Internationalization of small, computer software firms

Øystein Moen · Morten Gavlen · Iver Endresen

144 citations0/0 files storedEuropean Journal of Marketing

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International Business and FDI Innovation and Knowledge Management International Student and Expatriate Challenges

Abstract

Internationalization has often been described as a gradual development, in terms of involvement and entry forms, in which firms are expected to target gradually more distant markets. This study focuses on the entry forms and market selection of five small Norwegian computer software firms. The findings suggest that the firm's network relationships are determinant with regard to which foreign entry forms they choose and to some extent, which markets they decide to enter. Whereas terms such as agent, distributor, licensee, and foreign subsidiary might have clear distinguishing power when physical products are concerned, the picture is far more complex when it comes to software. The firms in the study generally refer to their international partners as agents or distributors or both. When examined more closely a complex pattern of business solutions are encompassed by these terms. It seems also evident that the firms in the study are not concerned with such a distinction but look for competency, solidity and the ability to generate sales when searching for international partners. There seems to be a limited correlation between the firms’ international experience and their foreign entry form and market selection. The firm may choose one entry form in one market and a different one in another similar market, depending very much upon the options available in terms of their network relationships. Some key challenges for the managers of a software company will be to balance the allocation of resources between expanding the network through the current relationships and to focus on establishing new relationships and customers. This study's results illustrate the increasingly complex relationship between firms across national borders.

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References

1977The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments 1966International Investment and International Trade in the Product Cycle 1994Toward a Theory of International New ventures 1975THE INTERNATIONALIZATION OF THE FIRM ? FOUR SWEDISH CASES 1990The Mechanism of Internationalisation 1994Explaining the formation of international new ventures: The limits of theories from international business research 1977The Export Behavior of Smaller-Sized Wisconsin Manufacturing Firms 1997Network relationships and the internationalisation process of small software firms

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