Survival of the Born Globals firms

Uutisen oletuskuva
In the research report "Born global growth stages and survival" University of Vaasa´s and Aalto University’s researchers suggest the most important research results and recommendations for born global firms.

The aim of the project was to find out how innovative Born Globals can grow to become truly global firms while also surviving, taking into consideration their limited resources to address the global market opportunities and required holistic management of the process.

Born Globals are firms that from inception internationalize their business outside home country and often also rapidly globalize their business to a number of continents.

Born Global growth stages

– We have found that there are four critical phases in Born Global growth: introductory, commercialization and foreign entries, rapid growth and foreign expansion, and rationalization and foreign maturity, one of the editors of the report and the director of the project consortium, professor Peter Gabrielsson from the University of Vaasa tells.

It was found that organic growth is the main growth method, but rapid global growth also calls for the use of partnerships and acquisitions.

– We could see that growth and survival are facilitated by the existence of sufficient but not slack of resources. Proactiveness and networking capabilities are crucial for advancing through growth phases while dynamic capabilities are critical for survival. Interestingly, it was found that government support advances growth, but survivability may be endangered especially in the long term.

Born Global networks and firm performance

Networks are important for Born Globals to grow successfully to global markets. There are four network elements that the firm needs to pay attention to: network content, structure, centrality, and management.

Born Global managers need to continuously evaluate the firm’s relationships, assess the mutuality of benefits, avoid overreliance on a single partner, and take according action early on, and not hesitate to restructure relationships in time and as needed.

– The results show that the stronger the relationships between network partners and the more central the Born Global becomes, the higher the firm performance.

– Managers should use their closest relationships to enhance their network centrality and extend that to improve the firm’s influence on its industry. They should also adopt a proactive approach to managing networks since it tends to yield better results than a passive approach. This includes extending their networks beyond current boundaries and even creating new networks for example, by inviting companies within their sector to cooperate in various ways, doctoral researcher Fabian Sepulveda from Aalto University explains.

Entrepreneurial marketing strategies

The degree of innovativeness and adaption of marketing strategies are especially key areas to be addressed in the strategic decision-making of Born Global firms.

– The innovativeness of marketing strategies should go beyond product and technology innovativeness. Such strategies can be pursued by taking novel approaches to build value innovation, leveraging external resources in co-creating marketing strategies and value with others, and utilizing the possibilities of low-cost marketing.

– Rapid globalization also compels a Born Global to make strategic decisions about the degree and manner of adaption of marketing strategies and such decisions should involve both customer- and country/region-based considerations. Based on our results the two dimensions of marketing strategy – innovativeness and adaptation – are extremely important for growth and success of Born Globals, doctoral researcher Johanna Hallbäck from the University of Vaasa concludes.

Born Global firm striving for high marketing performance should acknowledge the importance of fit between the marketing strategy innovativeness and adaptation, the industry environment and the global growth phase of the firm.

Governmental support

Born Globals make valuable contributions to Finland’s economy such as creating new jobs, improving international trade balances, and adding to the GDP.

The three types of support most frequently wanted by firms were financing, international sales and marketing support, and research and development aid says professor Mika Gabrielsson from Aalto University.

– It seems that government support has a positive influence on the growth of firms, but it is highly important that the firms are competitive on their own. Without the proof provided by paying customers, government support eventually delays the inevitable failure of firms that do not independently pass the test of private markets.

The research is part of the "Born Globals – Growth Stages and Survival" -cooperation project between the University of Vaasa, Aalto University School of Economics and six partner organisations: Finpro, Biohit, Hartwall Capital, Innohome, IonPhase and Mapvision. The financiers of the project are the LIITO-program of the Finnish Funding Agency for Technology and Innovation (Tekes), and the partner organisations. The project was coordinated by the University of Vaasa.

The research report:

Gabrielsson, Peter, Mika Gabrielsson, Johanna Hallbäck & Fabian Sepulveda (eds) (2011). Born global growth stages and survival – Most important research results and recommendations. Reports 170.

See also Research Group in International Marketing

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