Developing International Marketing through Stakeholder Collaboration

International start-ups rely on more than rudimentary resource allocation as they inherently require collaborative efforts for effective monetization. Entrepreneurial use of social and business networks to improve the chances of success is not something new and is part of the process of pushing innovation. Research by Evers, et. al (2012) brings forward a model of how stakeholders interact in international marketing development. 

The model requires the shifting from market oriented to stakeholder oriented developmental trajectories. By using the power of stakeholders it is possible to better understand the market, business performance, and overall effectiveness through enhanced knowledge management and innovative solutions. Working in collaboration with key market stakeholders can raise the possibilities of developing stronger market penetration. 

The type of stakeholder groups are as follows: 

Neutral Stakeholders: Companies and industry experts that have their own goals but often share knowledge with each other for individual development. General knowledge is converted to specific firm use. It is considered single loop learning. 

Cooperative Stakeholders: Cooperative stakeholders that work together for general improvement and know enough of each other to be effective. They are separate entities that have their own goals but will collaborate when it is beneficial. It is considered secondary loop learning. 

Allied Stakeholders: Allied stakeholders are highly motivated businesses and industry stakeholders that work together to create new products, services and opportunities. They are engage in triple-loop learning that leads to regenerative possibilities. 

Each stakeholder group has different information to offer that contributes to the developmental process. Many markets are made of neutral stakeholders that try and understand their market from various non-aligned parties that provide relevant information. When companies begin to collaborate around market problems they are able to focus the genre more closely on business needs. 

As companies make a significant commitment with each other and share tight resources that deliver products/services they are engaged in allied activities that raise innovative knowledge. We can see this exist when companies team with suppliers to develop better supply chain platforms for international delivery or Internet entities that work tightly with other virtual suppliers to create more effective campaigns. 

International marketing development doesn’t work in a vacuum and requires interested stakeholders to work together to create something new. Knowledge diffusion and innovation occurs when companies bring their current capabilities to collaborate with other companies to develop higher level outputs. The more focused companies are on defined outcomes the more likely they are able to orientate their efforts.

Evers, N. et. al. (2012). Stakeholders and marketing capabilities in international new ventures: evidence from Ireland, Sweden, and Denmark. Journal of International Marketing, 20 (4).

 

Will Technology and the Sharing Economy Adjust the Market?

The sharing economy is upon us as a direct result of the Internet and its ability to move information around the globe quickly. The lean years since the Great Recession has further fueled an entrepreneurial spirit that tries to hedge income and opportunities through micro-businesses. Large companies are adjusting their structures to reduce costs and improve upon operational functioning. Will the sharing economic and Information Age adjust the way we think, interact, and conduct business?

Things don’t often change quickly and it takes time for people to understand and develop methods of realizing goals.  The sharing economy encourages people to interact with each other by using technology on an economic, ecological, and sociological level (Dubois, 2014). They connect together and share resources to create opportunities.  On a micro level this collaboration builds new possibilities.

Companies are finding benefit in working with other companies and stakeholders to generate higher levels of efficient and effective operations. Excess capacity can be sold during the slow times or purchased during the growth periods without enduring large outlays of capital expenditures. This creates flexible economic growth that better fills in the gaps between the larger economic pieces.

Building a stronger economy requires the connecting of people through collaborative and cooperative participation (Schultz, 2013). Information transference and understanding of the environment encourages effective economic decisions to create better market adjustments. Helping individuals connect to the system, voice their opinions, share information, further their skills, and find opportunities to create growth momentum. Consider four likely adjustments:

New Business Structures: The way in which people view business and new technology is changing the way business and work is conducted. For example, a company called Loconomics is owned by the employees who are employed there (Said, 2014). Virtual companies are sprouting, traditional companies are become flatter, and concepts like crowdsourcing are becoming a powerful business development tool. 

Renting Excess Capacity: Company’s naturally have slack in their capacity or may need additional production abilities at certain times of the year but do not have enough of a need to expand or build new facilities.  For example a company called Floow2 is developing an online site to encourage sharing of excess capacity such as vans and rental equipment in similar geographic locations (Schiller, 2014). Small businesses are lowering costs and improving capacity for growth without as much long term risks.

An Entrepreneurial Class: Using new technology makes a higher level of sharing possible. The transformation in the way people think about selling, buying, and sharing is transforming the way in which entrepreneurial activity occurs (Said, 2014). A person can hold a job and work part-time on a business without major disruption in their lives. Hedged skills and abilities can be used to foster the economic engine and encourage market adjustment.

Pressure on Governmental Structure: There are inherent risks associated new technology and ways of thinking about economic participation. As new business structures and models form they will naturally put pressure on government to adapt. There will be years of negotiation, legal and social interaction that will occur before a happy medium is found. We can think of the ride-share program and the need to define the business while ensuring safety (Weidner, 2014). A proper balance will need to be found to protect stakeholders and the public while still encouraging the testing of new ideas.

The sharing economy is a collaborative one. As people find information, market position, and share resources they are better able to adjust to market realities and see emerging trends. Sharing is not something that is beneficial for only people but also helps companies to buy, sell, and lease capacity to adjust with the market without expensive outlays that create sticky markets. More finite pieces help to create smoother economic transitions and market efficiencies within the capitalistic perspective.

Duboise, et. al. (2014). Connected consumption: a sharing economy takes hold. Rotman Management. 

Schultz, R. (2013). Adjacent opportunities: the collaboration economy. Emergence: Complexity & Organization, 15 (4). 

Said, C. (May 24^th, 2014). Cooperatives give new meaning to sharing economy. SF Southgate. Retrieved May 28^th, 2014 from http://www.sfgate.com/business/article/Cooperatives-give-new-meaning-to-sharing-economy-5502879.php?cmpid=hp-hc-jobs

Schiller, B. (May 27, 2014). The Sharing Economy Isn't Just For Consumers: Now Small Businesses Are Getting In On The Game. Fast Co Exist. Retrieved May 28^th, 2014 from http://www.fastcoexist.com/3030860/the-sharing-economy-isnt-just-for-consumers-now-small-businesses-are-getting-in-on-the-game

Weidner, D. (May 23^rd, 2014). The unique risks of ‘sharing economy’ companies. Market Watch. Retrieved May 28^th, 2014 from http://www.marketwatch.com/story/the-unique-risks-of-sharing-economy-companies-2014-05-23

Synergy Development in Economic Hubs

Successful development in Southeast Asia often rests partly in foreign direct investment and multinational firms. The author studied the investments between Malaysia and Singapore to determine that two-way investments embedded within business networks fostered synergy for economic growth (Yeung, 1998). It is a process of creating linkages between two economies, or entities, to ensure they develop from each other to create products for the market. 

What makes this process possible is that Malaysia and Singapore invest in each other’s economies. For example, Singapore invests primarily in services within Malaysia’s primary manufacturing base. Malaysia becomes an exporter of finished products and returns investment profits back to companies in Singapore. 

As the cross regional investments increase so does the business connection between the areas. The use of these connections and cross-capital investments creates a type of synergy based upon the varying skill sets embedded within each economy. Together they are able to provide stronger and better products and services that have more appeal on the market. 

When countries develop they change from importers to exporters (Dunning, 1998). This happens when the environment is conducive to local offerings; competitive strategy effectively reflects that need and the organizations are aligned to provide adequate products/services (Porter, 1990).  The area must align its business operations and offerings to the market need to effectively grow. 

Firms do not need to be owned by the exporting locality but the region should be the home location where investments turn into exports (Porter, 1986). The firms were the primary source of success in creating synergy. At a firm level it was these personal and business connections between companies that helped to create greater investment and cooperation for economic growth (Chandler, 1990). 

Most of the major firms from each country have cross operations. These cross operations connect to other networks within the countries and begin to share resources and knowledge. Significant competitive advantages can arise when companies from different countries and firms work together (Yeung, 1998). These are a result of:

-       Long-term relationships that reduce business uncertainty. 

-       Shared resources and information that offer “first mover” advantages.

-       Increased credit worthiness that improves financial flow.

-       Once established the system protects itself. 

Chandler, A. (1990) Scale and Scope: The Dynamics of Industrial Capitalism. Harvard University Press, Cambridge, MA.

Dunning, J. (1998)  Explaining International Production. Unwin Hyman, London.

Porter, M. (1986) Competition in global industries: a conceptual framework, in PO RT ER M. E. (Ed) Competition in Global Industries, pp. 15± 60. Harvard Business School Press, Boston.

Porter, M. (1980). The Competitive Advantage of Nations. Macmillan, London.

Yeung, H. (1998). Transnational economic synergy and business networks. Regional studies, 22 (8). 

Yeung, H. (1998a) The political economy of transnational corporations: a study of the regionalisation of Singaporean firms, Pol. Geogr., 17, 389± 416.