Piggybacking as international entry mode for small service firms: the case of BossIT

Abstract: There is a process ongoing where domestic markets are merging into a large
global market, and this clash creates a larger supply of products on the
international marketplace. Firms have to be able to adapt to these new
settings to stay competitive. Previous research has focused on how
manufacturing firms and foremost large firms go international. Since more
firms are outsourcing their services and employing small service firms to do
a specific part of their work abroad, our research is focusing on small
firms. For a small firm, it is important to choose the right mode of entry
when entering a foreign market.

There exists a large array of different modes to choose from when entering a
foreign market. The decision of what method to implement can be critical
since they may differ in how successful the international entry becomes. One
of these international entry modes that has not been received sufficient
attention in previous research and thus we have chosen to address is
piggybacking, which is when a company indirectly exports through a larger
firms distribution channels. To add into the research of piggybacking we
have focused on a small firm that is working with telecom in the service
sector. This research has provided an understanding that small service firms
can use piggybacking as an international entry mode.

The findings in this thesis show that small service firms can use
piggybacking to reduce the risk of a foreign expansion, and that the
relationship can develop to a mutual dependence between the firms.