Companies seek to compete in the global market and
often look for overall methods to bring local companies to a wider audience. A
study conducted by Mets and Kelli (2011) helps leaders determine the overall
process of global expansion. High-technology companies, in this instance, are
considered those that actually contribute to new technologies versus those that
simply manufacture existing technologies. The movement from local to global markets
requires considerable learning and planning but is often done so in a haphazard
manner.
Companies often start in a national market as they
develop their business model. At some point they move to a global environment
which forces them to adapt and use new business models to ensure success. There
are a couple of different types of global businesses:
Born-Again
Global: Companies that operate within the domestic market
but due to an event become pushed into the global market.
Born
Global: Venture companies that are designed from the start
to compete on a global market.
Learned
Global: These are companies that used research, learning,
and knowledge to move into the global market by design.
When companies start they often hedge their knowledge
and competencies in order to make a market presence. These competencies and
skills are matched with an environment where information is transferred quickly.
Where trade barriers are lower, they generally have more success. The use of
the Internet affords the opportunity to move across borders in ways that
previous large companies with economies of scale dominated.
To help a company explode often requires the need
for additional funding and capital. Venture capitalists look for those
companies that are likely to sustain their operations into the future so that
return capital can be returned with a profit. According to Laanti et. al.
(2007) commonly used evaluations for technology companies include 1. Resources
and Capabilities and 2.) Strategies for Globalization.
Resource and capabilities includes the abilities of
the founders/managers, innovative abilities, business networks and finance
capabilities. Strategies for Globalization include product, operation, and
marketing strategies. It appears that
the two concepts are separate by the resources that can be focused on
expansion, leadership capabilities that determine how these resources are used,
and the voice of the company to reach potential customers make the difference.
The study by Mets and Kelli analyzed seven Estonia start-ups
to determine their globalization strategies. Some environments can help in
fostering technology start-up companies while some slow down or retard such
developments. Many organizations start by being suppliers to larger multinational companies and offer their own services through a freemium model. This model is the free
service or application with premium pay services. The companies appear to have developed
their products and their models at the same time. An interactive development
occurs where market exposure and adaption work together. The author does not
find that there is a single model for globalization but simply a general path
from local to international.
Lannt, R. et. al. (2007). The globalization
strategies of business to business born global firms in the wireless technology
industry. Industrial Marketing, 36.
Mets, T. & Kelli, A. (2011). Are hi-tech born
globals really born global? Management of
Organizations: Systematic Research, 59
