Research Insights 7.1 Strategic Approach to Internationalization

International Market Development

Source: Chetty, S. and Campbell-Hunt, C. (2004). A strategic approach to internationalization: a traditional versus a “born-global” approach. Journal of International Marketing, 12(1), 57-81.

Abstract: This article is based on a study of 16 in-depth case histories of New Zealand firms. It uses both the traditional and the “born-global” approaches as a framework to study the internationalization processes of the firms. The authors use the histories to conduct a systematic analysis of the extent to which firms that might be categorized as following a traditional or born-global internationalization path differ in the strategies they have used and in their prior motivations and capabilities. The main findings are that many attributes of the born-global model also characterize firms that began their internationalization along traditional lines but were radically transformed in the process of achieving global reach. This study identifies the consequences of rapid international growth, referred to as “the gusher,” among these firms and the destabilizing effects of the experience as the firm is taken in unexpected directions. The authors conclude that the born-global model has much in common with the internationalization of small entrepreneurial firms and that its most distinctive elements lie in the model’s relevance to an increasingly globalized world economy and in the more aggressive learning strategies that are required to follow this path.

Insight:

Based on research undertaken amongst New Zealand firms, this article critiques the notion that there is a standard approach to internationalizing a brand and suggests that some brands, rather than launching from domestic markets, have to target international marketing from their very inception. The article illustrates the complex choices faced by firms that internationalize and examines how internationalizing, as a process, can in itself change an organization. The analysis of the case studies shows that most organizations do not exactly fit either the ‘born global’ or ‘traditional’ views. The authors argue that the ‘born global’ perspective, rather than describing a new type of company, refers to different market conditions in which rapid internationalization and global innovations force companies to internationalize faster than might have been expected in the past.

URL: http://journals.ama.org/doi/abs/10.1509/jimk.12.1.57.25651