What is a Born Global?
INTERNATIONALIZATION PROCESS
Time is the key here. International Entrepreneurship highlight the entry age, for example, Logitech, TeleMedicine Clinic, Biomedal, Ghenova Engineering, Blu:Sens…
The Born Global phenomenon arises from empirical evidence when observing that some companies, from very early, and in many cases of very small size, start in international markets with a diversity of entry modes that contradict the traditional sequential internationalization processes, that is, in other words, they skip the internationalization process, going from creation to global strategy. This is not determined by the operating sector; however, it influences the results and is necessary to understand the implications for management.
International Entrepreneurship defines it as the combination of innovative, proactive and risk-friendly behavior that crosses national borders and tends to create value in organizations. Some names that are often received are Born Global, Global-start-up, INV International New Venture (focuses on speed), Rapid Internationalisers (aggressive), or International Entrepreneurs.
Depending on the degree of international commitment, there are four different types of recently created international companies (INVs):
- New International Market Makers: these are start-ups that import or export, focusing on marketing and distribution tasks within the value chain.
- Multinational Traders: they are like the previous ones, but with more countries.
- Geographically Focused Start-Ups: they meet the needs of a region of the world through foreign resources and collaboration.
- Global Start-Ups: they coordinate multiple activities in unlimited locations.
What characterizes Born Globals?
A new international company does not necessarily imply rapid growth in foreign markets. The new global companies are those that experience rapid growth both in the percentage of activity carried out abroad and in the geographical dispersion of their markets:
- They have internationalized immediately after, or in a short term, after their creation, presenting rapid growth and first-in-one advantages.
- They identify opportunities and can exploit them both internationally and globally.
- They are innovative and creative, not only in technology but also in the way they do business.
- They are prone to taking risks or do not identify them the same.
- They are flexible and able to respond quickly to opportunities that may emerge.
- They are well connected internationally and can mobilize their external resources.
- It is quite common for them to present international human and social capital in their early days.
Why study Born Globals?
- It involves a paradigm shift in the study of the internationalization process.
- Helps us understand the internationalization of small businesses.
- It introduces the perspective of networks within the internationalization process, something already raised from the export promotion programs.
- The administration can avoid obstacles to the internationalization process.
If they have been thought to be a threat, it seems more likely that these types of companies represent more of an opportunity than a threat to other companies, such as network partners, playing a role of specialists within the value chain of industries, or as links between different value chains; as stimuli for innovation and, therefore, the growth of industries; and as potential targets for joint venture or acquisition by other companies.
What factors enable the international speed of these new companies?
- Companies develop a product/service that has global market potential, so the domestic market is usually insufficient.
- These are specialized products, which are usually based on specific technologies, on a unique or superior design, on specific know-how, or highly specialized systems or processes.
- They are present in all types of industries, although they have a greater presence in high-tech industries.
- They tend to follow a differentiation and niche strategy.
What factors influence the Born Globals phenomenon?
- Factors related to the environment: the influence of the sector (technology-intensive and not technology-intensive) the sector is a source of competitive advantage as it determines dynamism and the different key success factors; and domestic market conditions.
- Factors related to organizational aspects: previous international experience, previous sector experience and having social networks.
- Factors related to founding progress: is there an international entrepreneurial orientation? The view could be taken that, there are differences in the psychological bases (upper echelons).
What international strategy to follow?
A Born Global must follow a strategy focused on speed, not following a linear development process (since there is a diversity of development among Born Globals).
Depending on the case, carry a combination of market dispersion, with resources focused on a few markets (niche strategy). They tend to focus on leading and high-growth markets. As there is low commitment in the entry modes, emphasis should be placed on agreements with collaborators.
Psychic and psychological distances are not important, so the manager’s experience and networks prevail since they are extremely influential.
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