iBooyah.com: "Born Globals" companies in the U.S and Europe
In contrast to the traditional pattern of businesses that operate in the domestic market for many years and gradually evolve into international trade, born-global firms begin with a relatively “borderless” view of their markets and develop the strategies needed to achieve international marketing goals at or near the firm’s founding.
Advancement of technology and the globalization movement has allowed companies to not only focus on their local market, but to also tap into the international markets with relatively moderate investment. Typical examples of these types of companies are high-tech firm such as Yahoo!, Ebay and Google. Part of the reason these companies are well known today is because they’ve successfully used technology to promote their product and services early in their inception. Of course, given these company’s business is the internet, it’s almost impossible to not be born-global.
Contrary to popular belief, young companies are not as significantly handicapped in their internationalization effort. The article seeks to uncover the key marketing-based approaches that give rise to superior international performance in born-global firms. Below are some interesting findings (Knight, Madsen, 2003):
1. Product differentiation is a must for born-global. These firms must find a niche and seeks ways to exploit it through marketing campaigns. The goal is to market the products or services in a compelling manner that is unique and distinguishable from competitors. Therefore, typical born-global firms are innovators. By offering unique products, direct competitive rivalries are minimized. Once a brand has been established, intense marketing effort is necessary to maintain the image.
2. Marketing competence appears to be particularly important in born global international performance as this is the primary channel in which these companies use to communicate with their buyers. Marketing competence implies skillful handling of product adaptation, marketing planning process, control of marketing activities, prowess in differentiating the product, as well as being highly effective in pricing, advertising, and distribution.
Companies that internationalize substantially at, or near their founding, and whose management tends to regard the world as its marketplace, are emerging in substantial numbers worldwide. Born-Globals are particularly interesting because such firms tend to be young and relatively resource poor. This study reveals that age, size, and limited resources are no longer barriers to early and substantial internationalization of the firm. It also reveals key marketing factors that appear to drive born global international success.
It is important to keep in mind that that while the internationalization of traditional MNEs has been studied extensively, very little is known about born-globals. Their emergence in large numbers is a key trend and more research is needed to understand them and their remarkable international success.
References:
Knight, Gary. Madsen, Koed (May 2003). An inquiry into born-global firms
in Europe and the USA. Retrieved from http://www.emeraldinsight.com.ezproxy.nu.edu/Insight/viewContentItem.do?contentType=Article&contentId=855588 on August 24, 2005.
