, EXPORT MANAGEMENT
Chapter 8:
8.1 Introduction
Identifying the ‘’right’’ market(s) tot enter, is important because:
It can be a major determinant of success or failure, especially in the early
stages of internationalization.
This decision influences the nature of foreign market programmes in the
selected countries.
The nature of geographic location of selected markets affects the firm’s
ability to coordinate foreign operations.
IMS = International Market Selection
8.2 International market selection: SMEs versus LSEs
The international market selection process is different in:
- Small and medium-sized enterprises (SME’s)
- Large-scale enterprises (LSE’s)
Small and medium-sized enterprises (SME’s)
- Reaction to a stimulus provided by a change agent
- Government agencies, chambers of commerce and other agents may also
bring opportunities to the firm’s attention
In other cases, the IMS of SME’s is based on the following criteria (Johanson and
Vahlne, 1977):
Low psychic distance
Low cultural distance
Low geographic distance
Psychic distance = differences in language, culture, political system, level of
education, industrial development.
Study of internationalisation by Danish SME’s Sylvest and Lindholm (1997):
- IMS process was very different in ‘’old’’ SME’s (before 1960) from that in
‘’young’’ SME’s (1989 or later)
- The young entered more distant markets much earlier then the older ones,
who followed the more traditional step-by-step IMS process.
The reason may be: young SME’s have a status as sub-suppliers to larger firms,
where they are pulled out to international markets by their large customers and
their international networks.
Large-scale enterprises have easies access to product-specific information data in
the form of primary information that is more accurate than any secondary
database.
As a result of this LSE can be more proactive than SME.
Chapter 8:
8.1 Introduction
Identifying the ‘’right’’ market(s) tot enter, is important because:
It can be a major determinant of success or failure, especially in the early
stages of internationalization.
This decision influences the nature of foreign market programmes in the
selected countries.
The nature of geographic location of selected markets affects the firm’s
ability to coordinate foreign operations.
IMS = International Market Selection
8.2 International market selection: SMEs versus LSEs
The international market selection process is different in:
- Small and medium-sized enterprises (SME’s)
- Large-scale enterprises (LSE’s)
Small and medium-sized enterprises (SME’s)
- Reaction to a stimulus provided by a change agent
- Government agencies, chambers of commerce and other agents may also
bring opportunities to the firm’s attention
In other cases, the IMS of SME’s is based on the following criteria (Johanson and
Vahlne, 1977):
Low psychic distance
Low cultural distance
Low geographic distance
Psychic distance = differences in language, culture, political system, level of
education, industrial development.
Study of internationalisation by Danish SME’s Sylvest and Lindholm (1997):
- IMS process was very different in ‘’old’’ SME’s (before 1960) from that in
‘’young’’ SME’s (1989 or later)
- The young entered more distant markets much earlier then the older ones,
who followed the more traditional step-by-step IMS process.
The reason may be: young SME’s have a status as sub-suppliers to larger firms,
where they are pulled out to international markets by their large customers and
their international networks.
Large-scale enterprises have easies access to product-specific information data in
the form of primary information that is more accurate than any secondary
database.
As a result of this LSE can be more proactive than SME.
