Factors Important for Rapid Internationalization : A Multiple Case-Study of Born Global Internet-Based Service Firms in Sweden

Abstract: The evolution of globalization and technology have changed the playground for international business and made it possible for smaller businesses to compete internationally among large and capital intensive companies. Markets become increasingly alike with converging product preferences and changing the world into one large integrated marketplace easily accessible for firms of all sizes. Recent research in the field of International Business has shed light on small firms that rapidly become international market players, called “born globals” (BGs). These firms’ behavior contradicting traditional theory, such as the Uppsala Model, which propose that internationalization is an incremental process where firms must gain market knowledge and psychical distance to markets to internationalize. The Uppsala Model describes internationalization as a relatively resource-demanding process. However, the BGs most often have scarce resources, but still manages to enter several markets simultaneously. Previous studies have focused on manufacturing exporting BGs when investigate this relatively new phenomenon. Yet, little light is shed on BG service firms and their internationalization. The purpose of this study is to investigate the facilitating factors of resource-scarce Internet-based service BGs’ internationalization and barriers connected to it. Thus, this study aims to fill the research field of BG Internet-based service firms with more empirical data. The research questions are formulated as followed: RQ1: What important factors enable internationalization for Swedish born global Internet-based service firms? RQ2: Do the perceived barriers to internationalization for SMEs apply to Swedish born global Internet-based service firms, or are there other barriers present in their internationalization? As a theoretical framework, the researchers have combined three main theories, explicitly the Resource-Based View, Dynamic Capabilities and Business Models. Further, SMEs’ perceived barriers to internationalization are included in the theoretical framework as a sub-theory, to investigate if those barriers apply to BG Internet-based service firms. The researchers have performed a qualitative exploratory multiple-case study including six Swedish companies. The empirical data acquired is presented in a case-by-case structure relating back to the theoretical framework. The data has further been analyzed in a thematic way based on theories using the cross-case analysis technique. From the study, the researchers have found that the most important factors enabling internationalization for Swedish BG Internet-based service firms are an internationally standardized business model, human capital, and the level of dynamic capabilities. Regarding SME’s perceived barriers to internationalization, no clear pattern was found regarding the sample firms’ perceived barriers to internationalization. Which implies that more research is needed in this area.