卡伦国际企业管理第6版 课件 CH07 Small Business and International Entrepreneurship Overcoming Barriers and Finding Opportunities

7SmallBusinessandInternationalEntrepreneurship:OvercomingBarriersandFindingOpportunitiesLearningObjectives(1of2)Understandthebasicdefinitionsofsmallbusinessandentrepreneurship.Explainhowsmallbusinessescanbeginasglobalstart-upsorfollowthestagesofinternationalization.Understandhowsmallbusinessescanovercomebarrierstointernationalization.Identifywhenasmallbusinessorentrepreneursshouldconsidergoinginternational.LearningObjectives(2of2)Describehowsmallbusinessesorentrepreneurscanfindcustomers,partners,ordistributorsaboard.Understandhownewventurewedgestrategiescanbeusedinforeignmarkets.Explainthefactorsdrivingentrepreneurshipataninternationallevel.WhatIsaSmallBusiness?(1of2)“Small”businesses:Constituteover98%ofbusinessesinEurope,NorthAmerica,andJapanEmploymorethan50%oftheirlocalpopulationsProducenearly50%ofthesecountries’GNPsCreatemorethan2/3ofnewjobsintheUSWhatIsaSmallBusiness?(2of2)Theterm“Small”businessisvariouslydefined.Thesmallbusinesshas:UN&OECD:lessthan500employeesThepopularpress:lessthan100employeesUSSmallBusinessAdministration:DefinitionvariesbyindustryUsesbothsalesrevenueandthenumberofpeopleInternationalizationandtheSmallBusinessTwomodels:Smallbusinessstagemodel:processoffollowingincrementalstagesofinternationalizationGlobalstart-uporBorn-globalfirm:companythatbeginsasamultinationalcompanySmallBusinessStageModel:SixStages(1of2)Stage1:PassiveexportingFirmfillsinternationalordersbutdoesnotseekexportbusiness.Doesnotrealizeithasaninternationalmarket.Stage2:ExportmanagementSpecificallyseeksexports,usuallyrelyingonindirectexportingduetoresourcelimitations.Majororientationchangeforthefirm:Exportingisseenasanopportunity.Stage3.ExportdepartmentSignificantresourcesdedicatedtoseekingincreasedsalesfromexporting.Nolongerseeexportingasaprohibitiverisk.Keyistofindgoodlocalpartnerfordistribution.

SmallBusinessStageModel:SixStages(2of2)Stage4:SalesbranchesHighdemandjustifiessettinguplocalsalesoffice.MusthaveresourcestotransfermanagerorhirelocalmanagersStage5:ProductionabroadFirmmovesbeyonddownstreamactivities;useslicensing,jointventuresordirectinvestment.Thisisadifficultstagebecausefailuremayputwholefirmatrisk.Stage6:ThetransnationalItssmallsizedoesnotpreventthefirmfromdevelopingaglobalintegratednetwork.SmallBusinessGlobalStart-upsorBorn-GlobalFirmsCompaniesbeginasmultinationals;theymustpursueaglobalvisionfrominceptionandglobalizerapidly.Born-globalsarecriticaltotheinternationalbusinessenvironment.Threattotraditionalmultinationals:Veryflexible,fastmoving,knowledgeintensive;introduceinnovations.Globalstartupsareriskierthandomesticstartups.Yet,theyofferanavenuefornewventuresuccessinrapidlyglobalizingindustries.Exhibit7.1:

ComparisonofSmallBusinessModelFirms&Born-GlobalFirmsSmallBusinessE-CommerceTechnologyhasleveledtheplayingfieldforsmallfirms.Theinternetoffersarapidwaytogointernational.Awebsiteconfiguredfore-commerceisalowcostandquickwaytosellacrossnationalborders.Advantagesof

SmallBusinessE-CommerceAbilityofsmallfirmstocompetelocally,nationallyandinternationallyPossibilityandopportunityformorediversepeopletostartabusinessConvenientandeasywayofdoingbusiness24hoursaday,7daysaweekInexpensivewaytocompetewithlargerbusinessesMakesdomesticproductsavailableinothercountriesHowever,psychologicalandresourcebarriersremain.OvercomingSmallBusinessBarrierstoInternationalization(1of2)Smallsizebarriersinclude:LimitedfinancialandpersonnelresourcestodedicatetointernationaloperationsLackofsufficientscaletoproducegoodsefficientlyTopmanagerswithlimitedinternationalexperience,ornegativeattitudes,viewingthemasbeingtooriskyOrganizationalcultureswithstrongdomesticorientationContextualandenvironmentalissuesthatmagnifydifficultiesininternationaloperationsOvercomingSmallBusinessBarrierstoInternationalization(2of2)Overcomesmallbusinessbarrierstointernationalizationby:DevelopingasmallbusinessglobalcultureChangingattitudesofkeydecisionmakersGainingexperienceOvercomingsizelimitationsUsingthesmallbusinessadvantageDevelopingaSmallBusinessGlobalCultureGlobalcultureisachievedwhenmanagersandworkersvalueviewstrategicopportunitiesasglobalandnotjustdomestic.Workerssharecommonlanguagetodescribeinternationaloperationsatalllevels.Developaframeworktounderstandinternationaloperations.Developaninternationalmindset.Globalthinking:Dobusinessandconductvaluechainoperationsanywhereintheworld.CharacteristicsofKeyDecisionMakersCharacteristicsofdecisionmakersaffectingdevelopmentofaglobalculturePerceivedpsychologicaldistancetoforeignmarketsInternationalexperienceRiskaversionOverallattitudestowardinternationalstrategiesChangingAttitudesof

KeyDecisionMakersHowtochangeattitudesofkeydecisionmakers:BeginwithsalestocountriescloseincultureandgeographyExperienceandsuccessovercomeskepticismregardingtheinternationalmarkets.Eventually,foreignmarketsperceivedasmoreprofitablethandomestic.Butpositiveattitudescrucialforglobalstart-upsfrombeginning.Exhibit7.2:

AttitudinalDifferencesConcerningInternationalizationforSmallBusinessGainingExperience:

DutiesandthePersonalLifeoftheSmallBusinessCEOInternationalizationaffectspersonallifeandcompanydutiesoftheCEOmorethanworkers.Forsmallfirm,openingnewmarketsisCEO’stime-consumingandchallengingpersonalresponsibility.TheCEOmustbearsocialandbusinesscosts:Increasedtravel,stressfromundertakinganewventure,canadverselyaffectfamilylife,riskwholebusiness.Jobrestructuring,retraining,newskillsforinternationalbusinessrequirements.Exhibit7.3:

TrainingandKnowledgeNeedsofSmallFirmCEOsEnteringInternationalizationIsSizeaBarrierforSmallBusinessInternationalization?Liabilitiesofsmallness:challengesfacingsmallbusinessesintheresourcesnecessarytointernationalizeLargefirmsservemorenationalmarkets,haveaccesstoresources,cannegotiatewithgeographicallydispersedpartners,&investincrossculturaltraining.Smallfirmslackscaletoproducegoodsorservicesasefficientlyaslargercompanies,andabsorbrisks.Sizeliabilities,however,mayexistonlyintheinitialinternationalizationstage.Usingthe

SmallBusinessAdvantageSpeedbecomesthesmallbusinessadvantage:FasterinnovationCanchangeproductsandinternaloperationsfasterSpeedcanovercomesizedisadvantagesLargerfirmsmustoftenovercomebureaucraticprocedures,slowtotakeadvantageofnewmarketsFirsttomarketallowscaptureofmarketsharebeforelargercompaniescanreact.TheFuture:FallingBarriersto

MultinationalSmallBusinessesGovernmentprogramstosupportsmallbusinessesareexpanding.Highimpacttradeagreements(NAFTA,WTO)maketradelesscomplexandreduceresourcerequirements.GrowthininternationalbusinessinformationavailableonInternetmakesknowledgeeasilyavailabletosmallbusinesses.Suchknowledgeencouragesentrepreneurstoconsidergoingglobal.WhenShouldaSmallBusinessGoInternational?(1of2)Asmallbusinessthatanswers“yes”tothesequestionsmaybereadytogoglobal:Dowehaveaglobalproductorservice?Dowehavethemanagerial,organizational,andfinancialresourcestointernationalize?Arewewillingtocommitresourcestofacetherisksofinternationalization?Isthereacountryinwhichwefeelcomfortabledoingbusiness?WhenShouldaSmallBusinessGoInternational?(2of2)Asmallbusinessthatanswers"yes”tothesequestionsmaybereadytogoglobal(cont’d):Isthereaprofitablemarketforourproductorservice?Whichcountryshouldweenter?Dowehaveauniqueproductorservicethatisnoteasilycopiedbylargemultinationalsorlocalentrepreneurs?Dolocationadvantagesexistupstreaminthevaluechain?Canweaffordnottobeamultinational?Exhibit7.4:

QuestionstoConsiderintheSmallBusinessDecisiontoGoInternationalExhibit7.5

StepsinPickingaForeignMarketGettingConnectedtotheInternationalMarketParticipationstrategies:SameparticipationoptionsaslargerfirmsExporting,licensing,jointventures,andforeigndirectinvestmentMostsmallbusinesseschooseexporting,anduseservicesofETCsorEMCstogettheirproducttointernationalmarketsFindingCustomersandPartners:CustomerContactTechniquesCustomerContactTechniquesinclude:TradeshowsCatalogexpositionsInternationaladvertisingagencies&consultingfirmsGovernment-sponsoredtrademissionsDirectcontactExhibit7.6:

InternationalTradeLeads:

AWebSamplerReadytoGoandConnected:ASynopsis(1of2)Askthediagnosticquestionsonreadinessforinternationalization.FocusonwhetherthesmallfirmhastherightproductsandadequateresourcesThenconsiderthecompetition&countrieswhereitmightdobusiness.Ifthefirmisready&opportunityexists,thereareseveralmechanismstomakecustomer&partnercontacts.ReadytoGoandConnected:ASynopsis(2of2)Detailedresearchwillrevealmoresources,andincreasethelikelihoodofinternationalsuccess.Findingtherightoverseaspartnermaybemostcrucial.Evenifthisistherightcompany,rightproduct,andpotentialcustomer,thesmallfirmstillneedsawedgetobreakintoanewmarket.Smallfirmscanusetraditionalentrepreneurialwedgestrategies.New-VentureStrategiesfor

SmallMultinationalCompaniesEntryWedge:astrategiccompetitiveadvantageforbreakingintotheestablishedpatternofcommercialactivity:NewProductorServiceandFirstMoverAdvantageCopycatBusinessesNewProductorServiceandFirst-MoverAdvantage(1of2)First-MoverAdvantage:Beingthefirsttointroduceaproductorservice:Productorservicemustbeinnovativeandcomprehensive.Comprehensive:Mustmeetcustomerexpectationsinareassuchaswarranty,customerservice&expectedcomponents.Withoutthese,itseasyforcompetitorstoimitate.Technologicalleadership:beingfirsttouseorintroduceanewtechnology;mostcommonsourceofadvantage;givesaheadstartforfurtherinnovationsNewProductorServiceandFirst-MoverAdvantage(2of2)AdvantagesofbeingFirst-Mover:Havefirstaccesstonaturalandsocialresources.Canchoosethebestlocationsforresources,proximitytocustomersHavethebestaccesstosocialrelationshipsLeadstopersonalcontactstobuildeffectivechannelsofdistribution,&tobuildtrust&commitmentReduceswitchingcostswhichacustomerincurswhengoingtoacompetitor’sproduct(ApplevWindows)CopycatBusinessCopycatBusiness:AdoptsexistingproductsorservicesAcopycatbusinessfollowsthe“metoo”strategy.Competitiveadvantagecomesfromvaryingthenatureofaproductorservice,orhowthefirmprovidestheproductorservice.Successfulcopycatsdonotcopyexistingbusinessidentically.Theyfindanicheorslightinnovationtoattractcustomers.SuccessfulCopycatMovesSuccessfulCopycatmovesincludethese:Bethefirsttochangetoanewstandard.Goafterthetoughestcustomers.Playtominordifferencesincustomerneeds.Transferthelocation.Becomeadedicatedsupplierordistributor.Seekabandonedorignoredmarkets.Acquireexistingbusiness.InternationalEntrepreneurship

(1of4)Entrepreneur:ApersonwhocreatesnewventuresthatseekprofitandgrowthTheentrepreneurfacesrisksandtheuncertaintyofnewanduntestedbusinessNewVentures:existwhen:afirmentersanewmarket,orofferanewproductorservices,orintroducesanewmethod,technologyorinnovativeuseofrawmaterialsInternationalEntrepreneurship

(2of4)InternationalEntrepreneurship:The“discovery,evaluationandexploitationofinternationalmarketopportunities.”Mostexpertsconsiderentrepreneurshipthedrivingforceofsmallbusiness.Withouttheentrepreneur