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

In order to extend the geographic scope of the original research, similar procedures were established to identify Internet start-ups and Internet-enabled firms in other European Union countries (Belgium and Sweden), Canada, and the United States. A similar number of "shallow cases" were developed in each location, gathering secondary information from the sources detailed above. Missing information, particularly in respect to firm demographics and business performance, was requested via e-mail and/or telephone calls.

A total of almost 40 shallow cases were developed using these procedures. The data obtained were analyzed thematically in terms of (a) the pace and patterns of internationalization of Internet start-ups; (b) the choice of international market entry modes; (c) characteristics and capabilities of the founder/s or management team; (d) the use of international networks; and (e) how firms had financed internationalization.

Eight of these cases are selected for presentation on the basis that they best illustrate some of the key emerging themes from the overall sample.1

Findings

Prior to presenting the finding of the thematic analysis, we present a demographic profile of the case firms in Table 1. As anticipated, due to the relatively recent emergence of Internet technologies, the majority of the case firms were young (63% were aged 5 years old or less at the time of investigation) and had less than 5 years experience of international markets (50%); only one case firm had more than 10 years of international experience. Typically they employed 50 or fewer employees (88%), with an average of 36 employees.

Case firms also fell into various broad categories in terms of product or service offered. Three of the eight firms provide some form of Internet infrastructure, ranging from software permitting the aviation industry to track operations via the Web (Case A), to Web development services and encrypted file deliveries. Two others provided a service online (Cases E & F); for example, the Canadian firm provides a Web site to facilitate crossborder shopping with the United States. Yet another provides digital cellular (GSM) technologies for the mobile phone industry. None of these particular firms need any great degree of face-to face interaction, and the use of the Internet and related technologies admirably suits their business models. The two remaining firms produce an actual physical product, which has to be distributed to the B2B customers, and also use Internet technologies to their advantage. Take, for example, case B, the manufacturer of diagnostic test kits and reagents for the food industry. The Internet enabled this firm to achieve global reach easily, regardless of its physical location. all of the case firms were targeting the B2B market, with only one firm, case G from Canada, also targeting the business to consumer (B2C) market.

Further details on each of the case firms in terms of the extent, location, and pace of internationalization are presented in Table 1. Impressively, half of the firms had export ratios of 50% or greater, with three of the firms achieving export ratios of 97%, 98%, and 100%.