Going International? : Recommendations for SMEs in early stages of internationalization

Abstract: Executive summary In a world where the Internet and good communications accelerates the globalization, having connections across borders becomes a competitive advantage. The easy access to a constant stream of information is making the opportunities countless, adding to the equation that the Internet and supplementary techniques such as different types of software are still very young, the opportunities will keep on emerge. At the moment there are still great gaps in terms of technology between countries, which enables fast growing companies such as Lintner to fill a niche and gain new market shares due to their technological lead and managerial practices. But how should they enter the new markets and reach the new costumers? This research has put the emphasis on creating a guiding discussion on how an international expansion strategy could be formulated. We have found that organizations can lower the risk and increase their profit potential by combining several strategies, that they start by expanding with a low-risk strategy and then increase the investments on the market to enable higher profitability. The benefits with this approach is that a small computer software company can take advantage from the simplicity and low needs for capital and then gradually increase the investment as they get market knowledge and a solid customer base. They need to work around challenges such as cultural differences by allowing the due diligence to take time and the targeted company to become familiar with the intentions of the collaboration. It is important that the organization prepares itself for the internationalization; this is done by the creation of slack resources. The strategy they choose must be formulated and incorporated in the overall business strategy. To successfully describe the alternatives to expansion currently available to Lintner, an extensive literature review has been conducted. But to fully understand the surrounding environment and the challenges with international expansion, we have conducted several interviews within Lintner, but also with three organizations that have previously found themselves where Lintner is today. The findings from these interviews were interpreted and placed in context to Lintner’s and to companies in their specific situation. This has been done in order for us to create a meaningful contribution to Lintner’s future growth.