Database Management Systems Ramakrishnan (Raghu Ramakrishnan)

is a mediated impact, as the entrepreneur’s mindset
vis-à-vis opportunity influences the strategic options
for international market development. The combined
impact of push and pull forces is also intermediated
by the firm’s assessment of its resources and
capabilities at inception – in the case of new high-tech
firms it is the entrepreneur as key decision-maker and
a core mediating force who leads to a decision to
internationalise the new venture. The entrepreneur’s
mental model and mindset act as the mediating forces
at play with push and pull factors. The entrepreneur’s
perception of their external environment also impacts
on the mindset in international decision-making, and
their characteristics are particularly relevant for
deciding to internationalise (Evers, 2010). This is
discussed in the following section.

11.6 STRATEGIC OPTIONS FOR
INTERNATIONAL MARKET
DEVELOPMENT

When an entrepreneur decides to internationalise their
innovation in foreign markets, a plan for building an
international strategy needs to be mapped out. High-
tech sectors are highly globally driven industries,
responsive to rapid technological developments
resulting in short product life cycles and time frames
in which to enter the market. A new venture must
consider a global strategy, even if its initial strategy is
to remain local. An international strategy involves
transferring product capabilities and the business
model from the home market to foreign markets as a
means to seek out ways of generating revenues from
foreign markets to expand and grow the venture, as
well as maximising the economic and associated value
potential that the firm can add to its business.

As shown in Figure 11.2, Solberg (1997) suggests
nine strategic options that an organisation can choose
from. As high-tech ventures would typically be in the
early and growth stages of the firm life cycle, they
would typically fall into Windows 1, 4 and 7 in Figure
11.2. As discussed earlier, high-tech industries tend to
experience a high degree of industry globalisation and
many high-tech ventures enter international markets
by default. For example, as shown in Case Box 11.2,
the medical device industry is highly globalised and
thus many medical technology ventures from small
economies would could opt for Window 4, targeting
global market niches early in the life cycle, or prepare
for global buy-out (Window 7).

Figure 11.2 The nine strategic windows
Source: Solberg (1997). Reprinted with permission from SAGE
Publications.

CASE BOX 11.2 THE GLOBAL INTEGRATION
OF THE MEDTECH SECTOR

Life sciences, which broadly comprise the medtech,
pharmaceuticals and biotechnology sub-sectors, is a high-

technology industry. The need to amortise high R&D costs
provides a strong incentive, especially in medtech new ventures,
to scale from smaller domestic markets to larger international
markets quickly. Medtech products are often not culture specific
and need minimal local adaptation, which makes
internationalisation more favourable and less cumbersome
(Andersson et al., 2014).

The medtech sector is globally connected through MNCs and is
also highly populated by rapidly internationalising small and
medium-sized enterprises (SMEs; Weigel, 2011). SMEs
represent 80 per cent of Europe’s medical device firms and have
emerged as the powerhouse of innovation in Europe (European
Commission, 2006, p. 5).

However, the medtech sector is highly regulated and its occupant
firms are regularly exposed to factors that can both incentivise
and restrain their international activities. For example, medtech
firms are hampered by initial high costs of R&D, forcing early
internationalisation to recuperate costs and gain first-mover
advantage in their technologies. Foreign market entry can also
be restricted by highly complex and diverse national regulatory
systems. Such complexity involves different funding systems,
national market regulation, distributions systems and many
stakeholders in the sector influencing procurement decisions. For
example, product regulations differ from one country to another,
leading to expensive and complicated product compliance across
diverse regulatory landscapes, with no certainty of product
acceptance by the targeted foreign market. To enter European
markets medtech products need European CE product
compliance, and in the United States they require Food and Drug
Administration clearance, based on clinical trials and other
quality-related issues. These factors make an international
product launch a complex endeavour, including difficulties in
scaling up marketing and sales, expensive and difficult clinical
trials, regulatory demands, gaining access to medical
professionals and financing the complete R&D process (Laurell
et al., 2017). Many SMEs try to mitigate against such regulatory
and cost pressures by partnering with, licensing technology from
or being acquired by larger MNCs that already have an
established international market base.

11.6.1 Determining the Scope of International
Market Activities

In general, a new or growing tech venture must select
which international strategy it wishes to pursue. Lynch
(1994) identifies five territorial scopes a firm can

choose from, developing from a local market
operation to various scales of international market
coverage. The firm can evolve in geographic scope, as
illustrated in Table 11.1. Each route can incrementally
lead into the next one or, depending on the strategic
option, a born global venture can simply skip one or
more and operate at a global scale.5

11.7 SELECTING WHICH FOREIGN
MARKETS TO ENTER AND
SEGMENTS TO SERVE

A key question for the entrepreneur is: “Which
foreign markets should I pursue and what are the
potential customers to target with my technology?”
Entrepreneurs can target customer segments with their
technologies in a foreign market. However, selling the
same product into new foreign markets is a complex
process, requiring a large amount of market research.
In other words, the approach firms take for market
validation in domestic markets is based on the same
principles for new markets with different economic,
regulatory and customer landscapes. Some of the key
factors that need to be considered that differentiate
domestic and foreign markets are shown in Figure
11.3.

Table 11.1 Scope of international activities and geographic
coverage

Geographic Description of activities
scope

Local Organisations supply to local markets and within
National national boundaries where markets are large
enough to sustain business growth.

Organisations supply into domestic markets but
may engage in sporadic foreign sales through
unsolicited customer enquiries and orders.

Regional Organisations develop markets beyond their
Continental domestic market, such as in neighbouring
Global regions or states, e.g. a US firm moving into
Canada; or in countries neighbouring their own
market as a national extension of their market,
e.g. an Irish firm extending to the UK or a
French firm developing its Spanish customer
base and incrementally entering other European
markets.

Organisations develop markets actively
throughout the continent they reside in. For
example, many European-based organisations
choose to develop markets actively in European
countries. They may also re-locate some of their
operations to European countries where it is
more optimal for their business.

Organisations with an already strong base can
develop into other continents as part of their
international market expansion activities. Many
high-tech ventures operate from inception to be
globally market focused by the very nature of
their product and the sector they operate in.
These are more commonly known as born
globals.

These factors include macro factors such as
language, social and cultural factors, market
structures, customer and buyer needs, political
economy, competitive landscape, economic product
regulations and legal requirements and technological
infrastructures. Figure 11.3 illustrates such factors as
uncontrollable, which can necessitate firms
identifying opportunities, adapting to the foreign
environment and addressing challenges in new foreign
markets. Entrepreneurs can adopt a geocentric
approach to international market development by
seeking out and serving global segments of customers.
This can enable them to operate within their capacity
while helping to grow the business, specifically by

increasing the international business experience of
operating a global venture.

11.7.1 Factors Influencing Foreign Market
Selection

The next step for the entrepreneur is to decide which
foreign markets to pursue. This process involves
assessing foreign market potential and selecting target
markets or segments within these foreign markets into
which it can deliver its innovation. In determining
which foreign market to enter, there are 11 key factors
(Baines et al., 2011) that must be considered to assess
foreign market potential and target market
attractiveness:

Figure 11.3 External analysis of foreign markets

1. Assessment of current segment size and growth
potential.

2. Industry and competitive analysis in target
segment.

3. Pace of adoption in different markets, e.g. diffusion
of innovation in developing economies can

indicate a faster pace of adoption.

4. Assessment of company sales potential.

5. Ability to develop a competitive advantage in
target segment. (See Chapter 6 and Section 11.10
in this chapter.)

6. Psychic distance between home and target foreign
market (i.e. cultural and institutional knowledge of
doing business).

7. Costs and risks associated with operating in target
segments.

8. Ability to overcome trade and government
restrictions and product regulatory requirements.

9. Operational feasibility in accessing and delivering
to customers in target segments.

10.Entrepreneur’s experiential knowledge of the
foreign market, resource availability and
investment required.

11. Networks and contacts with access to the foreign
market and/or potential to develop networks in a
foreign market.

In terms of foreign market segmentation, the same
principles and methods outlined in Chapter 8 used to
segment and target foreign customers apply, yet with a
higher degree of information required and costs
associated with time spent researching foreign
markets. As well as secondary desk research (see
Chapter 7), government or state agencies and industry
networks can be valuable sources of market research
and information. Leveraging and exhausting all
channels of information form a critical part of
screening each of the above factors to determine the
overall foreign market potential and segment

attractiveness. Foreign market selection is a critical
decision for the venture, particularly if the
entrepreneur has no or limited international
experience. Time and costs can be wasted if this
process is not conducted rigorously and there may be
missed opportunities if this process is not done at all.

11.7.2 Standardisation and Adaptation of the
Marketing Programme

Internationalising high-tech ventures must then decide
to what extent they need to adapt (customise) their
marketing strategy to local conditions and diverse
needs across foreign customer segments.

As shown in Figure 11.4, at one extreme are
companies that use a globally standardised marketing
programme worldwide. (The components of the
marketing programme are discussed in Chapter 8.)
Standardisation of the product, advertising and
distribution channels promises the lowest costs. At the
other extreme is a localised or adapted marketing mix,
where the producer adjusts the marketing mix
elements (see Chapter 8) to each foreign target
market.

Between the two extremes are hybrid options
where the venture adopts a globalised marketing
strategy, standardising its marketing programme
where possible and adapting its programmes to
foreign local environments and customers when
necessary. For example, a high-tech venture offering
technical services over the internet may customise its
webpages for its foreign markets. Promotional
materials may have to be translated into the language
of the foreign market. Similarly, operating across
diverse regulatory markets means that technology
products need to be compliant to gain market

acceptance, as well as fitting with customer needs
irrespective of foreign territory (Case Box 11.3).

Figure 11.4 Standardisation and adaptation in international
marketing programmes

CASE BOX 11.3 POCKET ANATOMY

Case written by Michelle O’Connell
Pocket Anatomy (www.pocketanatomy.com) was initially
established in 2006 as a service company providing high-quality
3D animations to the medical devices sector. In 2009, Pocket
Anatomy entered the Apple App Store with the launch of Pocket
Heart, a 3D medical application that promotes anatomical
understanding of the heart through its visualisation, along with
quizzes and clinical cases. With over a million users on IOS, it
became available on Android in 2017. Since the introduction of
Pocket Heart in 2009, Pocket Anatomy has gone on to develop
an extended range of medical anatomy software apps. The apps
were initially developed with medical students in mind; however,
an increasing number of groups and individuals are showing an
interest in them, including healthcare professionals (doctors,
nurses, emergency medical technicians), complementary
therapists (yoga, acupuncture, massage) and people with a
general interest in healthcare.
Adapting to Global Markets
As a developer of mobile software solutions, Pocket Anatomy
has relied solely on the internet, and in particular the Apple App
Store, to enter into foreign markets. The apps produced by
Pocket Anatomy are potentially available in all of the countries
worldwide, providing them with access to a huge number of
prospective clients. Currently the apps are only available in the
English language. However, Pocket Anatomy acknowledges that
translation and localisation are the next step in the distribution

process and is addressing this challenge by working on providing
market-specific product solutions. It has identified a number of
countries in which there is a potentially high demand for its
products in local languages, including France, China, Brazil and
Japan. In order to fully penetrate these potentially valuable
markets, Pocket Anatomy will have to adapt certain elements of
its product, language being the main element. The core product
will essentially remain the same in all countries; however, it will
be adapted to fit with local needs. Iconography, colour schemes
and cultural sensitivities will all have to be considered alongside
the adaptation of language to regional considerations. The Apple
App Store provides Pocket Anatomy with a relatively low-risk and
low-cost entry mode into international markets. Though not
without its challenges and individual nuances, this distribution
channel offers Pocket Anatomy access to potentially hundreds of
millions of new customers across the globe.

11.8 DECIDING ON FOREIGN MARKET
ENTRY STRATEGIES (MODES)

A foreign market entry strategy or mode is the
channel or institutional arrangement that an
organisation employs to gain entry to a new
international market. High-tech organisations that are
expanding into international markets can choose from
a number of different entry strategies. These are
dependent on the risks they are willing to take, and the
rewards they wish to obtain. The higher the risk an
organisation is willing to take, the higher the potential
rewards. There are five key modes of foreign market
entry (as depicted in Figure 11.5 and detailed in Table
11.2): the internet, exporting, licensing, joint
venturing and direct investment. Each succeeding
strategy involves more commitment and risk, but also
more control and higher potential profits. Figure 11.5
identifies and defines some of the key foreign market
entry modes available to high-tech firms (see also
Hollensen, 2017).

Figure 11.5 Foreign market entry strategies for high-tech
ventures

Table 11.2 illustrates the advantages and
disadvantages of each entry mode, as well as giving
examples of companies that have successfully used
these different modes to enter foreign markets.1

The foreign market venture may choose one or a
combination of ways to enter a new regional or
national market outside its own. For technology
products, exporting is a common method for new
ventures. Also, licensing is a useful and less resource-
intensive way of generating revenue from foreign
customers. It is inexpensive and allows the licensee to
look after the manifesting and marketing of the
technology in the new market in return for royalty
payments to the inventor. The internet has emerged as
a highly cost-effective and low-risk entry mode for
information-based products and services that can
easily be sold and distributed. It has immediate
geographical reach, requiring adaptation of the
company website for large-growth markets, for
instance the Chinese market would require a website
in Mandarin, South American markets would need
websites in Spanish or Portuguese, as appropriate.

Another entry strategy that small firms use to
initially enter a foreign market is through the more
traditional mode of exporting. The company may
passively export its surpluses from time to time, or it
may make an active commitment to expand exports to
a particular market. In either case, the company

produces all of its goods in its home country. It may or
may not modify them for the export market. Exporting
involves the least change in the company’s product
lines, organisation, investments and mission. The
venture can sell directly to customers or alternatively
use foreign-based agents or/and distributors.

Agents are individuals or organisations who are
contracted to your business and market on your behalf
in a foreign market. They rarely take ownership of
products and act as an external sales agent, taking a
commission on goods sold. Agents usually represent
more than one organisation. They are a low-cost, but
low-control, option. Agents might also represent your
competitors – so beware of conflicts of interest. A key
decision for the venture is finding the right agent.
They tend to be expensive to recruit, retain and train if
dealing in customised technologies. Distributors are
similar to customers in that they take ownership and
title of the products. Therefore, they have an incentive
to market products and to make a profit from them.

Table 11.2 Summary of foreign market entry strategies

A foreign market can also be penetrated through
joint venturing and strategic alliances – joining with
foreign companies to produce or market products or
services. Unlike strategic alliances, a joint venture is

an equity-based partnership. It differs from exporting
in that the company joins with a host country partner
to market technologies in the host foreign market
where the partners reside. It differs from direct
investment in that an association is formed with
someone in the foreign market. Joint ventures to
partner with indigenous Chinese firms are very much
favoured by the Chinese government. Equally, as
enforcement of intellectual property laws is
problematic in China, foreign firms consider it an
effective strategy to enter and exploit opportunities in
China. The largest resource commitment to a foreign
market is through foreign direct investment – through
a sales office or subsidiaries. If a company has gained
experience in exporting and if the foreign market is
large enough, locating foreign facilities offers many
advantages. Generally, a firm develops a deeper
relationship with the government, customers, local
suppliers and distributors, allowing it to adapt its
products to the local market better. Finally, the firm
keeps full control over the investment and therefore
can develop manufacturing and marketing policies
that serve its long-term international marketing
objectives. The main disadvantage of direct
investment is that the firm faces many risks, such as
restricted or devalued currencies, falling markets or
government changes.

11.8.1 Factors Influencing the Choice of Entry
Mode

The choice of entry mode will be determined by a
number of factors. The key factors can be divided into
internal factors and external factors. Both are
discussed below.

11.8.2 Internal Factors

Firm Size: The size of an organisation indicates the
resources it has available: larger firms will usually
have more resources available to them than smaller
firms. An increase in resource availability provides
organisations with the opportunity to increase their
international business over time. SMEs are likely to
enter foreign markets using export modes, as they do
not have the resources available to utilise entry modes
that would give them more control. As larger firms
often have more resources available, hierarchical
modes are used when internationalising.

International Experience: International experience
refers to the level of experience a firm has in
operating in foreign markets. For example, the firm
itself may have experience operating in international
markets, or managers may have previous experience
working in foreign countries. Organisations with
international experience will be in a position to enter
foreign markets with more certainty than firms with
no international experience. International experience
also reduces the costs and risks of entering foreign
markets. Firms with international experience favour
direct investments in the form of hierarchical entry
modes, such as wholly owned subsidiaries.

Product/Service Characteristics: The physical
traits of a product or service, such as perishability,
influence where the production area is situated, and
therefore the choice of entry mode. Products such as
soft drinks and alcoholic drinks often use licensing
agreements to enter foreign markets as the cost of
shipping to these markets is expensive. The
complexity of a product also plays a role in choosing a
foreign market entry strategy. Products with a high
level of complexity, such as technical products, may

require service before and after the actual sale. The
sales representatives must have a good knowledge of
the product and, as a result, hierarchical modes are
used in which the organisation owns and controls its
foreign-based organisation. In the case of services,
where production and consumption cannot be
separated, the organisation must be present in the
foreign market from the beginning in order to interact
with its customers. Hierarchical entry modes are
advisable in this situation also, since the organisation
requires a high level of control.

11.8.3 External Factors

Sociocultural Distance between Home Country and
Foreign Market: Countries that are socio-culturally
distant do not have similar business and industry
practices; they speak a different language and have
very different cultural traits. For example, China is
socio-culturally distant to Ireland, as there are
language barriers, cultural differences and different
business practices at play. When entering a market
that is socio-culturally distant from the home country,
uncertainties may arise in relation to local business
practices. Consequently, the level of perceived risk
may be higher. Low-risk entry modes, such as agents
and importers or joint ventures, are preferred when
there is a large perceived distance between the home
country and the foreign market. These methods
provide the home country with local knowledge of the
foreign market, thus reducing the perceived level of
uncertainty.

Country Risk/Demand Uncertainty: Foreign
markets are often perceived as riskier than the home
market. When entering foreign markets organisations
may encounter both economic and political risks.

When there are high economic or political risks
associated with entering a particular foreign market,
organisations will not want to commit many resources
to that country. Therefore, export modes, which
require little resource commitment, are advisable.

Market Size and Growth: The size of a foreign
market and the rate at which the market is growing
play an important role in choosing an entry mode. For
countries with a large market that is experiencing high
levels of growth, a high level of commitment and
resources is required. Wholly owned sales subsidiaries
or a majority-owned joint venture are advisable in this
case. Smaller countries with smaller markets require
less commitment and resources and may be served
through licensing agreements or exporting.

Direct and Indirect Trade Barriers: Many
countries place tariffs and quotas on the import of
foreign goods. In order to overcome these barriers,
firms wishing to enter such foreign markets often
favour the creation of local production facilities.
Tendencies for foreign countries to “buy local”
encourage the home country to set up joint ventures
with local organisations. Such joint ventures can
ensure that the organisation has a local image and that
locals would be more likely to buy these products.

Intensity of Competition: If the level of competition
in a foreign market is high, the market will be less
profitable and organisations are advised not to
internationalise. If an organisation still wishes to enter
a saturated market, export modes are often used as
they require few resource commitments.

11.9 GROWING INTERNATIONAL
SALES THROUGH NETWORKS

Earlier chapters (6 and 7) introduced the role of
networks as part of firm’s value network. Here we
examine the role of networks as a critical mechanism
for international sales development and growth.
Networks have become particularly important in the
initial and growth stages of international new
ventures. Prior studies have indicated that the
international growth and expansion of ventures have
relied on leveraging the needed foreign market
knowledge and resources through their respective
network relationships (e.g. Ryan et al., 2019; Ojala et
al., 2018; Evers and O’Gorman, 2011). At the same
time, without the firm’s managerial proactiveness in
mobilising its networks for resources, international
growth and market expansion would be deemed
problematic (see later Figure 11.6).

Business networks usually consist of social and
business relationships across vertical and horizontal
actors (see Chapter 6, Figure 6.3, “Network
typology”), such as customers, suppliers, competitors,
trade associations, export promotion agencies and
other public and private actors operating within the
industry (e.g. Axelsson and Easton, 1992; Ryan et al.,
2019; Evers and O’Gorman, 2011). The motives for
such relationship building across a wide spectrum of
actors and prospective partners within the same
industry context are crucial tangible resources, such as
finance and production facilities, and intangible
resources, such as foreign market knowledge,
opportunity identification, know-how, legitimacy and
experience, which can be channelled through industry
network actors. If leveraged well, the role of
government and state agencies has been found to
serve as an important source of knowledge and
legitimacy for new ventures in their

internationalisation process (Ahmed and Brennan,
2019; Ryan et al., 2019; O’Gorman and Evers, 2011).

Figure 11.6 Strategic attributes for developing and sustaining
international competitiveness in international new ventures
Source: Evers (2011) Journal of Small Business and Enterprise
Development. © Emerald Publishing Limited, all rights reserved.
Reprinted with permission.

However, the personal and social nature of forming
and building relationships indicates that networks do
not necessarily emerge in a virtual space where spatial
proximity does not matter. Rather, spatial proximity is
important for the development of network
relationships (Evers and Knight, 2008). The next
section looks at trade shows as an important
networking node or forum for establishing and
developing fundamental connections to facilitate early
international internationalisation.

CASE BOX 11.4 EX ORDO: DEVELOPING
GLOBAL SALES THROUGH TRADE SHOWS

AND PARTNERSHIPS

Case written by Brian Campbell, International Marketing
Manager, Ex Ordo Ltd.

Ex Ordo Ltd (www.exordo.com) was established in 2011 when
electronic and computer engineering student Paul Killoran was
helping his university supervisor organise a research conference.
Killoran developed a system to help manage the conference’s
peer review process. From there the three founders, Killoran,
Dermot Lally and Mike Rockall, began building Ex Ordo and
based it out of their home city of Galway in Ireland. From the
start, the company had a vision of making the go-to software for
managing a research conference, so it added a registration
product and a conference programme builder, and established a
strategic partnership for a mobile app. Ex Ordo began life with a
core focus on universities organising academic conferences;
however, an increasing number of scholarly associations (e.g.
Decision Science Institute and the European Space Agency) and
professional conference organisers began using the software for
their conferences. Determined on building a completely reliable
product, the company began a controlled global expansion.
Today, conferences in over 60 countries have used Ex Ordo and
in the first six months of 2019, researchers from 200+ countries
submitted abstracts to conferences using Ex Ordo.

There are hundreds of thousands of research conferences
organised annually and many of these need dynamic software to
manage the peer review process. It was clear from the outset
that the Irish domestic market was not large enough, and the
company instead focused on the internet as a foreign market
entry mode to build its international sales. A strong digital
marketing and content strategy gave the company the ability to
penetrate global markets quickly and efficiently using a relatively
low-cost and low-risk strategy. From inception, it was clear to Ex
Ordo that it would be adopting a global sales strategy. A
determinant of this is the fact that the software is cloud-based, so
while universities in the United States are using it, research
associations in Australia can do the same, all while the
operations are based in Ireland. This, along with the universal
language of science being English, enabled the company to
standardise the software around the world with minimal
adaptation, thus generating economies of scale and a low-cost
implementation base. A centralised global customer support
base was set up at headquarters. To date Ex Ordo has worked
with 13 of the top 20 universities in the world and has guided
over 500,000 researchers through the peer review process.

With Ex Ordo’s specific target market, it was clear that value
networks have a key role to play, and for the company to
continue its growth it needed to develop relationships within its

market. Along with utilising the internet for global growth and a
strong referral strategy, the company also placed an emphasis
on a number of other international growth strategies.

International Trade Shows: Having a global view on the market
means that you need to build and develop an international
reputation. A great way to do this is to exhibit at trade shows
attended by the thought leaders in your target market. Trade
shows presented Ex Ordo with a fantastic opportunity to present
its software to industry members and to network and build
relationships with potential buyers, building credibility. In April
2019 Ex Ordo attended the Association World Congress, and
over the course of three days generated leads, significantly
strengthened its relationship with its mobile app supplier and
made several long-lasting relationships with potential C-suite
buyers.

International Partnerships: Since Ex Ordo positions itself as the
thought leader in the peer review software field, it felt it needed
partners who both matched its vision for the marketplace and
provided a premium product. A great example of this is
Guidebook, a Silicon Valley-based company that is a market
leader in mobile event app technology. Guidebook’s innovative,
high-quality apps and long-established growth in the marketplace
matched Ex Ordo’s desires and ambitions. An official partnership
with Guidebook – Ex Ordo’s first – ensured Ex Ordo’s resources
were not expended on developing its own mobile app and gave it
access to Guidebook’s global customer base.

The digitalised nature of the product launched the nascent
company rapidly onto international markets with the internet as a
natural export entry platform. From here the company started
gathering an international brand presence and through active
participation in trade shows established brand credibility.
Subsequent international partnerships with technology firms
helped Ex Ordo to develop an international reputation and brand
credibility, leading sales growth. Taken together, these qualities
enable Ex Ordo to power conferences for universities,
associations and non-profits around the globe.

11.9.1 Trade Shows – An International Network
Infrastructure

Trade shows are commonly defined as “market events
of a specific duration, held at regular intervals, at
which a large number of companies present the main
product range of one or more industry sectors”

(Kirchgeorg et al., 2010, p. 63). Each year thousands
of trade fairs are held worldwide.2

Participating in trade shows has been identified as
an important mechanism to acquire and develop
business networks (Gerschewski et al., in press; Harris
and Wheeler, 2005; Measson and Campbell-Hunt,
2015). Trade shows represent a critical forum for
firms to improve their international exposure, promote
products and services, build relationships and
facilitate knowledge exchange simultaneously
(Blythe, 2000; Evers, 2011a, b; Evers and Knight,
2008). This can be particularly suitable for resource-
constrained companies, such as new ventures. Trade
shows further represent a cost-effective medium for
international marketing to meet a large number of
potential business partners and prospects, as well as
strengthening relationships with the established
business network base (Evers and Knight, 2008;
Gerschewski et al., 2020). Case Box 11.4 illustrates
how the conference management software company
Ex Ordo grew its international sales and built its brand
legitimacy (i.e. brand credibility, authenticity) through
developing trade show networks.

11.10 INTERNATIONAL GROWTH AND
COMPETITIVENESS

In dynamic and competitive high-tech environments, a
firm’s unique knowledge-intensive assets (in the form
of technological offerings) and its ability to utilise
technology can effectively create the basis for
competitive advantage. This can also accelerate early
and successful internationalisation of new firms
(Autio et al., 2000). High-tech ventures are challenged
by globalisation processes, such as rapid
advancements in technology with increasing cost

pressures, with many technologies being eventually
replicated to a large extent by larger MNC
competitors, resulting in poor performance or failure.
This section looks at the importance of scaling the
venture for global growth to understand how it can
develop and sustain its competitiveness on
international markets.

11.10.1 Scaling New Ventures for International
Growth

Building a successful company is not just about
revenue growth, but about managing its cost base. As
discussed in the introduction to Part IV, growth can be
measured also by number of employees, offices,
capital investment and market share. However, when
the venture does grow, more resources tend to be
required to manage and sustain growth, and with that
costs rise. For example, a company that gains a
customer, recruits more people to build service
capacity and adds revenue at the same rate is adding
more cost. Scaling is about increasing revenue at a
rapid rate while increasing resources at an incremental
rate. Google and Salesforce.com are good examples of
successfully scaled businesses that increased their
customer base while adding fewer additional
resources, thus driving consistent growth and
increasing margin over time (see also Case Box 11.5).
Scaling is therefore about increasing growth without
having to incur huge costs. It involves designing and
modifying the venture’s business model dimensions in
a way that is scalable, in order to generate consistent
revenue growth and measured associated costs
(scalability is further addressed in Section 11.11 under
international digital entrepreneurship).

CASE BOX 11.5 SITEMINDER: BUILDING A

GLOBAL CUSTOMER BASE AND SCALING

FOR GLOBAL GROWTH

Case written by Ann Walsh, NUI Galway, and Ruari Conroy, VP
Global Growth Markets, SiteMinder.

In an age of rising choice and accessibility for curious travellers,
SiteMinder exists to liberate hoteliers with technology that makes
a world of difference. This Australian-born company has become
the global hotel industry’s leading guest acquisition platform,
ranked among technology pioneers for its smart and simple
solutions that put hotels everywhere their guests are, at every
stage of their journey.

Established in 2006 by Mike Ford and Mike Rogers, SiteMinder
had grown its workforce to 700 employees by 2019, including six
offices (Sydney, London, Galway, Dallas, Bangkok and Cape
Town). An interesting insight into this Australian company’s
success is that 80 per cent of its revenue comes from outside its
home market, with Europe, the Americas and Asia as high-
growth regions. SiteMinder’s growth story has been built on
strong customer relationships from its inception. In 2018,
SiteMinder’s platform was responsible for more than 87 million
reservations worth US$28 billion in revenue for 35,000 hotels
around the world. On average 165 reservations worth over
$53,000 passed through its platform every minute.

The company launched its first cloud hospitality product, “The
Channel Manager”, to help democratise the global hotel software
industry, and to give hotels of all sizes the opportunity to liberate
their business through technology in a cost-effective way. In
2008, SiteMinder launched its second ground-breaking product,
“TheBookingButton”, and only one year after opened its first
European office, in London. SiteMinder continued to expand to
all sides of the globe: first Bangkok in 2012, and then Dallas in
2014, which was, and still is, the management centre for all its
South and North American territories. It was during this period
that SiteMinder’s customer base started to shift away from
Australia. In 2011, more than 4,000 customers were using
SiteMinder’s technology (84 per cent were based in the Pacific).
By 2013, this number had grown to 9,200, and only 49 per cent
of these hoteliers were based in the Pacific region (i.e. 36 per
cent in EMEA, 13 per cent in Asia and 2 per cent in the United
States).

The flourishing SiteMinder business was then given a major
injection of confidence when it raised $33 million from Silicon
Valley’s Technology Crossover Ventures in 2014. The objective
was to help accelerate further development of products and scale

SiteMinder’s global operations. In 2015, the website builder
product, “Canvas”, was launched, and the company’s hotel
business intelligence and pricing data offering solution called
“Prophet” came to market in 2016.

Scaling operations for SiteMinder was also very evident in 2016
with the opening of its Galway office. By this point the company
had already hit the 23,000 customer milestone, and ranked no.
17 in the inaugural report by H2 Ventures and Investec on the top
50 technology pioneers to come out of Australia and New
Zealand; it was also named a Deloitte Technology Fast Australia
50 winner for the sixth consecutive year. In 2017, SiteMinder was
named among the 50 best companies to watch by The Silicon
Review, one of the leading magazines for business and
technology professionals around the world, focusing on
innovative enterprise solutions developed by established industry
providers.

2018 was an outstanding year for SiteMinder as it won its
30,000th customer in the shape of the River Palace Hotel in Italy.
That same year, Airbnb entered the hotel market for the first time
and chose SiteMinder to become its first global hotel technology
partner. SiteMinder received a Top hotel Star Award in Germany
for the fourth straight year, and appointed the former chief
operating officer and chief financial officer at Xero, Sankar
Narayan, as its new CEO.

Also in 2018, this globally focused technology company
surpassed AU$100 million (around US$70 million) in recurring
revenue, with more than 80 per cent of its revenue from outside
its home market of Australia. The company also welcomed its
700th partner into the SiteMinder ecosystem, which included
Ryanair and Comair Travel, both signed in 2019. By the end of
2019, the business had entered the Soonicorn Club, identifying
Australia’s potential unicorns of the future.

Narayan is now focused on building SiteMinder’s ecosystem to
address the 700,000-strong global hotel market. SiteMinder will
also be assessing a range of capital and investment options, and
strengthening its position as an employer of choice.

“Reaching AU$100 million in revenue is a proud milestone in our
journey. However, we are far from complacent, given the massive
global opportunity ahead of us,” says Narayan. “I’m delighted to
help lead SiteMinder in achieving continued success, through
deeper, global expansion and our people at the forefront.
SiteMinder’s growth to date is evidence that hoteliers around the
world need a simple solution to navigate a complex landscape
that has been both disrupted and enabled by the digital age,
lowered barriers to travel, and rising consumer expectations.
From the smallest independent operators to multinational chains,

we are as driven as ever to liberate every hotelier with
technology for many more years to come.”

11.10.2 Developing and Sustaining International
Competitiveness

Entrepreneur-specific capabilities have been identified
as important for a new firm’s international
performance (Dimitratos et al., 2004; Ibeh, 2003) and
can influence the strategic management and direction
of the firm (Weerawardena et al., 2007). New firms
can internationalise successfully to entrepreneurs’
specific capabilities (Knight and Cavusgil, 1996;
Oviatt and McDougall, 1994). The owner-manager
can be central to the development of dynamic
capability for high-technology and knowledge-
intensive firms.

The dynamic capabilities of the firm suggest that
organisations must become active generators of
competitive resources by which entrepreneurs
“integrate, build, and reconfigure internal and external
competencies to address rapidly changing
environments” (Teece et al., 1997, p. 380).
Entrepreneurially orientated firms display capabilities
like innovation and proactively seek the chance to
recognise new opportunities (Lumpkin and Dess,
1996). What one conceives of as entrepreneurship is a
process, not just a status, and as such it requires
dynamic attributes (Zucchella et al., 2005). It requires
the entrepreneur to develop the organisation through
capability reconfiguration (Montealegre, 2002) – the
capacity of the entrepreneur to mobilise resources and
develop and reconfigure dynamic capabilities in
changing business environments for firm performance
(Weerawardena et al., 2007). The dynamic capabilities
view of the firm can also help explain an INV’s

adaptability and flexibility in managing, changing and
diversifying markets, under the leadership and
management of its founder-managers (Evers, 2011b).

Figure 11.6 identifies those attributes that can
underpin a high-tech INV’s international
competitiveness. Strategic attributes are defined as
those resources and capabilities that enable the firm to
develop and sustain competitiveness in international
markets at an early stage in its life cycle. These are
typically internal resources, and they provide the firm
with a unique and sustainable advantage over
competitors. Strategic attributes are identified at two
levels: the entrepreneur and the firm.

11.10.2.1 The Entrepreneurial Team

The dynamic capabilities view assigns a prominent
role to the entrepreneurial decision-makers in the
formulation and implementation of competitive
strategy (Weerawardena et al., 2007). Entrepreneurs or
entrepreneurial teams can possess strategic attributes
that serve as a source of competitive advantage. Prior
international experience, knowledge and networking
capabilities can help them strategically manage,
develop and configure a firm’s resources and
capabilities for creating and sustaining
competitiveness in industrial and global sectors. In
order to gain a competitive advantage and respond to
the ever-fluctuating business environment, the
entrepreneur’s role is to re-organise the firm’s external
as well as internal organisational skills and resources.
The INV entrepreneur’s qualities can be categorised
into objective capabilities and subjective capabilities
(Hutchinson et al., 2006) (see Table 11.3).

Objective Capabilities: Objective capabilities are
described as the team’s prior technical, commercial

(marketing) and start-up knowledge and experience.
Such knowledge can give access to a network
resource pool and valuable experience, which makes
up the unique human capital embedded in the founder-
managers of the INV and is hence a source of
competitiveness (Loane and Bell, 2006). However,
value for the firm will not be captured from these
capabilities if the entrepreneur’s effort and motivation
are lacking or misaligned (Castanias and Helfat,
2001). Hence, we turn to other subjective capabilities
of the entrepreneur.

Table 11.3 The INV entrepreneur’s dynamic attributes

Objective capabilities Subjective capabilities

• Prior international experience • Global mindset

• Prior industry knowledge and • Proactive personality

experience

• Networks • Risk-taker

• Networking

capability

• Market-focused

learner

Subjective Capabilities: Subjective capabilities are
the entrepreneur’s personal characteristics and
competencies. The success of a firm, in relation to its
competitors, is dependent on the INV entrepreneur’s
personality as well as a proactive international
mindset. An international market focus and global
mindset refers to the INV founder’s proactiveness and
vision regarding leading and managing its new
venture on international markets (Harveston et al.,

2000). INV founder-managers require dynamic skills
to drive the capability-building process to ensure that
the firm develops knowledge-intensive products
competitively (Weerawardena et al., 2007, p. 299). A
venture can develop competitiveness through the
entrepreneur’s “networking capabilities” for
knowledge, relationship building and resource
acquisition. A market-focused learning capability is
“the capacity of the firm, relative to its competitors, to
acquire, disseminate, learn and integrate market
information to create value activities” (Weerawardena
et al., 2007, p. 300).

11.10.2.2 Firm Level

As illustrated in Figure 11.6, a firm’s resources and
capabilities enable the venture to deliver a value-
added product and to respond to and adapt quickly to
changes and developments in its market
environments. At firm level, a number of key
attributes emerge as the basis for competitive
advantage for INVs (see Figure 11.6).

Human Capital and Technology: INVs use
technological innovations to differentiate their
products from those of competitors. Product
differentiation can be broken down into quality and
value, created through innovative technology and
product design (Knight, 1997; Rennie, 1993). Quality
is a distinct source of competitive advantage to the
firm. A product’s quality and uniqueness can be
positively related to international competitiveness.
Product differentiation can be a result of the unique
knowledge possessed by the human capital of the firm
embedded in product solutions.

Product Diversification: Product diversification is
a vital component of a firm’s international growth

strategy (see Figure 11.6). It involves extending
product lines, adding new product lines and creating
new customer markets for market expansion and
penetration. Product diversification may be regarded
as a strategic response to knowledge gained from the
market regarding new developments and new
customer channels. Product diversification can result
in increased profits as the business targets foreign
markets as well as new customer segments, such as
niche customer segments. In effect, international
market growth occurs by enabling the firm to build its
resources base to further exploit new markets and
penetrate current ones.

Organisational Adaptability: It is important that
the INV has the ability to improvise and adapt, and
that it is also willing to find out the requirements of
each customer, as well as of the local distribution
channels. The firm’s ability to adapt accordingly is of
vital importance in the market, since firms may be
hindered by unforeseen circumstances that require
them to adjust. Therefore, a firm may require
adaptable operational routines to serve all markets.
International new ventures must have the ability to
adapt quickly, as survival renders adaptability a
dynamic capability (Teece et al., 1997) as well as a
strategic attribute (see Figure 11.6).

Customer Relationships: As discussed in Chapters
6 and 8, customer relationships form an important
component of the venture’s value-added network and
marketing strategy. Ventures need to develop
strategies to build strong relationships with their
international buyers. Customer relationship building
and customer orientation constitute a well-founded
capability in successful INVs (Loane and Bell, 2006).
Customer service is also identified as a source of
differentiation for firms. Following successful

targeting of global niche customer segments, the firm
must nurture and maintain a good working
relationship with its international customers. The
INV’s customer orientation, fostered by the founder’s
close relationship building and commitment to client
satisfaction, needs to be embedded in the overall
market offering to sustain the international
competitiveness of the high-tech venture over time.

11.11 INTERNATIONAL DIGITAL
ENTREPRENEURSHIP

Digital technologies have revolutionised how
organisations, irrespective of their size or industry,
create and deliver value-based transactions within
local and foreign markets (Ojala et al., 2018). In
general, digitisation tends to favour
internationalisation of ventures. Digital firms3 (also
known as born digitals, iBusinesses, online service
providers, digital information providers, internet
firms) embody characteristics that impact and drive
their internationalisation process (Zhang et al., 2015;
Brouthers et al., 2016; Wentrup, 2016). A digital firm
depends on the internet and digital technologies for its
production, operating and distribution processes.
Digital technologies can transform physical products
and services into digital forms through greater
connectivity across digital platforms (Nambisan,
2017).

Digital platform providers (DPPs) have emerged as
an ubiquitous form of born digital and are defined as
“a shared, common set of services and architecture
that serves to host complementary offerings”
(Nambisan, 2017, p. 4). By using services offered by
DPPs, we can listen to music when we want as a
service through Spotify, watch audio-visual

entertainment through Netflix, or find accommodation
easily in a foreign country through Airbnb. Types of
internet platforms or digital intermediary platforms
include social media (e.g. LinkedIn, Facebook),
digital solutions firms (e.g. PayPal), e-commerce or
retail firms (e.g. eBay, Amazon) and producers of
digital content and platforms (e.g. Netflix, Spotify;
UNCTAD, 2017). Other platforms include Airbnb,
Uber, YouTube, Match.com and Duolingo. The instant
global brand recognition and reach of these firms
within a short space of time simply reflect their
unwavering success. At the same time, DPPs have
been reinventing traditional business models and
changing organisational structures (Ojala et al., 2018;
Brouthers et al., 2016; Yoo et al., 2012).

To fully appreciate the early and rapid
internationalisation of born digitals, we discuss in the
next section the idiosyncratic nature of digital product
offerings, and some of the key strategic factors
attributed to their rapid international growth and the
competitiveness of their business models.

11.11.1 Characteristics of Digital Artefacts

Firms with a market offering that is both digital in
nature and distributed by digital technology are
fundamentally digital firms. Monaghan et al. (2020)
refer to born digital firms as embodying a “space-
place” relationship. Space refers to these firms
operating in a digital infrastructure with an
identifiable online presence. At the same time,
employees and some organisational operations are
grounded in a physical “place” such as offices,
warehousing, robotics space or data centres
(Monaghan et al., 2020). This type of physical
footprint (place) has less need for significant capital

investment in plant and retail operations compared
with its clicks-and-bricks counterparts and also
manufacturing firms.4 Although digital firms need
“place” dimensions to operate their businesses, their
products and services are fundamentally digital
artefacts.

Ojala et al. (2020) identify four main
characteristics (see Figure 11.7) that are inherent in
these digital artefacts (see Ojala et al., 2020 for further
explanation). Such characteristics endow born digitals
with idiosyncratic attributes leading to resolute and
rapid international growth (see later Figure 11.9). It
must be noted that digital firms that are wholly
dependent on digital infrastructure differ from firms
adopting the “bricks and clicks” business model (i.e.
firms that operate their sales and distribution models
both off- and online).

11.11.2 Strategic Attributes of Born Digitals

Born digitals have been a significant force in the
global economy and, despite their rapid global reach
within a short time period, many have adopted
effective business models even with the limited
resources available. Zhang et al. (2015, p. 206)
suggest that “the digitised, non-material nature of such
good and services … gives them the potential for high
scalability”, something that is likely also to influence
their internationalisation strategies. As born digitals
operate to a very high degree “in space”, their
connection to markets around the world can be nearly
instant (Monaghan et al., 2020). Digital firms can also
build reputation online quickly and in a way that
overcomes the liabilities of newness (Johanson and
Vahlne, 2009). Accelerated growth is possible because
digitisation facilitates the ability to scale globally as

well as to enhance both customer interaction and
customisation (Autio and Zander, 2016). Drawing on
the recent work of Monaghan et al. (2020) in the
Journal of International Business, we discuss below
some of the key strategic attributes of born digitals.
We depict (Figure 11.9) each of these attributes as
well as some external bottlenecks they may encounter
when entering different foreign markets.

Figure 11.7 Characteristics of digital artefacts in born digitals
Source: Author’s depiction based on Ojala et al. (2020).

11.11.2.1 Multi-sided Platforms and Network
Effects

Multi-sided platforms (MSPs) comprise technological
infrastructure that facilitates the transfer of products
or services that create value by supporting direct and
indirect interactions between two or more customer or
participant groups. MSPs give rise to multi-sided
markets. DPPs typically are embedded in multi-sided
market models.5 In order to bring content providers,
end users and other actors together in the digital
market space, digital platform providers must operate
in two-sided or multi-sided markets (Ojala et al.,
2018). For example, the DPP Netflix needs movie
content providers, local internet service providers and
device manufacturers in order to deliver its service

(these activities can be referred to as a layered
modular architecture, discussed later in the section).

This type of multi-sided exchange further confers
direct and indirect network effects or benefits for the
actors, particularly platform providers. Network
effects occur in an industry when one customer of a
product or service has a positive effect on the value of
that product for other customers, such that another
user makes the service more valuable for every other
user (e.g. LinkedIn). Two sets of users complement
each other’s usage, increasing the network effect for
enhanced value for both. The success of the digital
platform depends on the number of users on each side
and the usage across them (see Figure 11.8). For
example, the more customers that use digital
platforms such as Facebook or eBay, the better for
everyone in the network of users; or put simply: more
users = more value users.

Figure 11.8 Network effects in multi-sided markets
Source: Tamer Cavusgil (2019). “From Born Globals to Born
Digitals: Two-Sided Markets and Research Implications.” Keynote
presentation at McGill International Entrepreneurship Conference,
SDU, Odense. With kind permission from Professor Tamer
Cavusgil.

11.11.2.2 Automation and Scalability

Operating through digital infrastructures and digital
automation of core business processes enables digital
firms to acquire economics of scale and capitalise on
the productivity and efficiency gains. Monaghan et al.
(2020) point out that “one of the most obvious areas
impacted by automation pertains to human interaction;
an element of internationalisation that is traditionally
part of complex transactions and relationship-building
across borders” (p. 7). In this way, automation can
mitigate the impact of high transaction costs
associated with geographical separation, thereby
lowering communication costs (Monaghan et al.,
2020; Hennart, 2014).

Digital platforms have given many digital service
providers possibilities to scale globally, and to rapidly
transcend national borders by serving multi-sided
markets. We discussed earlier (Section 11.10.1) that
scalability is about increasing growth without having
to incur huge costs. In many cases the production of
digital goods and services entails relatively higher
fixed costs and lower variable costs. For example,
software development would require significant fixed
costs in technological infrastructure and human
capital; however, once the final program has been
developed it can be maintained, sold or distributed at
very low marginal costs (OECD, 2018). While
marginal costs may remain non-negligible, there are
also a range of non-rival consumption goods, such as
software, e-books or music, which can be re-
distributed at an effective marginal cost of zero
(OECD, 2018).

LinkedIn and Salesforce.com are good examples of
successfully scaled businesses, which have grown
their customer base globally while adding fewer
additional resources. Born digital firms such as these
can quickly build and leverage economies of scale in

core business processes and product distribution,
making them “readily scalable” (Hennart, 2014). This
allows for early and then rapid international revenue
growth and increased margin over time.

11.11.2.3 Flexibility and Customisation

As shown earlier in Figure 11.9, the digital nature of
its artefacts or market offerings, operations and
technological underpinnings renders the born digital
flexible from inception. Born digitals can develop
internal business processes that can not only increase
productivity and variety, but can achieve mass
customisation and improve flexibility in product
design (Ojala et al., 2020). Digital services can be
easily modified to meet the needs of customer
preferences and the local foreign market. The
interactive nature of digital platforms is based on the
type of user and their choices.

DPPs operate in multi-sided markets and they tend
to rely on the resources provided by other firms (e.g.
Netflix depends on content providers, local network
operators and device manufacturers). This brings into
play their dependency on these firm actors in what is
referred to as a layered modular architecture (LMA)6
in which they are embedded to provide their service
(Yoo et al., 2010). As DPPs are reliant on digital
platform technologies, the degree of flexibility and the
foreign market can be contingent on their underlying
architecture, which sets the boundaries and
possibilities to commercialise and strategically grow.
The LMA is where digital technology integrates
loosely coupled components of a product that allow
for innovation, customisation and firm organisation,
and can be replicated and altered across different
countries (Ojala et al., 2018). This LMA used to

deliver the full service to customers further underpins
digital connectivity across activities of the born digital
firm’s value chain, enabling coordination and
configuration (Monaghan et al., 2020; Ojala et al.,
2018). However, in some foreign markets such inter-
dependencies on the LMA can create bottlenecks.

Figure 11.9 Strategic attributes of born digitals

Technological and regulatory environments as well
as resource availability across actors in different
countries may limit or restrict the born digital’s degree
of flexibility by hindering or prohibiting its
distribution of digital content into that target foreign
market. For example, under EU regulations,7
streaming services like Netflix and Amazon Prime
Video must ensure that at least 30 per cent of their
libraries are dedicated to local content in the EU.
Studies have indicated that technological and strategic
bottlenecks (in most cases temporary) can occur, such
as limited access or internet speeds, country
regulations or time-consuming negotiations with local
internet communication providers (Ojala et al., 2018),

which can restrict or necessitate the adaptation of the
digital content distribution. The cultural preferences
of the target market can also the degree of
standardisation of the digital content (Shaheer and Li,
2018).

11.12 CULTURAL CONSIDERATIONS IN
INTERNATIONAL BUSINESS
NEGOTIATIONS

Despite the large volume of textbooks on international
business, understanding the cultural background and
context within which the entrepreneur conducts
business is critical for successful business
relationships and for the internationalisation of the
venture. Cross-cultural negotiation is “when the
parties involved belong to different cultures and
therefore do not share the same ways of thinking,
feeling and behaving” (Casse, 1981, p. 152). The
ability to achieve mutually beneficial outcomes from
cross-cultural sales negotiations is believed to be
crucial to sales success internationally. Negotiation is
a complex process and is significantly influenced by
the culture(s) within which the participants are
socialised, educated and reinforced.

The cultural understanding of foreign partners
needs to be considered at every stage of a sales
negotiation process. INV entrepreneurs need to have a
clear understanding of culture and work with the
culture of the person they are doing business with.
Hollensen (2017) states in relation to sales managers
understanding culture: “managers with the skills to
understand and adapt to different cultures are better
positioned to succeed in these endeavours and to
compete successfully in the world market”. If
managers are competent enough to understand

different cultures, they have an advantage over those
who do not fully understand them.

In order to conduct successful negotiations, each
party must have some level of understanding of the
other party’s culture. This may also result in sales
people adopting a negotiation strategy that in some
levels aligns well with the other party’s cultural
system. Cultural readiness is required, and this means
that research and training can come a close second to
prior experience of working with different cultures. A
common theory used to understand different cultural
orientations is Hall’s (1960, 1976) concept of low-
and high-context cultures.8

11.13 CHAPTER SUMMARY

Internationalisation is a relevant strategic option for
high-tech venture expansion and growth. This chapter
introduces the relevance of international
entrepreneurship for hightech ventures and outlines
key considerations for high-tech ventures pursuing the
internationalisation route and internationally
marketing their technology. First, high-tech ventures
need to consider factors influencing this decision and
enabling their venture to internationalise. Second,
strategic options available are identified and scales of
activities that can underpin the nature of the venture’s
geographical market scope are described. Third,
selecting which foreign market segments to serve is a
critical decision and the factors need to be evaluated
carefully in this process. Fourth, the design and
implementation of the marketing programme in
foreign market segments must be considered in terms
of standardisation and adaptation of the 4Ps. Fifth, the
types of foreign market entry strategies available to
the venture are presented. Using one or a combination
of entry strategies will be determined by a number of
factors, as well as ensuring a good fit into the
international new venture’s marketing strategy.

The importance of networks is discussed, along
with active international trade show participation to
strengthen the new venture’s credibility on
international markets, leading to initial sales. Such
growth strategies require the venture to actively
engage in sales activities by committing resources, in
which there are differences between growing and
scaling the venture. Using the dynamic capabilities
perspective, Figure 11.6 depicts a framework
identifying strategic attributes at entrepreneur

(learning and proactive network capabilities and
knowledge) and firm levels to allow the venture to
achieve and sustain international competitiveness in
dynamic and globally driven high-tech markets. We
address the growing phenomenon of born global
digital entrepreneurship, and discuss the key
characteristics and strategic attributes explaining the
rapid international growth of the born digital firm.
Finally, the chapter briefly outlines the importance for
the learner of conducting and managing business
negotiations in a cross-cultural context.

CASE STUDY 11.1 AEROGEN LTD

Case written by John Power, CEO and founder of Aerogen Ltd.

Since its founder John Power first established a medical
technology business in Galway in 1998 Aerogen
(www.aerogen.com) has had an interesting corporate history. In
2000, the company merged with a US Silicon Valley-based
Speciality Pharmaceutics company and went public on
NASDAQ that same year. The company was acquired in a
hostile takeover in 2005, and following a Management-Buy-Out
(MBO) led by John Power in 2008, it again became an Irish-
owned entity. In 2020, the company successfully designs,
manufactures, markets and sells a range of patented drug
delivery systems aimed at the critical care respiratory market.
Its market leading electronic nebuliser products have been
used to treat over 10 million patients and are used in acute
care facilities in 75 countries throughout the world. It employs
over 300 people, 220 in its Irish facilities (70+ R&D) and 80
internationally. It supplies an own-branded integrated product
range to all of the major Acute Care Respiratory Original
Equipment Manufacturers (OEMs) as well as a stand-alone
version of the nebulisers to Independent Distributors (IDs) in
the larger international markets. The late business guru Peter
Drucker stated: “Because the purpose of business is to create
a customer, the business enterprise has two, and only two,
basic functions: marketing and innovation” (Drucker, 1954, pp.
39–40). John Power is a firm believer in this approach and
therefore concentrates Aerogen’s resources to create
competitive advantage in the key areas of Innovation and
Marketing. To this end the company strategy is based on
“Creating Value through Innovation”, and adopts a Blue Ocean

strategy through first-mover advantage with high-tech
innovations in new markets. Aerogen has registered over 200
international product patents and its award winning nebuliser
products are now widely regarded as “best in class”, improving
patient outcomes by giving superior drug deposition in the lung
for respiratory compromised patients.

The company’s international team is made up of marketing
and clinical support specialists (CSSs) located in key regional
locations to support both its distributors and the end-user
groups of medical and healthcare organisations in these
markets. In the USA, its largest international market, the
company employs 40 commercial staff based out of Chicago.
Other locations include Hong Kong and Beijing for its SE Asia
market, Dubai for the Middle East and New Delhi for India. In all
these regions Aerogen utilises distributors as the main channel
to market. In Europe a similar model is deployed other than in
Britain and Germany (the company’s second biggest market)
where the company more recently moved to a direct sales
model. Unlike Germany and Britain, the CSSs employed in
non-direct markets are not sales people per se but work
alongside the Aerogen marketing team with the end-user
stakeholder groups to assist in training and market
development where they gather and evaluate latter experience
and clinical needs of product. The team’s collective remit is to
create “pull” in the market of healthcare and medical
organisations creating pipeline targets that are then served by
the local distributor.

Alongside its national distributor network, Aerogen operate a
very close business relationship with six of the world’s largest
OEM producers of mechanical (life-support) ventilation
equipment for health care. The Aerogen nebuliser electronic
drive circuitry is integrated into the OEM product and thus the
marketing, including product, product modification, promotion
and intelligence, is through partnership agreement with the
onus on the OEM to sell the entire market offering to the end-
user hospital. To both protect and develop its brand equity
Aerogen insists that all OEM-integrated products carry the
Aerogen brand (similar to the “Intel inside” strategy), and only
Aerogen’s range of disposable and re-usable nebulisers can be
used in conjunction with its integrated systems. As the founder
says, “they [OEMs] sell the razor, we follow up with blades”. It is
important to note that the integrated systems and stand-alone
systems drive the same nebuliser products and that the Single
Patient Use Solo Nebulisers create a disposable revenue
stream that accounts for 80 per cent of Aerogen’s sales.

Up until Aerogen negotiated integration partnerships with the
OEMs, all its electronic control systems were discrete stand-
alone products that could drive its range of nebulisers. As the
OEMs have converted to integrated systems, the stand-alone
products are now sold mainly through IDs. The main ID

markets are North America, the EU and Japan, although
considerable sales are still made by both OEMs and IDs
globally through supplying national health care tenders. For
each country, Aerogen’s IDs are carefully selected as they are
expected to not only make product sales, but are trained to give
clinical and technical support in the field and to gather
important intelligence on public and group tendering in their
markets.

Pull Approach towards End-Users

Although its customers are B2B, OEMs and distributors,
Aerogen’s commercial team concentrate their core marketing
activities on the end-user medical staff: physicians, respiratory
therapists and nurses working in ICUs. Increasingly however,
as health care economics play a greater role in product
selection, Aerogen’s commercial team needs to spend more
time with other key influencers in the purchasing cycle.
Department directors, Group Purchasing Organisations (GPOs)
and pharmacy, all now have an influence on product adoption
and acquisition, therefore unique selling propositions (USPs)
need to be prepared for each influencer. The end-user medical
staff however, remain the most critical stakeholder group in its
marketing strategy, and Aerogen implements a pull strategy in
their marketing activities, focusing much of their promotions
and market intelligence gathering activities on these actual
end-users in medical and health organisations.

Having attained market leadership position in a hospital sub-
sector, the company has applied a diffusion strategy to
continually expand its applications, reach and hence market
opportunity within the broader acute care setting. Looking to
future growth, the company has created an emerging bio-
pharmaceutics business and currently has two drugs in clinical
trials.

CASE STUDY QUESTIONS

1. What factors do you think brought about John Power’s
decision to internationalise Aerogen’s products?

2. What factors do you think Aerogen used to select its foreign
markets and segments?

3. What type of foreign market entry mode(s) does Aerogen use
to enter its foreign markets?

4. What factors do you believe may have impacted Aerogen’s
decision to move to a direct sales model in Britain and
Germany?

5. What do you see as the pros and cons of moving to a direct
sales model?

6. What is Aerogen’s core competitive advantage on
international markets? What type of strategic attributes
enable the firm to attain its competitive advantage in foreign
markets?

11.14 REVISION QUESTIONS

1. Define international entrepreneurship and its relevance to
firms operating in high-tech sectors. Select examples of high-
tech born globals that are less than 7 years old.

2. Discuss the factors a venture needs to consider when
selecting foreign markets to enter.

3. Drawing on relevant sources, discuss the internet as an
increasingly used foreign market entry strategy by high-tech
ventures. Illustrate your answer with examples of companies
who are dependent on digitisation for entering foreign
markets.

4. Referring to the case studies in this chapter (Case Boxes 11.4
and 11.5), identify and explain what strategies the companies
used for scaling their operations for global growth.

5. Select a firm of your choice and assess the relevance of the
framework in Figure 11.6 for understanding how it develops
and sustains its international competitiveness on foreign
markets.

11.15 NOTES

1. For further reading on foreign market entry modes, see
Hollensen (2017) and Baines et al. (2011).

2. According to data from the Global Association of the
Exhibition Industry, there are around 1,200 exhibition venues
and 31,000 exhibitions a year worldwide, which offer a
combined hall space of more than 34.8 million m2 – or the
equivalent of 460 football fields. Around 4.4 million exhibitors
and more than 260 million visitors gather at these exhibitions
each year.

3. Digital firms are different from information and communication
technology (ICT) firms. ICT firms include manufacturers of
hardware and devices, components (e.g. Apple, Sony),
software and service firms (e.g. SAP, Adobe Systems) or
telecommunication, communication and infrastructure
providers (UNCTAD, 2017).

4. Digital MNCs have a higher ratio of internet intensity to foreign
assets than do traditional bricks-and-mortar MNCs (UNCTAD,
2017).

5. For some excellent depictions and material on multi-sided
models, see https://innovationtactics.com/platform-business-
model-1/

6. A layered modular architecture comprises a hybrid model,
existing between a modular and a layered architecture, with
digital components embedded in physical products (Yoo et al.,
2010).

7. www.loc.gov/law/foreign-news/article/european-union-
regulation-on-cross-border-portability-of-online-content-
services-iixn-effect/

8. See Hollensen (2017) for further reading on cultural
orientations.

11.16 FURTHER READING AND
RESOURCES

Evers, N. and Giblin M. (2017). “Born Globals Drivers of Cluster
Renewal and Innovation: A Study of the Galway MedTech Cluster”,
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Evers, N. and Knight, J. (2008) “Role of International Trade Shows in
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Hollensen, S. (2017) Global Marketing, 7th edn. Harlow: Pearson
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O’Gorman, C. and Evers, N. (2011) “Network Intermediaries in the
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Ojala, A., Evers, N. and Rialp, A. (2018) “Extending the International
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Ryan, P., Evers, N., Smith, A. and Andersson, S. (2019) “Local
Horizontal Network Membership for Accelerated Global Market
Reach”, International Marketing Review, 36(1): 6–30. DOI:
10.1108/IMR-03-2017-0061.

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