Internationalization with Regards to International Marketing - Literature review Example

Born Global Introduction According to Doole internationalization with regards to international marketing implies an ongoing learning process or an engagement in the international market as the only way through which a business can remain competitive. However, Bradley (2009) insists there have been transformations of conditions of the global business and exponential transformations in business communication. These factors have led to recent propositions that companies are avoiding the traditional incremental techniques of exporting and commencing exportations from the initial days of a company. Generally, gradual Internationalization is extinct. These internationalizing companies are considered a new kind of exporting companies that no longer conform to the incremental stage theory models (Glowik & Smyczek, 2011, p.44). One key factor used in the description of this phenomenon is the ‘Born Global.’ Evaluation/Discussion What Is A Born Global? According to ANZAM (2009), a born global company can be defined as an organization that, from beginning, seeks to obtain considerable competitive advantage resource utilization and sale of produce in multiple nations. Mellahi (2014) comments that most firms go global, however that does not indicate that they are born global firms. Generally, what differentiates born global companies from the rest of international companies is that they have an international origin. Born global firms, right for their commencement, have a worldwide focus and entrust their resources to global ventures. Most firms operate in their home nation, and after domestically carrying out business for years, they slowly begin focusing on international business. In contrast, born global businesses commence with a borderless global view, and without delay develop strategies to help themselves expand abroad. Born global businesses have several distinctive characteristics that let them begin, and prosper in the global arena.  One way through which born global businesses commence internationally is by depending on exportations as their key technique for foreign market penetration. Such businesses begin by exporting their goods within some few years after their formation, and can even export a quarter or even more of their entire production (Gandhi & Davies, 2014, p.15). Therefore, born global businesses must depend on external facilitators to help them sort out international shipments. Through the external facilitators, born global firms quickly and easily penetrate or withdraw from international markets. Born global businesses also have a distinctive way of doing business transactions. Born global’s top management tend from the start consider the globe their marketplace. They apply their aggressive entrepreneurial approaches in the immediate pursue of international markets. Additionally, born global mindsets use differentiation strategies when forming their markets. This helps them in ensuring an international niche for them. Further, born global companies can provide customized and specialized products. This is because they have specialized resources (Dewan & Sudarshan, 2010, p.132). Therefore, they can easily satisfy a very small market to interest larger companies. Suarez and Ritah (2012) further imply that born global goods are not only specialized, but they also endeavor for better product quality. In many instances, born global firms technologically lead their industries. This advantage not only allow them to pursue markets globally, but also allow them provide superior products intended for the specialized markets they have formed gaps out of. Transferability of Concept In the past two decades, the phenomenon ‘Born Global’ has progressed into an interesting internationalization studies’ field. Studies have been done on numerous perspectives so as to enrich this new field of business research (Cavusgil & Knight, 2009, p.6). Despite that, researchers have not done much in determining the economies under which these firms emerge, and the impact of innovations in this emergence. More especially, inadequate amounts of literary works cover the concept of born global from the context of emerging market. Cavusgil and Knight (2009) affirm that innovation plays a vital role in the creation of born global firm. They also illustrate the concept transferability process. Often, the main innovation is formulated prior to the founding of such firms and becomes the basis for their establishment. After the firm’s foundation, innovation keeps on playing the central role in the transfer of concept, despite of the nature of the environment in which the company competes. The presence of these firms in diverse industry sectors, be it high tech, non tech, or low tech, suggests that they ought to be innovative in both non-technological and technological sectors. Further, Tanev (2012) implies that when born global firms undergo early internationalization; their innovativeness gets affected in terms of the materialization and implementation of their definite marketing strategies. It would be important that a firm exhibits the capacity to innovate, acclimatize, or reinvent its strategies in marketing. This aims to suit local markets, with the intention of ensuring they are able to compete against incumbents in numerous foreign countries. In addition, the competitive advantage of a firm in an international market is maintained via the utilization of definite isolation mechanisms. These mechanisms are ways through which firms segregate themselves from competitors on various levels. Innovation is one key way to build up an isolation mechanism (Doole, I. (2012, p. 33). Therefore, through innovation, networking abilities and knowledge acquisition are necessary in the acquisition of a competitive advantage and transferability of the born global concept. Examples of Born Global Firms Currently, many medium and small-sized firms are initiating themselves as global businesses right from their commencement and are becoming successful. The idea of a firm first establishing locally before making an effort to penetrate the international market is being abolished. Some of such firms even begin as international organizations. A few examples of such medium and small-sized firms include Colormatic, Opera Software, Optoflow, and IRTech. Other global companies include Standard Chartered Bank, Burger king, Citi Bank, Tesco, pPizza hut, HSBC, Thorntons asda, Walmart, McDonalds boots, Grindlays, Seagate etc.  Internationalization Gokmen & Temiz (2013) and Cannone et al (2012) comment that Drivers and barriers linked to the internationalization of born global firms falls into two groups. The first are the drivers and barriers associated with specific features of open economies, and specific issues like credibility, distance from main markets, inadequate government support, economic reform, and limited local capital availability. The key driver for global extension is to attain growth, and ultimately profitability out of the restricted local market. Group number two is linked to specific factors of a firm. Such factors include knowledge and abilities, utilization of niche strategies, financial resources, accessibility to business collaborations and networks, pre-export readiness, and management attitudes. Generally, Cannone et al (2012) further asserts that the barriers and drivers to internationalization vary considerably from one firm to another. Some of the most frequently mentioned drivers to internationalization include technology and innovation, alliances and partnerships, networks, and skills, capabilities and knowledge. Other positive influences are firms’ elements related to marketing, market opportunities, market research, and brand/design. Specific company capability influences comprise niche focus inputs’ quality, acquisitions, and scale/scope. In contrast, almost all negative or unfavorable impacts are exogenous. The most often cited include the small size markets, capital constraints, debt costs, costs of operating business abroad, foreign exchange rates, trade quotas and restrictions, and international competition. Other exogenous aspects relate to exclusion of government incentives or support, change, and market volatility (Zain & Abdullah, 2011, p.319). One firm’s termination can be related to endogenous aspects; however, these factors are in most instances disgustingly underreported as explanations for failure globally. Standardization/Adaptation Standardization, with regards to internationalization, denotes that a firm will transact in the international market, the precise same service or product it transacts in its individual market. Therefore, the key standardization target for a firm is to ensure minimization of costs through the economies of scale process (Timonen, 2012, p.31). This process, as Richter (2012) explains, can be on a whole production chain the same way it can be on an exact part of a marketing mix such as the product, the packaging, the design or the distribution development. In some instances, it may be important for a firm to standardize. This apart from helping in reduction of costs of operation also allows a firm to considerably reduce risks while entering a foreign market, which in most cases is unknown. Further, standardization according to Fuerst (2010) deals a lot with the needs and desires of a consumer. The technological evolution, which has been improved by the current modes of communication, has created a certain combination of needs of consumers worldwide. Standardization has therefore become the most appropriate strategy that companies can use in selling their products in the international market. Firms no longer put much focus on targeting consumers in various nations; rather they target various segments in the whole world (Marinov & Marinova, 2012, p.173). For example, a firm can target teenagers within some nations such as USA and Europe since they exhibit similar needs and influences. The film industry, for instance, perfectly demonstrates this process with particular movies, which target only the teenagers, be they French, American, Spanish or English. The movie and the marketing also target a similar segment in various nations. Therefore, the fact that firms go international by choosing a standardization strategy definitely simplifies their internationalization. Reason being, a firm will use the same service or product in all its foreign markets in addition to its local market. Unlike standardization strategy, adaptation strategy implies a change in the operations of a firm while penetrating new global markets (Timonen, 2012, p.33). Different factors drive adaptation. Such factors may include the host nation’s infrastructure. Timonen (2012) implies that firms employ the adaptation approach so that they can sell their services and products to populations with diverse cultural styles. Application of the adaptation strategy enable a firm obtain higher revenue through convincing more consumers who often exhibit dissimilar needs and desires from the firm’s local market’s consumers. In addition, it is of significance to affirm that adaptation strategy may at times be more expensive compared to the standardization strategy. However, the key significant detail is that the information and knowledge gained by the firm in the international market ought to ensure that the firm recognizes consumers’ real need, thereby replying to the need through offering appropriate services or products. Thus, Fuerst (2010) comments that adapting firms must strive to not only acquire financial requirements but also have the knowledge about the key needs of the consumers in the host nation. The firm should particularly have the aptitude of responding to these desires through obtaining the needed resources that can help them achieve this. Researchers, for instance, specify that individuals have different response to a foreign product or advertisement. Therefore, cultural distance is a major factor that impels adaptation. Moreover, considering the fact that standardization has less risks, firms that opt for adaptation are in most cases not sure to achieve the anticipated impact on customers. Therefore, adaptation involves some risk level to a firm. Additionally, the choice of the mode of penetration has a noteworthy effect on internationalization strategy, particularly. Globalization Currently, the world can be affirmed to be a globalized village where firms have to be intelligent when considering the choice of internationalization strategy. Certainly, the past years have experienced world transformation. The world has transformed from terrorizing situations with two severe world wars to a world where certain trade barriers were abolished. Populations in the world are now linked in a manner they had never been linked before. Firms do not target their local market anymore, but tend to focus much on and target the international markets. The globalization does not just focus on the selling section of a firm; it also comprises production portion and sourcing (Baum, Sui & Yu, 2013, p.67). The globalization has created common needs and desires amid populations in the globe. This has made it easier for the firms and has given the firms the opportunity to no longer focus on targeting consumers by nations but by sections that assemble people from various nations with similar needs. This tendency has been evident so much in the current world such that it develops a whole different category of firms that benefit from an international range, immediately they commence their operations (Donald, 2011, p.333); the commonly known “Born Global” firms. Conclusion In summary, born global firms can be considered to be of special interest because of the age under which these firms venture into international markets and not because of their sizes or any other reason. Tielmann (2010), for instance, affirms that born global companies are completely unique from other key international companies since they are founded with the aim of doing international businesses. In other words, larger companies operate for years before they begin considering the possibilities of operating at the international level unlike born global companies that are formed with the intention of operating internationally. In addition, for companies that wish to penetrate the global market, it would be important for them to consider the world a single borderless global market place just like the born global firms. With this view, a company is bound to thrive in the worldwide market. References ANZAM (2009). Defining the Born Global Firm. Available at: [Accessed 8th March 2015] Baum, M., Sui, S., & Yu, Z. (2013). Resource differences between Born Global and Born Regional firms: Evidence from Canadian Medium and small-sized Manufacturers 1997-2004. 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