Øystein Moen

The Born Globals: A new generation of small European exporters

Over the last decade several studies have focused on what have been called International New Ventures or Born Globals – firms that engage in significant international activity a short time after being established. Building on an empirical study of small firms in Norway and France, it was found that more than half of the exporting firms established since 1990 could be classified as Born Globals. This implies that the Born Global issue is not limited to just a few firms, it includes the majority of newly established exporting firms. Furthermore, in terms of global orientation, export strategy, competitive advantages and market situation – the newly established, highly‐involved exporters possess similar characteristics to the old global firms. Also, newly established low level involvement exporters resemble old low level involvement exporters. Examining the differences between newly established firms with high or low export involvement levels revealed that a decision maker’s global orientation and market conditions (home and export markets) are important factors. Because this study found that a firm is either Born Global or “born as local”, the relevance of internationalization process stage models, as described in previous research, came into question. A key implication is that the decisions made during the establishment process of the firm may be more important to future export development than expected, according to the internationalization process models. In many countries export development programs target the established firms in order to help them succeed in export markets. Alternatively, our findings recommend that export assistance programs place their focus on newly established highly‐involved exporters.

Internationalization of small, computer software firms: Entry forms and market selection

Internationalization has often been described as a gradual development, in terms of involvement and entry forms, in which firms are expected to target gradually more distant markets. This study focuses on the entry forms and market selection of five small Norwegian computer software firms. The findings suggest that the firms network relationships are determinant with regard to which foreign entry forms they choose and to some extent, which markets they decide to enter. Whereas terms such as agent, distributor, licensee, and foreign subsidiary might have clear distinguishing power when physical products are concerned, the picture is far more complex when it comes to software. The firms in the study generally refer to their international partners as agents or distributors or both. When examined more closely a complex pattern of business solutions are encompassed by these terms. It seems also evident that the firms in the study are not concerned with such a distinction but look for competency, solidity and the ability to generate sales when searching for international partners. There seems to be a limited correlation between the firms’ international experience and their foreign entry form and market selection. The firm may choose one entry form in one market and a different one in another similar market, depending very much upon the options available in terms of their network relationships. Some key challenges for the managers of a software company will be to balance the allocation of resources between expanding the network through the current relationships and to focus on establishing new relationships and customers. This studys results illustrate the increasingly complex relationship between firms across national borders.

A review of the foundation, international marketing strategies, and performance of international new ventures

Purpose – This review aims to focus on the phenomenon of infant firms that operate internationally right from or close to inception, so‐called international new ventures (INVs) or born global firms. It also aims to provide a comprehensive review of the literature on INVs from the time when such firms emerged in the literature in the early 1990s up until today.Design/methodology/approach – The study is a systematic review of top journals within entrepreneurship, marketing and management over the years 1992‐2004. The focus is primarily on studies with empirical evidence and the review is narrative in nature. The study presents and discusses findings related to the founding of the firm, organizational features, environmental factors, and their influence on market strategy and firm performance.Findings – The study finds great heterogeneity on the factors examined within this relatively narrow defined group of firms. This leads the study to conclude that normative linear models of international expansion rende...

A generation perspective on small firm internationalization: From traditional exporters and flexible specialists to born globals

This paper deals with the effects of firm age on export behavior and performance for small exporters. Using market and technology trends from the last decades, we have classified three generations of small exporters: the traditional, the flexible specialists, and the Born Globals. Building upon a sample of Norwegian exporters these three generations of exporting firms are compared using competitive advantage, manager orientation, export motives, and export strategy. The results revealed several significant distinguishing features between the generations. Important differences were the strong technological competitiveness, niche focus and widespread use of advanced communication technology in the two groups of recently established exporters compared to the older, traditional exporters. The study also showed that the various generations of firms had different export performance antecedents. Key factors for the Born Globals were found to be technological advantage and niche focus combined with strong customer orientation. Among both the other groups — traditional exporters and flexible specialists — marketing advantage, product quality, and various manager orientation factors were important performance determinants. It seems that firm behavior and performance are partly contingent upon the environmental context in existence during the firms year of establishment, which results in systematic differences between the generations of exporting firms. As the firms year of establishment has often been a neglected variable in international marketing research, these results suggest we should pay more attention to firm age in future studies, as both export behavior and performance determinants vary between different generations of exporting firms. This study further concludes that we can now distinguish a new generation of exporters; the Born Global firms. One of the most important characteristics of these firms is their speed of internationalization; just a few years after establishment the Born Global firms achieve considerable sales in a number of export markets.

The importance of the internet in international business‐to‐business markets

Purpose – The purpose of this paper is to provide empirical evidence on the actual use and market performance effects of information and communication technologies (ICT) with regard to international business‐to‐business marketing activities of small and medium‐sized enterprises (SMEs).Design/methodology/approach – The analysis is based on survey data from 635 Danish and Norwegian SMEs with international marketing activities. The two primary research questions regarding actual use and performance effects are addressed by descriptive statistics and structural equation modelling, respectively.Findings – Findings suggest that, contrary to expectation, Norwegian and Danish international SMEs are not heavy users of ICT. Rather, ICT is predominantly used for market information search and to develop long‐term customer relationships. In both those areas the use of ICT is positively associated with the firms satisfaction with its development of new market knowledge. The use of ICT for sales purposes is limited and...

Use of the Internet in International Marketing: A Case Study of Small Computer Software Firms

This study focuses on how small exporting firms use the Internet in their international marketing activities. The authors conducted six case studies of software firms. The software sector has several notable features: It is one of the worlds fastest-growing industries, its products can be distributed electronically, and software companies are “Internet literate.” This studys findings suggest that most firms use the Internet to search for information about customers, distributors, and partners. The Internet does not replace personal sales; most firms reported a rather complex purchasing process and an extensive need for communication with customers before the purchase decision. The authors found standardized products to be most suited for Internet-based sales; however, standardization reduced firms’ competitive advantage and profit margins. Software firms’ most significant use of the Internet was for postsales service and support activities; these activities both generated revenue and improved customer relations. Partnership agreements with well-known firms, positive product reviews, and image building through the Internet were important to most firms in order to reduce the uncertainty that potential customers often experience when unknown suppliers offer unfamiliar products. The authors also discuss implications for managers in industrial sectors other than software.

Born Global Firms and Informal Investors: Examining Investor Characteristics

A “Born Global” is a new venture with a global niche market focus from day one. Many of these firms experience high growth rates, but also, a considerable need for funding. This study contrasts informal investors involved in born global firms (“Born Global Investors”) with other informal investors. The underlying thesis is that the behavior of these investors reflects their investment philosophy, at least on a differential basis. The results suggest that born global investors differ from other informal investors in terms of deal origin, investment size, and exit preferences. Their experience as managers of large firms seems to be a particularly important factor, increasing investment capacity (income and fortune), while personal and professional networks influence the access to information about investment opportunities. The importance of these results for the development of born global firms is discussed.

SMEs and International Marketing

Abstract International marketing research has usually built upon the supposition that small firms are less competitive than larger firms, primarily due to scarce resources. However, empirical investigations of the direct relation between firm size and export performance have yielded conflicting results. This paper presents the hypothesis that small firms develop an export strategy aimed at reducing their size disadvantages. Using a sample of 335 Norwegian industrial firms together with structural equations modeling, we identified a direct linkage between firm size and export performance, in which small firms are less successful than larger firms. We found that these small firms tend to follow a niche focus strategy and that this strategy is further linked to product quality and high attention to personal selling. Both product quality and personal selling as well as distribution efficiency render a positive impact on export performance. Accordingly, these small firms seem to have developed an export strategy that reduces their size disadvantages. This study demonstrates that an export strategy measurement instrument developed in the United States can be translated and used in another country with a dissimilar language and culture. Second, the study uses an analytic approach that makes it possible to examine both direct and indirect effects. Third, the investigation contributes new insight regarding how small firms develop export strategies aimed at reducing their size disadvantages.

The Positive Effect of Motivation and International Orientation on SME Growth

This empirical study on small and medium‐sized enterprise growth investigates the relationship between motivation for growth, international orientation, and subsequent performance by following 247 firms over 11 years. Using a combination of regression analysis and structural equation modeling, the authors find the international orientation of the firm to be a consistent predictor of growth in revenue and exports. The authors also find the international orientation of the firm to be closely interrelated with motivation for growth: Firms with managers and owners having a strong motivation for growth tend also to have managers with high international orientation and display superior growth both domestically and abroad. Whereas motivation seems independent of past performance, it has a profound positive influence on the growth in revenue. Moreover, the findings reveal that some firms are able to sustain high growth rates over an extended period of time. The study supports the contention that some firms are able to systematically outperform the rest.

New ventures in an emerging industry: access to and use of international resources

This paper addresses the international activities of young companies in the emerging marine energy industry. Our study is constructed based on interviews with eight companies combined with scientific reports and publications. The primary challenges faced by the companies are related to financing and technology development. Our findings indicate that the companies may be divided into three groups: a) three technology- and funding-driven international ventures; b) one market-driven international venture; c) four companies with limited international involvement. The short time span between establishment and the first major international activity initiated to acquire funding or technology competence is a distinct characteristic of the firms in the first two groups. The last group with no or limited international activity reveals an alternative path. Our study provides insights on significant firm-level differences with respect to international involvement in the pre-commercial phases of development and discusses the implications for researchers, managers and public policy.