Product, operation and market strategies of technology-intensive born globals : the case of Israeli telecommunication born globals

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School of Business | Doctoral thesis (monograph) | Defence date: 2005-09-23
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Kansainvälinen liiketoiminta
International Business
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256 s.
Acta Universitatis oeconomicae Helsingiensis. A, 255
The study analyses the product, operation, and market strategies of technologyintensive Born Global companies from small open economies (SMOPECs) and explains their rapid globalization process. Conceptual holistic frameworks have been developed to explain 1) the factors behind the early rapid globalization of technologyintensive Born Globals, and 2) their globalization strategies in terms of products, operations and markets (POM). The frameworks consist of four groups of factors that are meso (industry) factors, macro (country) factors, micro (company) factors, and millimicro (founders) factors. The frameworks are built upon and develop Luostarinen’s pushpull, POM, and POM $ICA (products, operations, markets, price, intermediates, customers, and advertising) frameworks. In the empirical part, the globalization process and POM strategies of five Israeli telecommunication Born Globals were analyzed with the multiple case research method. Born global research has mainly sought to explain the recent emergence of Born Global firms, identify the characteristics of Born Globals, test whether traditional internationalization theories were able to explain the Born Global phenomenon, and suggest new theoretical frameworks or adjustments to the traditional theories. The holistic approach and the use of POM strategies and patterns in the study of Israeli technologyintensive Born Globals yielded the development of the PCOM (products, customers, operations, and markets) framework, the identification of PCOM patterns, and the identification of the factors influencing the globalization of technologyintensive Born Globals. It was found that Israeli technologyintensive Born Globals chose a global strategy from inception because of a) the global orientation of the founders, b) the global nature of the product and industry, c) the small domestic market, d) the short product life cycle and rapidly changing technology, and e) the peripheral location of Israel. The study found that the characteristics of the founders’ home country and the available financing options and choices thereof play an important role in the globalization strategies and process of the Israeli technologyintensive Born Globals. A new PCOM framework was developed. The study identified a product pattern starting with goods consisting of no or low service, followed by systems which includes a higher degree of service, and ending with highsystems consisting of a high degree of service. The customer pattern started with the consumer / SOHO (small offices & home offices) customers segment, followed by the enterprise customer segment, and ending in the highend customer segment. The operations pattern started with noninvestment marketing operations which consist of export of R&D services and export of products. This was followed by the directinvestment marketing operations of establishing foreign subsidiaries. Finally cooperative operations consisting of international strategic alliances and joint ventures, and other investment operations as acquisitions were used. The market pattern started with the US and Europe, followed by Asia, and finally all other markets. The study suggests that this market pattern can change over time and that it is determined by the business potential of each market. The managerial contributions stem mainly from the understanding of 1) the product and customer strategies which can lead to a more sufficient use of the firms limited resources while avoiding products and customer segments which are not suitable for technologyintensive Born Globals, and 2) the IPO as a possible financing source. For policy makers in SMOPECs the main contributions are the issues of 1) creating an entrepreneurship enabling environment, and 2) the possibility of identifying founders with suitable characteristics for the creation of successful technologyintensive Born Globals.
Supervising professor
Luostarinen, Reijo, professor
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