Chapter 9: Market Entry Strategies, Innovation and Performance of SMEs in the Service Sector

Published on Sep 10, 2018
· DOI :10.1108/S1876-066X20180000034009
Small- and medium-sized enterprises (SMEs) face challenges in internationalisation due to their limited resources. Research on service firm internationalisation as well as the antecedents and consequences is scarce. Literature suggests that internationalisation for service firms is even more demanding than for manufacturing firms due to the characteristics of services such as intangibility. Extant literature states that firms introducing innovations are more likely to export. However, research on learning by exporting and thus investigating the effect of a firm’s export status on innovation is comparatively scarce. Therefore, the authors investigate the influence of different market entry strategies on innovation and firm performance. The authors employ a quantitative, survey-based approach to test our hypotheses based on a sample of internationally active firms headquartered in Austria. Regarding firm financial performance, the analysis of the data shows that the entry strategy of direct entry excels the direct export strategy. In terms of non-financial performance, the strategies of direct entry and direct export seem to be equally feasible.
  • References (48)
  • Citations (0)
📖 Papers frequently viewed together
31 Citations
7 Citations
78% of Scinapse members use related papers. After signing in, all features are FREE.
#1Christiane Prange (Tongji University)H-Index: 10
#2José Carlos Pinho (University of Minho)H-Index: 13
This article develops and tests a conceptual model to identify the impact of internal drivers (personal and organizational) on the international performance of small and medium-sized enterprises (SMEs). Drawing on the resource-based view of the firm and its capability extensions, it is argued that the effect of drivers is mediated by organizational innovation. To test the proposed theoretical model, we collected data from 120 exporting SMEs in Portugal. Results show that the indirect mediating e...
10 CitationsSource
#1Noémie Dominguez (IAE Lyon, University of Lyon School of Management)H-Index: 2
#2Ulrike Mayrhofer (IAE Lyon, University of Lyon School of Management)H-Index: 11
SMEs attempt to accelerate and diversify their international expansion strategies. The purpose of this article is to identify the internationalization stages followed by traditional SMEs to seize global market opportunities. The authors analyze the internationalization paths of five French SMEs operating in traditional manufacturing industries. The empirical study is mainly based on 66 interviews. The findings indicate that the internationalization process of SMEs continues to follow several sta...
27 CitationsSource
#1Joon-Ho Shin (Ramon Llull University)H-Index: 1
#2Xavier Mendoza (Ramon Llull University)H-Index: 5
Last. Chang-Bum Choi (CAU: Chung-Ang University)H-Index: 4
view all 4 authors...
This research explores the relationship between multinationality and firm performance (M-P) in the context of micro-multinational enterprises (mMNEs) within the service sector. We examine the moderating effects of industry characteristics using a data set of 1082 Spanish service mMNEs over an eight-year period. The empirical results provide statistical evidence that knowledge-intensive service mMNEs exhibit an inverted U-shaped M-P relationship, while capital-intensive service mMNEs present a U-...
12 CitationsSource
#1Lina Hollender (HHU: University of Düsseldorf)H-Index: 2
#2Florian B. Zapkau (HHU: University of Düsseldorf)H-Index: 8
Last. Christian Schwens (HHU: University of Düsseldorf)H-Index: 18
view all 3 authors...
Firms’ foreign market entry mode choice attracts considerable research attention. However, the performance implications of this choice remain inconclusive, particularly in the context of small and medium-sized enterprises (SMEs). The present paper draws on the resource-based view (RBV) and develops a theoretical model specifically tailored to the context of SMEs in order to study the relationship between entry mode choice and foreign venture performance. Testing hypotheses on 133 German SMEs, we...
24 CitationsSource
#1Wolfgang Markus Gleich (Allianz)H-Index: 1
#2Bjoern SchmeisserH-Index: 2
Last. Miriam Zschoche (WHU - Otto Beisheim School of Management)H-Index: 5
view all 3 authors...
Rising importance of service industries and international trade in services led to increased competition in the service sector. The aim of this study is to analyze the international sourcing behavior of service firms as a strategic means to contend with competition. Our theoretical predictions suggest that there is a U-shaped relationship between a service firm’s domestic competitive position and its pursuit of international sourcing: the relationship is first negative and at later stages positi...
6 CitationsSource
#1Vassiliki Bamiatzi (University of Leeds)H-Index: 5
#2Konstantinos Bozos (University of Leeds)H-Index: 5
Last. G. Tomas M. Hult (MSU: Michigan State University)H-Index: 62
view all 4 authors...
Research summary: Despite voluminous past research, the relevance of firm, industry, and country effects on profitability, particularly under adverse contexts, is still unclear. We reconcile institutional theory with the resource-based view and industrial organization economics to investigate the effects of economic adversity, such as the 2008 global economic crisis. Using a three-level random coefficient model, we examine 15,008 firms across 10 emerging and 10 developed countries for the 2005–2...
27 CitationsSource
Purpose This paper aims to evaluate the findings first put forward in the article “Internationalization strategies for services” (Gronroos, 1999) with the benefit of hindsight and to offer directions for further research and developments in this research area. Design/methodology/approach Research directions spurred by the publication of the original article are examined in the light of current service(s) marketing theory and practice and the development of digitalization and Internet and mobile ...
9 CitationsSource
#1S. Tamer Cavusgil (GSU: Georgia State University)H-Index: 61
#2Gary A. Knight (Willamette University)H-Index: 29
Our 2004 Journal of International Business Studies article, “Innovation, Organizational Capabilities, and the Born Global Firm” provided a framework for the phenomenon of early and rapid internationalization among young, entrepreneurial firms. This work can be characterized as an integration of marketing, entrepreneurial, and capability-based thinking around exporting, positioned as the born global exporter. The article also reported findings from a national study of start-up firms that expanded...
227 CitationsSource
In the internationalization process of a firm, the choice of a suitable entry strategy for the foreign target market plays a vital role. For small and medium-sized companies in the service industry, even more challenges emerge in this process. This study examines the market entry strategies employed by Austrian small and medium-sized service enterprises operating in the emerging markets of Central and Eastern Europe. Fifteen case studies of Austrian service companies are analysed. The results sh...
2 Citations
#1Norrin Halilem (Laval University)H-Index: 7
#2Nabil Amara (Laval University)H-Index: 26
Last. Réjean Landry (Laval University)H-Index: 30
view all 3 authors...
This article seeks to provide more insights on the two-way link between internationalization and innovation by considering total, direct, and reciprocal effects using a nonrecursive structural model. Innovation is defined through product and process development, while internationalization is defined through inward and outward internationalization in both closer and farther markets. The results suggest that these two major sources of growth are linked by different sets of relations, from the inve...
25 CitationsSource
Cited By0