Intriguingly, most research on internationalization strategies focuses on large, multinational enterprises. This is unjustifiable given the economic importance of small and medium-sized enterprises (SMEs) or the emergence of small firm types such as “Born Globals”. The goal of this thesis is to undo the neglection of SMEs and provide fresh insights into the topic of SME internationalization from a strategic viewpoint. The thesis complements literature by thoroughly analyzing the relationships between the most important elements of small firm internationalization.
By summarizing the extant literature about internationalization drivers and barriers, entry modes and strategies of SMEs, the understanding and appreciation of prevalent concepts will be fostered. The result, a conceptual interplay framework, provides a sound base for managerial decision-making and effective governmental policies that seek to promote SME internationalization. Furthermore, scholars might find it useful as a fruitful starting point for further research in the respective field. It is derived from the most relevant internationalization models and focuses on the strong interaction between networks, knowledge and the entrepreneur.
Small in size and confronted with resource constraints, it is particularly difficult to cross national borders. This handicap is further fueled by the lack of academic literature which predominantly focuses on internationalization strategies of multinational enterprises (MNEs). It is widely known, however, that SMEs are not just smaller forms of MNEs. It follows that internationalization models for MNEs might not be suitable to describe small firm behavior. Olejnik thus argues that a distinction between process patterns of MNEs and SMEs has to be made. Differences between SMEs and MNEs exist, for example, in terms of resource endowment, knowledge levels or the importance of the owner/manager.
Given the challenges for SMEs it appears that there is no room for small firms in the international environment. And yet, new company breeds like the so called “Born Globals” seem to offset the liabilities of small businesses. At the same time, major changes in information systems, communication systems and transportation have enabled SMEs to pursue international endeavors.
Table of Contents
1. Introduction
2. Key Terms
2.1 Internationalization
2.2 Small and medium-sized enterprises (SMEs)
3. Drivers for Internationalization of SMEs – The Rationale for Going Global
3.1 Internal Drivers
3.2 External Drivers
4. Barriers to Internationalization of SMEs – Does Size Matter?
4.1 The Liability of Smallness, Newness and Foreignness
4.2 Internal Barriers
4.3 External Barriers
4.4 The Switch of Barrier Perception over Time
5. Market Entry Modes of SMEs – The Agony of Choice
5.1 General Overview
5.2 Import
5.3 Export
5.4 Strategic Alliances
5.5 Foreign Direct Investment
6. Internationalization Models of SMEs – A Theoretical Overview
6.1 The Internationalization Process Model or Uppsala Model
6.2 International New Ventures or The Born Global Firm
6.3 The Network Model of Internationalization
6.4 A Holistic Approach
7. Discussion
7.1 Theoretical Implications
7.2 Managerial Implications
7.3 Limitations and Suggestions for Further Research
8. Conclusion
Research Objectives & Key Topics
This thesis aims to address the research gap regarding the internationalization of small and medium-sized enterprises (SMEs) by synthesizing existing literature into a cohesive, conceptual framework. It investigates the primary drivers, barriers, and entry modes that influence small firms, seeking to provide a basis for improved managerial decision-making and more effective policy support.
- Theoretical analysis of SME internationalization drivers and barriers.
- Evaluation of traditional and modern market entry modes for small firms.
- Comprehensive review of prominent internationalization models (Uppsala, Born Global, Network).
- Development of an "interplay framework" focusing on networks, knowledge, and the entrepreneur.
Excerpt from the Book
6.4 A Holistic Approach
When deciding which model or theory best describes the essence of SME internationalization, consensus remains elusive. The upshot is that there seems to be no sole model that truly captures the internationalization process. Rather, researchers should take a closer look at the complementarities of the different schools of thought (Coviello & McAuley, 1999; Onkelinx & Sleuwaegen, 2008), integrating or combining existing models. As Hynes (2010, p.91) observes “[t]he approaches are not mutually exclusive and can occur simultaneously in the SME”. The following discussion part seeks to add clarity to the internationalization debate of SMEs by reducing internationalization patterns to their purest core focusing on the main elements (1) networks, (2) knowledge and (3) the entrepreneur.
Summary of Chapters
1. Introduction: Highlights the economic relevance of SMEs and identifies the research gap concerning their unique internationalization processes compared to large multinational enterprises.
2. Key Terms: Provides foundational definitions for internationalization and the classification of small and medium-sized enterprises (SMEs).
3. Drivers for Internationalization of SMEs – The Rationale for Going Global: Examines internal and external motivations, such as growth opportunities and technological advancements, that push SMEs to expand internationally.
4. Barriers to Internationalization of SMEs – Does Size Matter?: Analyzes specific obstacles like the "triple threat" of smallness, newness, and foreignness, and how these barriers are perceived over time.
5. Market Entry Modes of SMEs – The Agony of Choice: Discusses feasible entry strategies for resource-constrained firms, specifically focusing on importing, exporting, and strategic alliances.
6. Internationalization Models of SMEs – A Theoretical Overview: Reviews major academic models, including the Uppsala process, Born Global theory, and the Network model, noting their respective strengths and flaws.
7. Discussion: Introduces a new conceptual interplay framework that synthesizes knowledge, networks, and the entrepreneur to offer practical and theoretical implications.
8. Conclusion: Summarizes findings, reaffirms the distinction of SMEs from large firms, and emphasizes the future growth potential of small businesses in global markets.
Keywords
SME, Internationalization, Born Global, Uppsala Model, Network Theory, Entrepreneurship, Market Entry, Export, Liability of Smallness, Knowledge Accumulation, Strategic Alliances, Interplay Framework, Small and Medium-sized Enterprises, Foreign Direct Investment, Managerial Implications
Frequently Asked Questions
What is the core focus of this thesis?
This work examines the specific internationalization strategies of small and medium-sized enterprises (SMEs), distinguishing their unique behavior from that of larger multinational corporations.
What are the primary thematic fields covered?
The study covers drivers and barriers to internationalization, common market entry modes, and an evaluation of existing theoretical models concerning how small firms go global.
What is the ultimate research objective?
The goal is to develop a conceptual "interplay framework" that helps scholars and managers better understand how networks, knowledge, and the entrepreneur interact to influence success.
Which scientific methodology is employed?
The research utilizes a comprehensive literature review to synthesize existing models and derive a new holistic framework for SME internationalization.
What topics are discussed in the main body?
The main body treats the categorization of SMEs, the motivations for international expansion, the specific hurdles SMEs face, various entry strategies, and an in-depth theoretical critique of established models.
Which keywords best describe this study?
Key terms include SME, Internationalization, Born Global, Network Theory, and Entrepreneurship.
How does the "Uppsala model" apply to SMEs?
The Uppsala model describes internationalization as a gradual, step-by-step process of increasing market commitment, though the thesis notes it does not explain the behavior of "Born Global" firms as well.
What role does the entrepreneur play in this framework?
The entrepreneur is identified as a critical driver of the internationalization process, responsible for navigating networks and utilizing knowledge to overcome resource constraints.
- Arbeit zitieren
- Yannik Schmalstieg (Autor:in), 2017, Small and Medium Sized Enterprises. Which Internationalization Strategies Do They Have?, München, GRIN Verlag, https://www.grin.com/document/477602
