Global from the Start - the Characteristics of Born-Global Firms in the Technology Sector by Tanew - Article Example

Article Review By Professor Class University City Date of submission Introduction A Critical Review of Tanev S., 2012, ‘Global from the Start: The Characteristics of Born-Global Firms in the Technology Sector’, Technology Innovation Management Review pp. 5-8. Born-global firms are smaller firms with intentions of exploiting the global markets. There are several activities within international markets compared to the local one. Most of these firms are considerably smaller with small financial and resource base of competing sustainably. Most people managing born-global firms view international markets as important of ensuring the business succeeds from such entrepreneurial orientation. Moreover, such firms majorly operate technology related activities, which make them present across several industries. With much competition in the global markets, most firms focus on marketing strategies that would guarantee differentiation in their products. Most born-global firms tend to enjoy the dominance due to the quality of services they offer. The articles the study reveals that the only way of managing the rising needs of the customers, most firms leverage their activities on ICT. Sometimes utilizing local distribution methods might not be suitable for the global market. Hence, most born-global firms integrate other intermediaries to ensure the effectiveness of the applied distribution method (Tanev, 2012, 7). Most born-global firms operate within the technology industry. Most firms engage in international trade due to limited markets within the native countries and positive taste and preference for such products and services at global scale. Creating business ecosystem should be the aim of any born-global. However, attaining such objectives might not be easy considering the changing tastes and preferences of the consumers. Summary The article provided an insight on the firms that are born global. Such firms globalize rapidly from the birth without preceding long-term internationalization period. Most researches established that most firms are currently reaching international levels within a short period. When businesses expand their operations on larger scale to increase the demand for their products and services, they tend to enjoy the benefits associated with such and cheaper input costs. However, some organizations reach global stages fast rather than sharing with the competitors similar markets. According to the articles, most firms first grow within the domestic markets then consider investing in international markets. From the concept presented in the article, born-global firms venture in the markets with an ability to satisfy the needs of the global niche. To explore effectively the international markets, born-global firms begin by exporting their products and services within a short period as they establish connection with other partners operating on global scale. Such rapport would assist in advancing to international level without experiencing challenges. Due less financial base, most of these firms have smaller financial base compared to multinational competitors. Although most studies indicate that born-global firms mainly operate within technological industry, the concept has been able to spread across different sectors. Businesses experience competition at all types of markets irrespective of whether it is international or domestic. However, most managers consider international markets much more than additional markets for their products. These managers consider international markets as opportunities for orienting their entrepreneurial activities. As a result, the aggressive compete and take risks to create competitive advantage that would ensure efficient performance of their businesses. Consequently, such management positions require people with more than just personal qualities but also creativity and knowledge on international markets. International markets draw several forms of competition that small born-global firms have to adjust to. As a result, product and service differentiation plays an important role when the businesses seek to compete sustainably with other multinational organizations. Such marketing strategies would help in simulating the loyalty of the customers through production processes that meet their needs. In most cases, the born-global firms are often on the leading technological advantage within their industries of their operations. As a result, they tend to exploit business opportunities by developing quality and customized products and services to meet the specific needs of the consumers. Operating business activities at international level might be difficult. From such background, the most born-global firms tend to leverage their activities using ICT related processes that allow narrowing of the global market. Moreover, ICT plays an important role in ensuring that these firms communicate their information in an effective and efficient manner to the potential clients. Besides, internationally, most partnering organizations are using technology to discuss matters relating to partnership as well as allowing all the potential customers to access their desired information. Through engaging in international exports, born-global firms tend to leverage their sales of independent intermediaries within the markets in other countries. Therefore, there is need to have external facilities in other countries to facilitate the shipping processes of the products and consequently increasing the flexibility of the firms to either enter or withdraw from the market. According to the article, most born-global firms operate within technology industry. To establish finding, the article made several assumptions. These assumptions include international markets being larger and favorable than local markets, many clients at international level, increased demand of the products and services at global level, operating highly technical sector, and reduced trade barriers (Dow & Melbourne Business School, 2005, 142). Besides, the firms have technical strategies of offering them competitive advantage at global scale and compliant with international standards that determine the tastes and preferences of the consumers. Several environments have increased the growth and internationalization of born-global firms. Moreover, these ecosystems are the backbone that ensures better performance within technology firms. They include university set-ups and businesses operating within an industry since there they encourage easy flow of technological knowledge and platforms of interacting with experienced people. Such interactions offer global competitive advantage. Other ecosystems establish and strengthen the link between domestic and international operations of the firms. Businesses might enjoy opportunities associated with such networking like knowledge from experienced partners. Moreover, networking also establishes an opportunity of interacting directly to the potential customers, which makes it easier to satisfy their specific needs and a method of realizing more investment opportunities (Andersson & Evangelista, 1994, 650). Firms also need to create their ecosystems on the domestic clients and the sales of international subsidiaries. Such ecosystems would help acquire important formation, which are important in ensuring that organizational activities meet the needs of the customers. These ecosystems determine the ability of the firms to succeed in the global market. Furthermore, there is need to create these ecosystems beyond the local clients as such would assist the business secure its clients in an effective manner. Critics of the Article The author, Stoyan Tanew addresses the subject of the article succinctly. Focusing on the characteristic of the born-global firms, Stoyan provides a clear analysis of the changes that new firms have gone through to develop to their recent positions in the market. Basing his argument of technological entrepreneurship, the author outlines the linking components that contribute to the thriving of small firms to emerge to a greater operational rank. However, the author fails to provide a proper impression of the linkage between born-global firms and the entrepreneurship theory. From his definitions, one can is incapable of drafting a clear understanding of the relationship between the theory and the essentials of the operations of the firms. Nevertheless, he creates an opportunity for further research on the role of entrepreneurial theory in the progress of born-global firms. Notably, as much as the author attempts to assert that technology firms that are not born global tend to record higher performances as compared to technological firms that are born global, he does not provide a clear reasoning for his argument. He further contradicts himself by denoting that performance depends on the design principles, which constitute the key corporate attributes to global attainment of operation standards (Coviello, McDougall, & Oviatt, 2011, 628). The contrary opinion leave a researcher or student with the urge to perform further analysis and research to understand, which of the two principles are more important in determining a firm’s success. According to Stoyan, technology firms that are not born global must design and launch outstanding design principles to enable it maintain its technology start-ups. The author does not show a defined methodology for the collection of the data that makes his argument. Nevertheless, the argumentative part of the characteristics constitutes some qualitative information that is likely to provide the essential information about the various born-global firms. For instance, the writer focuses on a study of the international market to extract a comparison between the born-global firms and non born-global firms (Holtbrugge & Wessely, 2009, 115). Using the statistics from Denmark and Australia, the author confirms that the nature of new firm depends on systematic internationalization rather than just internationalize. The author uses this case study taking into consideration other elements such as limited financial and tangible resources, international outlook of the managers and international orientation between the countries, Denmark and Australia. The research design is not the best since it uses the prospects of a case study of a given time to establish a conclusion. An effective conclusion should involve a wide coverage as well as increased timeline to ensure comparison of many variables. Conversely, Stoyan only uses two countries to strike a conclusion of the global outlook of the born-global firms. However, the author uses multiple variables to illustrate his reasoning. To establish an evidence of his work, Stoyan provides the records of the statistics of the countries of study. For instance, he outlines the countries with managers with international look from United States, United Kingdom and so on illustrating the hierarchy. The compositional structure of the article is well planned with heading and sub-headings addressing the various components of the born-global firms. The author uses quite simple language with minimal vocabulary and jerks. The topic of the article is written boldly, creating a visual impression to the writer. In fact, a reader can have a glimpse of the content at a stare. Observably, most sentence structure is formal creating a moral and personal relationship with the readers. Conclusion From the analysis of the article, the research on born-global firms is far from being conclusive considering the amount of assumptions made on the methodology. Since it aimed at pointing out the distinct characteristics of the born-global firms, by assuming certain factors, the obtained result might not be accurate leaving a room for study to be conducted. Besides, each result conducted has different definitions with most definitions drawing the concepts from theoretical work. These concepts provide an opportunity for future studies based on studies that are more empirical. According to the article, interactions play an important role in ensuring the firms provide products and services that meet the actual needs of the clients. However, it failed to consider the ever-changing but determines the tastes and preferences of the consumers. Creating the ecosystems might not be easy as it might involve allocation of resources by the firm. Most born-global firms are seeking investment in international markets due to the numerous opportunities associated with such investment. Due to increased rate of competition, most firms often resort to product and service differentiation to make easier for the consumers to identify their products. Moreover, quality plays a crucial role in creating a competitive advantage. Most managers consider international markets as the foundations of entrepreneurial orientation on global scale with much focus on methods of creating a better competitive advantage. However, such entrepreneurial mindset might lead to implementation of risky businesses strategies that could hurt business operations in the end. References Andersson, S., & Evangelista, F. 1994. The entrepreneur in the Born Global firm in Australia and Sweden. Journal of Small Business and Enterprise Development, 13(4), 642 - 659. Coviello, N. C., McDougall, P. P., & Oviatt, B. M. 2011. The emergence, advance and future of international entrepreneurship research — An introduction to the special forum. Journal of Business Venturing, 26(6), 625–631. Dow, D., & Melbourne Business School. 2005. Do born global firms represent a truly distinct type of organisation? Melbourne: Melbourne Business School. Holtbrugge, D., & Wessely, B. 2009. Initiating forces and success factors of born global firms. European Journal of International Management, 12(5), 112-119. Tanev, S. 2012. Global from the Start: The Characteristics of Born-Global Firms in the Technology Sector. 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