Internationalization of Internet-Enabled Entrepreneurial Firms: Evidence from Europe and North America, The

Canadian Journal of Administrative Sciences, Mar 2004 by Loane, Sharon, McNaughton, Rod B, Bell, Jim

Abstract

The main focus of this paper is the internationalization strategies of Internet start-ups. Much of the extant literature focuses on the Internet's potential to enable smaller firms to improve their international activities and performance by reducing problems associated with distance, size, and scale. However, there is also growing evidence that many new firms are embracing Internet technologies from the outset and adopting an e-business format to be global from inception. This suggests that the Internet can be employed not simply as a tool to improve international performance, but, in many cases, as a core capability that underpins the firms' overall international strategy. Empirical research, involving a case study methodology and thematic analyses, investigates a cross-national sample of Internet start-ups, and identifies their chosen internationalization pathways firms. We explore the patterns, pace, and drivers of internationalization and the processes involved in order to determine the extent to which the Internet has influenced the firms' international activities, behaviour, and overall strategy.

Resume La presente etude se donne comme objectif majeur d'analyser les strategies d'internationalisation de mises en route de l'Internet. En effet, une partie non negligeable de la litterature existante s'appesantit sur la capacite de l'Internet a promouvoir et a ameliorer les activites internationales et la performance des plus petites entreprises, par la reduction des problemes lies a la distance, a la taille et a l'echelle. Pourtant, on constate de plus en plus que plusieurs nouvelles entreprises, dans le but de se mondialiser, embrassent les technologies de l'Internet et adoptent le modele du commerce electronique des leur gestation. Cette situation prouve que l'Internet peut etre utilisee non seulement comme un outil d'amelioration de la performance internationale, mais aussi et dans beaucoup de cas, comme une capacite fondamentale qui soustend l'ensemble de la strategie internationale des entreprises. La recherche empirique, qui comporte une methodologie d'etude de cas et des analyses thematiques, se penche sur un echantillon transnational de mises en route de l'Internet et identifie les voies choisies pour l'internationalisation. Nous explorons les modeles, le rythme et les facteurs motivants de l'internationalisation ainsi que les processus impliquees, ce qui nous permet de determiner dans quelle mesure l'Internet influence les activites internationales des entreprises, leur comportement et leur strategie globale.

There is considerable current research interest focused on how the Internet and related technologies can enable smaller firms to internationalize. Many researchers posit that such technologies offer unprecedented opportunities for such firms to overcome geographic barriers to expansion into foreign markets (Hamill, 1999; Poon & levons, 1997; Samiee, 1998). Indeed, the argument that smaller firms can particularly benefit from the ability to gather information, promote themselves, and service customers in new markets for relatively little expense is very persuasive (Chattel!, 1998; Franson, 1998; Quelch & Klein, 1996). Many authors also contend that due to the impact of the Internet, and the World Wide Web in particular, firms will experience fewer barriers to internationalization. Thus, they will be able to market globally at an early stage of development (Bennett, 1997, 1998; Berry & Prashantham, 2001; Brock & Berry, 2001; Kuemmerle, 2002; Mostafa & Wheeler, 2001).

It might be postulated, therefore, that due to their high skill level, Internet-enabled start-ups are in a superior position to capitalize on new marketing conditions brought about by the Web, and that the preponderance of such firms are therefore "global from inception." However, the internationalization of Internet-enabled companies is by no means a deterministic, or even a homogeneous process. Internationalization pathways reflect different strategies that relate market scope to timing advantages in an attempt to lever value from the business model. Moreover, any decision to pursue an international strategy is not solely dependent on the availability and adoption of such technologies. Rather, it is also influenced by many other factors, such as the international orientation of management, product/service characteristics, the availability of human and financial resources, the existence of networks, and the ability of the firm to leverage external resources.

The main focus of this contribution is to investigate the internationalization strategies of a cross-national sample of Internet-enabled firms in Europe and North America. Wc use a case study methodology, involving thematic analysis, to explore the patterns, pace, and drivers of internationalization, the processes involved, the impact of the Internet in enabling internationalization, and the extent to which other factors influence the firms' activities and behaviour. In undertaking this research, our overall objective is to gain deeper insights into the impact of Internet adoption on the strategies of the case firms and the particular internationalization pathways they have chosen to pursue. The presentation of the cases and discussion of the findings focuses on the theoretical, managerial, and public policy implications of the results and offers directions for future research n terms of new themes emerging from the study.