Arto Ojala

Market Entry and Priority of Small and Medium-Sized Enterprises in the Software Industry: An Empirical Analysis of Cultural Distance, Geographic Distance, and Market Size

This article investigates the influence of cultural distance, geographic distance, and three market size variables in the target country preference of small and medium-sized enterprises (SMEs) in the software industry. In addition, the authors examine the shift of SMEs’ priorities in country selection by analyzing how these factors affect the selection of the first, second, and third target countries. The empirical findings suggest that approximately 70% of country choices can be explained by software market size and geographic distance alone. The findings also show that SMEs’ entry priorities shift quickly from countries within a short geographic distance to countries with high purchasing power and at a greater geographic distance. The authors discuss relationships of these macrolevel factors and compare them with prior qualitative and conceptual studies in this field. They also note implications for managers.

International Opportunity Recognition Among Small and Medium‐Sized Family Firms

Current research in the field of entrepreneurship emphasizes the importance of opportunity recognition as a key element in the entrepreneurial process. It has been recognized that network ties, activeness and alertness, and prior knowledge are related to how entrepreneurs recognize new opportunities. However, it is unclear how important these factors are when a firm explores opportunities for entry into a foreign market. In this exploratory case study, covering the international opportunity recognition of eight family‐owned small and medium‐sized enterprises (SMEs), we found that the firms in question mainly recognized international opportunities by establishing new formal ties rather than using existing informal or family ties. The findings also indicated that due to the small size and the flexibility of the management team in family SMEs, these firms were able to react quickly to new international opportunities. However, there was no direct relationship between the prior knowledge of the firms and their international opportunity recognition. In addition, we found that trade exhibitions formed the primary context for the international opportunity recognition of the SMEs in this study. These findings motivate a set of five propositions that may lead to further studies on this topic.

Developing Cloud Business Models: A Case Study on Cloud Gaming

Cloud computing offers new ways for firms to operate in the global market so that even small firms can compete in markets traditionally dominated by multinational corporations. A case study considers how, over ten years, a small firm developed a successful business model to compete in computer gaming.

Internationalization pathways of family SMEs: Psychic distance as a focal point

Purpose – The purpose of this paper is to investigate how psychic distance affects the internationalization process, foreign market entry (FME), and entry mode choice of Finnish small and medium‐sized family enterprises (family SMEs) operating in France.Design/methodology/approach – The paper reports findings from an in‐depth case study covering four Finnish manufacturing family SMEs operating in the French market. The data were analyzed using the Uppsala model and distance creating and distance‐bridging factors encountered in the FME to France.Findings – The findings reveal that the family SMEs mainly followed a sequential process and favored indirect entry modes before entering the French market. The French market was psychically distant, but the case firms were able to overcome the distance by using different distance‐bridging factors. Based on the findings, it can be argued that psychic distance has an especially important role in the internationalization and the FME of family SMEs, mainly because of ...

Internationalization pathways among family-owned SMEs

Purpose – The purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family‐owned small to medium‐sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family‐owned SMEs.Design/methodology/approach – This paper reports findings from an in‐depth multiple case study with eight Finnish family‐owned SMEs.Findings – The ownership structure had the most important role in defining the internationalization pathways followed by the family‐owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born‐again global pathways.Practical implications – Family entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in additi...

Value networks in cloud computing

Purpose – The purpose of this paper is to examine value networks in cloud computing. It demonstrates the kinds of value offered by such networks to firms within a given network, and considers how and why the network may change over time.Design/methodology/approach – The paper reports on a longitudinal case study, including a total of seven semi‐structured open‐ended interviews, conducted with five informants from the case firm.Findings – It was found that cooperation in value networks provides not merely financial benefits, but also knowledge, among other intangible benefits. Value networks should be evaluated as a whole, since there may be indirect connections – i.e. the value comes not directly from customers, but through the partners in the network. The study also shows the dynamic nature of value networks, as illustrated by changes in a network that were based on transformations in the market environment, and on product development.Originality/value – This paper contributes to an understanding of valu...

Social capital in the international operations of family SMEs

Purpose – The aim of this study is to discuss how social capital is developed in the internationalization process of small and medium‐sized family enterprises (family SMEs).Design/methodology/approach – This paper reports findings from an in‐depth multiple case study with four Finnish manufacturing family SMEs. The data were analyzed through the perspectives of structural holes, network closure, and the interplay between these two mechanisms.Findings – The material in the paper demonstrated that family entrepreneurs had a large number of structural holes when launching international operations, but also after several years of running international operations. Instead of trying to span structural holes, they concentrated merely on developing the network closure with agents and subsidiary staff. The case firms spent a lot of resources on finding suitable network ties and on developing good network closure with the selected social capital ties.Research limitations/implications – There are some aspects that m...

Market entry decisions of US small and medium‐sized software firms

Purpose – The purpose of this paper is to investigate market entry decisions of the US software SMEs by analyzing the impact of the most obvious factors (cultural distance, geographical distance, country risk, and three market size variables) in traditional internationalization theories to target country selection. By investigating the influence of these commonly cited macro‐level factors, this study proposes the best indicator for market entry decisions of the US small and medium‐sized software firms.Design/methodology/approach – This study uses a quantitative research approach applied to a sample of 100 US small and medium‐sized software firms.Findings – Empirical findings in this study indicate that vertical (software) market size in a target country is the best single indicator for market entry decision and in themselves explain 63 percent of market entries. Thus, the findings in this study suggest that the vertical market size gives a better explanation for market entry decisions of software SMEs tha...

Software-as-a-Service Revenue Models

This paper give an overview of the three main revenue models, focusing on the advantages and disadvantages for SaaS providers and their customers. Also identify the most effective revenue model for particular situations.

Business models and opportunity creation: How IT entrepreneurs create and develop business models under uncertainty

How can entrepreneurs develop business models for markets in which the technology is constantly changing—or create business models for markets that do not exist? These are fundamental questions for information technology (IT) entrepreneurs, and for information systems (IS) scholars who seek to develop a theoretical understanding of business models. The case study presented in this paper addressed these questions, demonstrating how a small software firm developed its business model over a 15‐year period in cloud gaming markets. Based on the empirical findings, a preliminary theoretical model is presented. The aim of the model is to increase scholarly understanding of how business models are created and developed in markets in which the future directions of a technology are uncertain. It demonstrates the ways in which a business model may evolve through reassessment and development phases, which can be seen as transition elements linking old and new business models.