smallness’) and aquire/attract resources (‘liability of newness’). Appendix 3 shows the different relationships to large enterprises, which are important for the start-up setting. Since the late 1980s, the business press has been reporting the emergence of new SMEs that are international from start-up as a “new and growing phenomenon” (Oviatt and McDougall, 2005, p. 1). The term used is still varying (Thai and Chong, 2008, p. 73), most common is Rennie’s (1993, p. 1) term “Born global” (BG).

Appendix 4 illustrates the definitions of BGs in the field of research. The varying criteria are age, minimum number of entered foreign markets and share of exports on the total turnover (Lehmann and Schlange, 2004). However, as Appendix 5 shows, recent research is in relative agreement about the basic characteristics of BGs. Traditional internationalizing enterprises share the characteristics of targeting international markets and attending in value creating international activities (Oviatt and McDougall, 1994; cited in Lehmann and Schlange, 2004) As a result of the varying defining criteria and definitions, the recent definition of Servais et al. (2007) will be used to refer to a BG.

In order to explain the emergence of the phenomenon several approaches focusing on macroeconomic and microeconomic factors and trends were developed: Globalization, as a macroeconomic trend, has three driving forces (Gjellerup, 2000; Acs et. al., 2001; cited in Ruzzier et. al., 2006), lowering the entry limits of internationalization: Firstly, the rapid spread of low-cost technology connects people and locations, whose severity of impact on the emergence of BGs is disproved by Thai and Chong (2008). Secondly, ongoing reductions of trade barriers and financial deregulation occur. Finally, the worldwide economy’s restructuring and liberalization after the fall of socialism, as well as the geographical expansion of Asian markets impact here. By offering plenty opportunities abroad the globalization of markets encourages the widespread emergence of BGs. (OECD, 1997; Zahra et al., 2000; Moen and Servais, 2002; cited in Knight et. al., 2004). Microeconomic factors are the existence of a vision of an international enterprise and the availability of resources. (McDougall et. al., 1994; cited in Lehmann and Schlange, 2004). Evidence suggests that developments of the 1990’s strengthened the incentives for internationalization and entrepreneurs got more susceptible for the BG way of going international. This shortened the process of internationalization. Subsequently the entrepreneur is influenced by internal and external incentives to go international but the speed of internationalization depends on the foreign-orientation of the entrepreneur (McDougall et al., 1994; Harveston et al., 2000; cited in Lehmann and Schlange, 2004).

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These approaches explain why the BGs emerged and the subsequent competitive disadvantage for national-focused SMEs, they however do not explain the contradiction of most SMEs “stay[ing] at home” (Acs et. al., 1997; Knight and Cavusgil, 2004; cited in Gassmann and Keupp, 2007, p. 352).

The evidence is that common theories of internationalization are hardly adaptable on BGs (Schmidt-Bucholz, 2001, p. 13; cited in Lehmann and Schlange, 2004; Chetty and Campbell-Hunt, 2004; cited in Gassmann and Keupp, 2007): They assume an established domestic base of operations, which is not given by BGs. Furthermore the theories focus on large multinational enterprises (MNE) and cannot always be applied to SMEs (Ahokangas, 1998; cited in Ruzzier et. al., 2006), because SMEs have different settings to build up on. Moreover they only describe the incremental process of change but not the different approaches used by enterprises in order to develop activities (Ahokangas, 1998; cited in Ruzzier et. al., 2006). Additional critic is supported by Andersen (1993, p.221; cited in Fillis, 2001) and Gassmann and Keupp (2007), especially on their export-orientated view, as it excludes internationalization without export.

New frameworks, which prove to be useful for the analysis of the patterns and processes of internationalization of SMEs (Gassmann and Keupp, 2007), for example the profile models by Rennie (1993) (Appendix 6), are not suited to illustrate opportunities and threats of the process: After a review of research literature, including frameworks of Thai and Chong (2008), Gassmann and Keupp (2004), Knight et al. (2004), it can be concluded that no apparent framework suits the requirements of this paper in the preferred complexity and focus.

As a consequence this paper uses its own conceptual model (Appendix 7) with the four basic steps in launching a BG. On the basis of Lehmann and Schlange (2004) we will use it to further illustrate the challenging aspects, from a ‘network’ and ‘resource’ point of view (Review of conceptual approaches in Appendix 8), during the process of starting a sustainable business the BG way.

The first important requirement is the entrepreneur himself. The persona and characteristics of the entrepreneur are a determinant for sustainable success according to Thai and Wong (2008). The ideal entrepreneur is characterized as an international and industry experienced, global-orientated, multiple language speaking, part of an established international network,

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person, with high global visions (Thai and Chong, 2008; Karlsen, 2007). Regarding the network and knowledge approach flaws in this attributes impact success negatively. The network of the entrepreneur consists of ‘weak’ and ‘strong’ (family and close friends) ties (Blomstermo et. al., 2004a, b; cited in Loane and Bell, 2006). The ‘weak’ networks need to be distinguished between expert (research and educational institutions) and business networks. As the case study by Loane and Bell (2006) indicates, only 25% of 137 international BGs relied on existing business contacts upon entering a new market, but 43% built new business networks. Hence both networks are an opportunity rather than a requirement, with an offer to finance and support the start-up. In contrast expert networks need to be “nurtured” and are most prevalent in BGs (Karlsen, 2007, p.126). From a knowledge-based view this is an important advantage, because of the costless obtained information by solidarity (Gassmann and Keupp, 2004). Case studies show that this way resource- and knowledge-deficits (Young et. al., 1999; cited in Loane and Bell, 2006) and ‘liabilities of newness and foreignness’ can be overcome (Loane and Bell, 2006). Benefiting from existing value chain activities the faster internationalization of subcontracting (dependent) BGs is considerable (Gassmann and Keupp, 2004; Karlsen, 2007).

Another challenge is the finance aspect. SMEs in general have the disadvantage of ‘liabilities of smallness’, whose impact is even increased due to the higher market (entry) risk of BGs. The simultaneous entry in multiple markets gives on one side the opportunity to gain share of the huge sales potential, but on the other side the threat of lacking market analysis. If the entry is a success large turnovers can be generated, otherwise the reputation of the enterprise and the entrepreneur gets heavily damaged (Lehmann and Schlange, 2004). The investment into a BG carries a higher risk for investors than investing in traditional MNEs and is a threat for BGs, but this threat can be overcome by networks.

The product and process aspect holds a major opportunity for BGs from a resource point of view, distinguishing intangible and tangible resources. The adjustment of products and processes to the various demands of foreign markets gives two different challenges: traditional MNEs need to modify running processes and existing products constantly for new demands, BGs start facing this problem from the beginning and can implement a high homogeneity on processes and products. Hence making processes and products unique creates competitive advantage (Knight et. al., 2004; Gassmann and Keupp, 2007). The development time and costs are enhanced by adjustment to foreign regulations and laws, which is therefore a threat towards the sustainable success of BGs (Lehmann and Schlange, 2004).

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Secondly, the market choice marks one of the major differences between the BG and the international way to internationalize. Traditional SMEs enter foreign markets one by one, beginning with nearby located, similar ones to the domestic market. (Ruzzier et. al., 2006). BGs choice is based on market potentials. Their entry to multiple markets independent from their location or experience (Lehmann and Schlange, 2004), is a threat which is influenced by networks (Loane and Bell, 2006) and weakened by first mover advantages. The location aspect relates to the ‘flexibility’ advantage. If the importance of presence at a certain location is high, like in the case of traditional MNEs, investments and sunk costs are high (Gassmann and Keupp, 2007). Global spatial flexibility is a major opportunity for BGs. Thirdly, the first mover advantage as market entry mode is an opportunity for BGs. The case study by Knight et. al. (2004) indicates the gain of superior market shares and advantages over following competitors. Related to this is the entry strategy, as widespread diversity by multiple market entries decreases commitment to markets and threatens revenues. To utilise the first mover advantage, a combination of market diversity and specialisation offers the best opportunity (Aspelund et. al., 2006). This is backed up by Loane and Bell (2003) who show that 61,5% of BGs export to less than five markets.

However the entry mode for each entered market can be of several types, like exporting, licensing, joint ventures and foreign direct investments (McDougall and Oviatt, 2000; Nordstrom, 1991; cited in Knight et. al., 2004). It must be mentioned that due to missing economies of scale traditional price competition is not feasible (Gassmann and Keupp, 2007). Traditional MNEs utilise sales by own and foreign sales representatives, which is owing to financial aspects not possible for BGs.

In marketing terms it is risky for BGs to enter markets without a fully tested product or reputation (Lehmann and Schlange, 2004). This relates to the establishment of ‘weak’ networks to overcome ‘liabilities of foreignness’ and the adjustment towards foreign demands and laws. Accordingly, the process of market entry can become very time intensive because of missing financial backups.

The final step includes aspects for a sustainable daily business. Lehmann and Schlange (2004) show that logistics are an opportunity for BGs as they usually sell easy transportable products of intangible nature. Furthermore ‘resources on demand’ are a possibility to overcome the ‘liabilities of smallness’, reducing transport and sunk costs, marketing or market entry costs which cannot be recovered, by concentrating limited resources (Gassmann and Keupp, 2007; Knight et. al., 2004).

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