firms with activities in the three economic and political power bases in the world. NAFTA, EU and the largest eight Asia-Pacific economies (Rugman and Almodovar, 2011). Implicit in research on Born Global firms is that distance (geographic, psychic, cultural, and institutional) is no longer an important issue when the international behaviour and international performance in a Born Global is discussed. We argue that the reason for that is a bias in the research treating Born Global firms with focus on companies that both have their origin and target markets in high-developed economies. Peiris, Akoorie and Sinha (2012) showed that most studies on Born Global firm were done on firms originating in developed countries and only a few studies were done on firms from emerging countries. Studies from emerging countries mainly were done on Chinese firms and very few studies has treated firms from Middle east, Africa or South Asia. Another reason why the Born Global research has not focused on institutional differences can partly be explained by the fact that the Born Global studies have looked internally at firm-specific factors (e.g. using resource-based view and knowledge-based view of the firm as a theoretical domain) (Andersson, Evers and Kuivalainen, 2014; Knight and Cavusgil, 2004).

We argue that institutional differences affect Born Globals’ international behaviour (scope, speed, and entry mode); and to investigate how institutional distances affect Born Global firms, it is important to include nations with a variety of institutional and cultural characteristics. Born Global firms from developed countries entering institutionally distant markets will meet a context that is different from their home markets. Regulations, culture etc. differ and relationships are often fewer and weaker than, the companies’ relationships with western companies.  Born Global companies from developed countries still first focus on other developed countries, followed by emerging markets (e. g China and Brazil). We argue that institutional distance still matters and that firms from developed countries still have more and stronger networks in other developed countries. More research is needed two explore how this influence Born Global firms’ internationalization processes.

Most studies on born globals have focused on firms in a business-to business context. Also this study is focusing on this sector. Even if most brand management studies have focus on business-to consumer sectors, there is an increasing stream of literature that has shown the importance of brand management also in business-to business settings (Gabrielsson & Gabrielsson, 2005). Brands are used to build relationships with customers. In emerging markets, western companies have fewer and weaker relationships, as the distance is longer (see the discussion above. Research is needed to explore how brand management can be used to create and sustain relationships on emerging markets. The above discussion lead us to the following research questions.

Research questions

How do born globals manage the organization’s international growth in in emerging markets?

Which role has brand management to create and sustain relationships with internal and external stakeholders on emerging markets?

Method and Findings

Emprical data will be gathered during the Spring 2015. A case approach is considered as the most appropriate to catch the complexity of value creating process in international network context (Yin, 1994). The case study approach is under-represented in studies about internationalization and has been recommended as a fruitful way to expand the knowledge in this area (e.g Andersson, 2000, Cavusgil, 1980). Eisenhardt (1989) recommends case studies as a fruitful way to give a deeper insight in conflicting literature, as well as sharpening the generalizability of different theoretical standpoints which is an important goal in this study. There is a need to learn more about special types of firms and not only to look for the average firm (Andriani and McKelvey, 2007). The close relationship already established with the firms will make it possible to receive information that is hard to get access to with other methods (Welch et al, 2002).

The cases will be built built on action research in co-operation with the partner firms, work-shops, personal interviews and observations but complemented with secondary data, such as, annual reports and internal documents. The individuals who have the greatest influence on the internationalization processes will be interviewed. Interviews and observations will lead to the identification of individuals/actors who are central in the international value creating processes. This includes actors outside the focal company, such as customers, suppliers, and co-operation partners. Our long co-operation with the companies has created trustful relationship between the researchers and the company representatives.

The analysis of the data will include several steps. The information from interviews and other sources will be written down in descriptive narratives. This process allows the researcher to become intimately familiar with each case and allows the unique patterns of each case to emerge before cross-case comparison (Eisenhardt, 1989). The analysis will be carried out together with companies and results will be a base for decisions in each companies as well as part in academic research.

Patterns will be identified among the cases (Yin, 1994). Earlier theoretical findings will be compared with the international development in the cases. Thereafter, the theory will be revised and the findings examined again. The reasoning is, in other words, not entirely inductive or deductive (Yin 1989). Following Eisenhardt’s (1989) recommendations, the analysis will include several iterations between theory and data.

Implications

The study will also give knowledge about pros and cons with different localisation alternatives on emerging markets. It is easy to just follow management trends (everyone should out-source production and buy supplies from China) and “go with the flock” instead of get knowledge of different alternatives. The comparison between the different firms will increase the knowledge about when different alternatives are suitable.

Place, publisher, year, edition, pages
2015.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hh:diva-29408OAI: oai:DiVA.org:hh-29408DiVA: diva2:852298
Conference
19th McGill International Entrepreneurship Conference at Department of Management, Birkbeck, University of London, London, United Kingdom, August 27-29, 2015
Funder
Knowledge Foundation
Available from: 2015-09-08 Created: 2015-09-08 Last updated: 2016-06-29Bibliographically approved

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