...Internationalization of SMEs Overview: 1. Introduction 2. Motivation for Internationalization of SMEs 3. Strategies for Internationalization of SMEs 4. Risks and Opportunities 5. Internationalization of SMEs – Best approach 6. Conclusion 7. References Introduction In Europe companies with less than 10 employees are considered to be micro-firms, those with less than 50 employees are small-firms and those with less than 250 employees are considered as medium-firms. In the US however the size of small firms sums up to 100 employees and medium sized firms may have less than 500 employees. SMEs are key actors in the world economy because they are an important part of GDP and play a big role for employment. Since today’s world becomes more and more globalized it is important that firms can compete on an international level. Big enterprises often choose to internationalize their business but for them this process mostly isn’t as risky as for SMEs, because while big firms may lose parts of their firm budget if something goes wrong, SMEs have to fight for their existence and may disappear at all if they choose a wrong approach of internationalizing. Usually small start-up companies do not survive longer than the first 5 years therefore it is very important for SMEs to take the right steps in order to become successful. Motivations for Internationalization of SMEs There are different types of motivations for going international. These are...
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...SMEs and the Internationalisation Process Giovanni Roncucci Chairman Roncucci&Partners Group April 5th 2016 Agenda Globalisation & Internationalisation Main Characteristics of the Italian System Micro, Small, and Medium Enterprises SMEs and the Italian System Italian SMEs and Internationalisation Business Plan and Budgeting Planning Roncucci & Partners 2 Globalisation & Internationalisation Roncucci & Partners 3 In the last 10-15 years the international context of the global economy changed notably. Market globalisation is one of the variables to be considered as crucial within the critical success factors of every entrepreneurial economic initiative. In this framework the challenge of internationalisation becomes a fundamental tool to sustain and strengthen the competitiveness of an economic system. Roncucci & Partners 4 Commercial Flows of Geographical Areas Table 1 - Volume of International Trade per Geographical Area and Country(a) - From 2009-2013 (price basis=2005, at percentual value) Countries & Areas 2009 2010 Export 2011 2012 2013 2009 2010 Import 2011 2012 2013 EUROPE 38,89 37,97 38,04 37,44 37,11 39,67 38,19 37,41 35,98 35,19 European Union France Germany Italy United Kingdom Spain 35,52 3,63 8,52 2,97 2,82 1,73 34,86 3,49 8,59 2,89 2,76 1,69 34,98 3,41 8,67 2,86 2,84 1,74 34,32 3,32 8,47 2,80 2,63 ...
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...and Prospects of SMEs in Bangladesh for Internationalization” Course no: BA-412 Course name:Business Research Methodology Submitted to: Eijaz Ahmed Khan Assistant Professor Business Administration Discipline. Submitted by: Pioneer II Group Members Mahmudul Hasan Siddiqui ID # 040308 Tasmin Islam ID # 040316 Zahir Abdullah ID # 040320 Salma Begam ID # 040328 Mohammad Ali ID # 040342 4th Year, 2nd Term Business Administration Discipline Khulna University, Khulna. Date of Submission: 13 July, 2008 “Competitiveness, Challenges and Prospects of SMEs in Bangladesh for Internationalization” 1. Introduction: The Least Developed Countries (LDCs) in the east have started refocusing their attention on SMEs to enhance their role in bringing about structural changes in their economies. For Bangladesh SMEs have assumed special significance for poverty reduction programs and potential contribution to the overall industrial and economic growth through SMEs internationalization process. This research uses some studies to identify some competitiveness, challenges and prospects of SMEs in Bangladesh for Internationalization as well as some constraints that have been hampering SME growth and to provide some pointers for the future. In Bangladesh this SME sector is contributing more than 25% of the total GDP. So the economic escalation and poverty alleviation of this country becomes the opposite side of a coin with SMEs development. With...
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...Summary: The article focuses on the analysis of the similarities and differences of the internationalization processes and strategies among Norwegian and Lithuanian SMEs (small and medium sized enterprises). Therefore R. Korsakiene and M. Tvaronaviciene mention some general internationalization models and theories of SMEs like the stage approach, foreign direct investment theory or the network approach. The following chapter describes the link between internationalization and entrepreneurship which leads to a definition of international entrepreneurship as “the discovery, evaluation, and explotion of opportunities across national borders” (McDougall, Oviatt 2005). Afterwards the authors introduce different motives and barriers of internationalization as well as factors that influence the foreign market selection and modes of entering new markets. To prove the stated characteristics the authors did a study using questionnairs which were sent to firms in Lithuania and Norway. As a result the authors get insights which internal and external motives and barriers as well as foreign market selection criterias and operational modes are most relevant for Norwegian and Lithuanian SMEs. There were many similarities among both countries like the “small domestic market” as a motive to expand their operations toward foreign markets as well as too much bureaucrarcy as one of the main barriers to enter new markets. On the other hand the authors found also differences, especially when it comes...
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...References for Literature Review (Final) 1. SMEs internationalisation Agndal, Henrik; Chetty, Sylvie. The impact of relationships on changes in internationalisation strategies of SMEs, European Journal of Marketing41. 11/12 (2007): 1449-1474. Etemad, H. and Wright, R.W. (2003), “Internationalization of SMEs: Toward a New Paradigm”, Small Business Economics, 20, 1-4. Ibeh, K.I.N. (2003), ‘Toward a Contingency Framework of Export Entrepreneurship: Conceptualisations and Empirical Evidence’, Small Business Economics, 15 (1), 49-68. Prashantham, S. and Floyd, S.W. (2012), “Routine Microprocesses and Capability Learning in International New Ventures”, Journal of International Business Studies, 43: 544–562.| Reuber, A.R. and Fischer, E. (1997), “The Influence of the Management Team’s International Experience on the Internationalization Behaviors of SMEs”, Journal of International Business Studies, 28 (4), 807-825. Sen, Arup; Haq, Kushnood. Internationalization of SMEs: Opportunities And Limitations In The Age Of Globalization, The International Business & Economics Research Journal9. 5 (May 2010): 135-142. Smolarski, Jan; Kut, Can., The impact of venture capital financing method on SME performance and internationalization, International Entrepreneurship and Management Journal7. 1 (Mar 2011): 39-55. falseZhu, hong; hitt, michael a; tihanyi, laszlo. The internationalization of smes in emerging economies: institutional embeddedness and absorptive capacities, journal of small...
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...European Management Journal (2008) 26, 429– 440 journal homepage: www.elsevier.com/locate/emj Cooperative internationalization of SMEs: Self-commitment as a success factor for International Entrepreneurship Matthias Fink a, Rainer Harms b, Sascha Kraus a c,* Vienna University of Economics and Business Administration, Department of Small Business Management and Entrepreneurship, Augasse 2-6, A-1090 Vienna, Austria b University of Twente – NIKOS, Dutch Institute for Knowledge Intensive Entrepreneurship, Postbus 217, NL-7500 AE Enschede, The Netherlands c ¨ University of Liechtenstein, Furst-Franz-Josef-Strasse, LI-9490 Vaduz, Liechtenstein & Utrecht University, Janskerkhof 12, NL-3512 BL Utrecht, The Netherlands KEYWORDS Internationalization; SME; Trust; Cooperation; Entrepreneurship; Austria; Czech Republic; Slovenia Summary Self-commitment is the willingness of individuals to commit to cooperation with a partner without the safety net of controls or sanction mechanisms. This article shows the unique performance contribution of self-commitment in the context of cooperative internationalization of SMEs in several ways: First, we use a multiparadigmatic approach to cooperation theory to argue why self-commitment as a coordination mechanism is particularly relevant in the context of cooperative internationalization. Second, we develop a new operationalization of self-commitment which takes the context of international cooperations into account. Third, we show...
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...for companies and other organizations We have first listed the thesis projects that are available to do for companies and organizations. If you are interested in these projects, please mark the topic to the Indication of Interest Area form the same way than any other topic. It should be noted that the students selected to do the thesis from these topics must be motivated and committed for the work. Please do not contact these organizations yourself before the selection process has been completed for all students. More information on topics can be asked from Mari Syväoja or Tomi Heimonen. Organization: Thesis Biofenno projects for (www.biofenno.fi) companies and organizations Selected Thesis Topics for companies and organizations Internationalization plan Plan how to take and promote product Tuovi Tuotevirtakirjanpito to EU markets. Tuovi Tuotevirtakirjanpito is a stock and feed recording program for organic farmers. It produces necessary stock and feed reports for annual inspection. Also stock balance reporting benefits farm managements. Because Tuovi Tuotevirtakirjanpito complies with all the regulations EU has set for organic farmers, it has possible markets in EU. Aalto School of Competitive environment of Small Business Center Business, The Aalto Small Business Center wants to produce an analysis of their competitive environment in Small Business Center terms of areas of expertise, product segments etc. in order to differentiate themselves from their (www. competitors and...
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...Academic Research Conference (ITARC ), 7 – 8th November, 2012, London.UK. Network-based theories and internationalization of firms: applications to empirical studies Mojtaba Hosseini and Hosseini Dadfar Linkoping University, Sweden Key Words Network based theories, Internationalization, Revised Uppsala Model, ARA-Model, and Network Embeddedness. Abstract By using a topology of the most frequently used network-based theories on the firms’ internationalization; this paper is going to present some recommendations to correctly apply those theories in future internationalization studies. We have identified eight network-based theories that are broadly used in internationalization studies. These theories are Relationship Approach, Social Network Analysis and Network Mapping in American schools, and Industrial Marketing and Purchasing Group (IMP) Interaction Approach, ARA-Model, Network Embeddedness, Revised Uppsala Model and Network-based Internationalization Theory, which are developed by European universities. This paper, will explain these theories, their applications to internationalization and then making some recommendations for the future empirical studies. Figures and tables are used to clarify and summarize the theories and their empirical applications. Introduction Researchers have been using of different basic theories to explain the internationalization of companies. For example, transaction cost approach (TCA) (Anderson 1986; Lee, Koh, and Heo 2011), resource-based...
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...INDEX 1. INTRODUCTION 1.1. 1.2. BACKGROUND ENVIRONMENT OF ENTREPRENEURIAL 2. THE IMPORTANCE OF SMEs 3. ROLE OF ENTREPRENEUR 4. ENTREPRENEURSHIP. International 5. INTERNATIONALIZATION PROCESSES. Theories. 5.1. 5.2. UPSALA MODEL. HECKSCHER-OHLIN MODEL 6. THE PROCESS OF INTERNATIONALIZATION 7. ENTREPRENEURIAL MARKETING 7.1. 7.2. 7.3. SWOT ANALYSIS MARKET ENTRY STRATEGY COOPERATION STRATEGY 8. TARGET COUNTRY 9. GEM 10. GOVERNMENT SUPPORT 11. CONCLUSION 12. RECOMMENDATIONS 13. REFERENCES 1. INTRODUCTION: For this work I decided to open in France Cocoon clothing company, located in Granada, retailing, I have chosen these two countries because they are within the top 5 countries of the European Union in the textiles sector and are two major countries with major fashion catwalks. I chose this company because it is a small company, and is a women's clothing store that has clothes very hard to find in other stores. I chose the fashion industry especially because according to my previous studies I think it's an everchanging industry in terms of fashion and is an area in which the image is very important in Spain. Cocoon is a shop that sold clothing especially at night but you can also find jeans, skirts, blouses, accessories, handbags and more clothing at prices that will chord with our product quality. Cocoon is a very experienced workers and always try to help the customer find what you want, is a company with more than 16 years of experience in this sector. 1.1...
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...ARTICLE CRITIQUE Introduction Hsu, Chen, and Cheng (2013) used a cross-sectional study to analyze 187 small and medium enterprises (SMEs) in Taiwan to determine if CEO attributes contributed to internationalization success as defined by firm performance. Based upon upper echelon and information processing theories, the researchers hypothesized that five CEO characteristics (age, tenure, education, international experience, and duality - that is, CEO also as board chairman) were significant moderating effects upon international firm performance. Using regression analyses, the researchers concluded that four of the predictors, excluding CEO tenure, had a significant moderating effect upon firm performance. The rationale for the study was described by the researchers as a need to analyze CEO characteristic attributes because such CEO predictors had not been addressed in previous studies of internationalization and firm performance. Therefore, this study appeared to fill a gap in the literature. The three authors seemed to be a well-balanced team to tackle this particular academic issue. They individually had well-suited combinations of experience in finance, risk management, and international business. Literature Review The literature review was extensive and was broken down logically into two main sections: Internationalization/Firm Performance and Upper Echelon/Information Processing theories. Upper Echelon theory and Information Processing theory appeared to...
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...INTERNATIONAL BUSINESS AND EMERGING MARKETS (KMGT-620-5A) INSTRUCTOR: Dr. JIM SKERTICH INTRODUCTION: The article written by Oviatt and McDougall (1994) more than a decade ago and attracted so much attention is in regard to young firms and their growth in the global marketplace. In their article, they were able to bring to fore the importance of International New Ventures (INVs), internationalization and their advantages to the global marketplace. SHENKAR, O. and LUO, Y. (2008, p.11) describes INVs as firms that target the international market as they are launching their operations while according to SHENKAR, O. and LUO, Y. (2008, p.534), Oviatt and McDougall (1994) defined INVs as a business organization from its start off, seeks competitive advantage from the use of resources and the sale of output from different countries. Oviatt and McDougall (1994) asserted that age at internationalization was critical to its successful survival, expansion and performance whereas ZAHRA, S.A. (2005) was of the view that variation could impact on the clarity of an organizations essence to internationalization. They also opined that for a firm to internationalize, it is influenced by its production capacity, the size of its home market, economic and cultural forces as well as traditional firms that enter into the international market. Of note also was the issue and importance of International Entrepreneurship (IE), which has received scholarly attention in the past. In her article, ZAHRA,...
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...SESSION 1 2 CHAPTER 1: Global marketing in the firm 2 1. Introduction to globalization 2 2. The process of developing the global marketing plan 2 3. Comparison of the global marketing and management style of SMEs and LSEs 2 4. Should the company “stay at home” or “go abroad”? 3 5. Development of the global marketing concept 3 6. Forces for global integration and market responsiveness 3 7. The value chain as a framework for identifying international competitive advantage 4 8. Value shop and the service value chain 5 9. Information business and the virtual value chain 5 CHAPTER 2: Initiation of internationalization 8 1. Introduction 8 2. Internationalization motives 8 3. Triggers of export initiation (change agents) 9 4. Internationalization barriers / risks 9 SESSION 2 11 CHAPTER 3: Internationalization theories 11 1. Introduction 11 2. The Uppsala internationalization model 11 3. The transaction cost analysis model 11 4. The network model 12 5. Internationalization of SMEs 12 6. Born globals 12 7. Internationalization of services 13 CHAPTER 4: Development of the firm’s international competitiveness 15 1. Analysis of national competitiveness (the porter diamond) 15 1.1. Factor conditions 15 1.2. Demand conditions 15 1.3. Related and supporting industries 15 1.4. Firm strategy, structure and rivalry 15 1.5. Government 15 1.6. Chance 15 2. Competition analysis in an industry 15 2.1....
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...A SMALL AND MEDIUM ENTERPRISES DEVELOPMENT PERSPECTIVE OF THE HOSPITALITY INDUSTRY IN DUBAI The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be violation of applicable law. Dubai SME encourages the dissemination of its work and will grant permission to reproduce portions of the work promptly. All queries should be addressed to Dubai SME at essam.disi@sme.ae (P.O. Box 66166, Tel:+971 4361 3000, www.sme.ae ) The information contained herein in the Report is confidential and part of the “Industry Cluster Studies” being done by Dun & Bradstreet for Dubai SME. No part of this document may be reproduced, copied, distributed or made available in any form whatsoever to any person without express prior written permission of Dun & Bradstreet (“D&B”). Industry Cluster Studies: Hospitality Industry ‘Culinary Entrepreneurship’ --- the report highlights potential opportunity for culinary experts as well as Food & Beverage entrepreneurs to set-up innovative concepts (comprising food, environment & service) and brands that can be globalised / internationalized. Dubai is known for its hospitality industry upscale properties as tourism destinations and myriad cuisines prepared by renowned chefs from across the world. The cosmopolitan nature of the city is shaped by a large number of franchised brands. Although hotel properties include established local brands (like Jumeirah Group), the F&B service scenario...
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...opportunities and challenges. Traditionally speaking, medium sized enterprises (SME) are primarily facing towards their home-market (Lindmark, 1998). However, due to the trend of globalization, more small and medium-sized enterprises have already started international expansion (Knight and Cavusgil, 1996). In the process of economic globalization, the competitive advantage depends largely on the enterprise innovation and the ability to enter into the market quickly. This essay will discuss the globalization process of a manufacturing company located in a G7 economy making high quality agricultural equipment and both the positive and negative features of globalization. The globalization process of the company Although internationalization is a common sense in today’s marketing, however, to discuss the internationalization process of enterprise, it is important to define enterprise internationalization itself clearly. Beamish(1990) defined enterprise internationalization as "the process by which firms both increase their awareness of the direct and indirect influence of international transactions on their future, and establish and conduct transactions with other countries." (Beamish, 1990, p. 77) It can be concluded that there are two most important elements in enterprise internationalization — internal organization and external investment. Welch and Luostarinen(1999) pointed out that “internationalization is the process of increasing involvement in international operations.” Both...
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...WTO: World Trade Organization Objectives of WTO: Objectives of WTO Important objectives of WTO are mentioned below: (i) to implement the new world trade system as visualised in the Agreement; (ii) to promote World Trade in a manner that benefits every country; (iii) to ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; (iv) to demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; (v) to enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; (vi) to increase the level of production and productivity with a view to ensuring level of employment in the world; (vii) to expand and utilize world resources to the best; (viii) to improve the level of living for the global population and speed up economic development of the member nations. Functions of WTO Functions of WTO The former GATT was not really an organisation; it was merely a legal arrangement. On the other hand, the WTO is a new international organisation set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following...
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