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

The synthesis of the case firms contained in Table 1 and the short case scenarios presented in the following section serve to highlight a number of themes and trends emerging from the firms under investigation. These are also, by and large, representative of the cases as a whole.

Pace of Internationalization

All of the case firms adopted a global focus from the outset, with each firm undergoing rapid and dedicated internationalization either from inception or within two years, supporting the born global literature (McKinsey & Co, 1993). In fact, five firms were international from inception (63%). Of these five, case D from Belgium actually went to an international market (Turkey) prior to commencing any business in the domestic market. Of the remainder, two were actively international after the oneyear milestone, and one firm was in international markets after two years. Indeed, all of the case firms derived significant competitive advantage from their international operations. A particularly interesting case is presented below.

CASE G: International from inception

This Canadian firm was established in 1996, and is headquartered in Edmonton, with offices in 11 other sites across Canada, and is a provider of long distance worldwide shipping, freight forwarding, and logistics services. It specializes in moving personal goods for individuals and for companies relocating personnel. Interestingly, it does not own the trucks, trailers, or plant, rather it puts the requests for shipping up for bid on a secure password-protected Web site. The freight forwarders and haulers post their bid, and the most attractive is passed on to the customer. The firm then organizes the trailer drop, collection, and delivery. Il will handle anything from one pallet to full containers. The suppliers of the service see firm G as a source of extra revenue and a convenient way to fill out trailers. It has served the U.S. and Mexican markets from inception in 1996, and now estimates that 20% of sales turnover comes from the U.S. and 10% from Mexico. Its CEO commented, since the Web site was redesigned last year, we have had substantial growth in American markets, particularly in U.S. interstate shipping .... 80% of the requests submitted on line arc now originating outside Canada. As a result we expect significant further growth in our export markets. (CEO, Firm G, Canada, 2002)

Case G above makes significant use of the Internet, in fact, it is an integral part of the business model; however, the original strategy, prior to actual formation, did not include e-commerce. The company ventured into e-commerce because of the encouragement of one of the three co-founders, who operated a digital imaging and Web development company. Through his outside business activities he saw opportunities in e-commerce for case G to expand markets and gain operational efficiencies.

The co-founder recognized that, using e-mail alone, the company could reduce communication costs and improve the distribution speed of policy and procedures guidelines from the head office to their regional representatives. In turn, this promoted consistency throughout the company for core business practices such as customer management, records management, and quotations processing. The company later created a Web site to expand on these operations and now views e-commerce as the main thrust of its business plan. To support this it uses a variety of software to develop the Web site, including Microsoft FrontPage(TM) and some specialized software for search engine submission. An Internet service provider (ISP) in the United States hosts the company's Web site. The site is growing and traffic is steadily increasing. case G cites the benefits of this ISP as timely technical support, fast connection to the Internet, 99% or greater server uptime, support for FrontPage(TM) server extensions, and the ISP's commitment to continually upgrade its service and add new technologies. The current Web site is designed primarily for their residential service markets, which typically have low screen resolutions and connect to the Internet through dial-up modems. It is designed for speed so it has minimal graphics and small page file sizes.