International growth strategies of service and manufacturing firms

Abstract

Purpose The purpose of this paper is to examine the differences in growth strategies – domestic and international – of manufacturing and service firms. Hardly any literature exists that empirically investigates the differences on account of the distinctive characteristics of goods and services, and such studies rarely draw from the operations management field. Design/methodology/approach Multiple analysis of variance is used to analyze longitudinal data from multiple secondary sources. Findings Mixed services, such as banks, focus more on domestic growth and less on international growth. Manufacturers, such as chemical firms, focus more on international activities as compared to domestic activities. Mixed service firms seem to prefer collaborative approaches, whereas goods producers prefer wholly owned ventures. Research limitations/implications The data collection methodology applied in this study may be applicable to many other topics of operations management. Future researchers may examine internationalization of services from front and back office perspectives, and compare information‐processing, possession‐processing, and people‐processing services in their choices of mode of entry and resultant performance differences. Practical implications The findings are relevant for developing operations strategy, including location alternatives, for both manufacturing and service firms as different nations become a part of the global village. Appropriate modes of entry in an international arena for both service and manufacturing firms are identified. Originality/value A cross‐functional study that uses longitudinal data from secondary sources in an innovative way with significant implications for operations managers and researchers.

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