Internationalization Process of Software Start-Ups

Tesis de Máster , 2017 , 70 Páginas , Calificación: 1,5

Economía de las empresas - Fundación de empresas, planes de negocio

This thesis examines how a software start-up can effectively shape its internationalization process to secure its market position and to achieve a sustainable competitive advantage. To formulate possible recommendations, a literature study and a descriptive case study are carried out. The literature review considers the research domains of born globals, or rather, international new ventures, which describe the emergence of young, small and fast internationalized organizations. Furthermore, the literature study also reflects relevant theoretical explanations and frameworks such as: resource-based theory, knowledge-based view, dynamic capabilities, organizational learning, innovation theory, and international entrepreneurship. On this theoretical basis, study propositions are derived, which are then tested against the case study. The study consists of two cases and describes the internationalization process of two software start-ups. The results of the case study are then compared with the study propositions. Deviations are discussed in detail later. Finally, 24 recommendations are made which can support the effective internationalization process of a software start-up.

Table of Contents

Abstract

Abbreviations

List of Figures

List of Tables

1. Introduction
1.1 Motivation
1.2 State of Research
1.3 Research Question
1.4 Structure of the Work

2. Literature Review
2.1 Born Globals / International New Ventures
2.2 Resource-Based Theory
2.3 Knowledge-Based View
2.4 Dynamic Capabilities
2.5 Organizational Learning
2.6 Innovation Theory
2.7 International Entrepreneurship

3. Methodology
3.1 Research Method
3.2 Scope Delimitation
3.3 Data Collection and Data Analysis

4. Results
4.1 Company X
4.2 Company Y

5. Discussion
5.1 Pattern Matching
5.2 Detailed Analysis
5.3 Recommendations

6. Conclusions
6.1 Summary
6.2 Future Research

7. Bibliography

Appendix
A1 Born Globals / International New Ventures
A2 Resource-Based Theory
A3 Knowledge-Based View
A4 Dynamic Capabilities
A5 Organizational Learning
A6 Innovation Theory
A7 International Entrepreneurship
A8 Case Study Protocol

Abstract

This thesis examines how a software start-up can effectively shape its internationalization process to secure its market position and to achieve a sustainable competitive advantage. To formulate possible recommendations, a literature study and a descriptive case study are carried out. The literature review considers the research domains of born globals, or rather, international new ventures, which describe the emergence of young, small and fast internationalized organizations. Furthermore, the literature study also reflects relevant theoretical explanations and frameworks such as: resource-based theory, knowledge-based view, dynamic capabilities, organizational learning, innovation theory, and international entrepreneurship. On this theoretical basis, study propositions are derived, which are then tested against the case study. The study consists of two cases and describes the internationalization process of two software start-ups. The results of the case study are then compared with the study propositions. Deviations are discussed in detail later. Finally, 24 recommendations are made which can support the effective internationalization process of a software start-up.

Keywords

Software Start-Up × Born Global × International New Venture × Internationalization Process × International Entrepreneurship × Descriptive Case Study

Abbreviations

illustration not visible in this excerpt

List of Figures

Figure 1 Types of International New Ventures (Oviatt & McDougall, 1994, p. 59)

Figure 2 RBV Framework (Barney, 1991, p. 112)

Figure 3 Capabilities as Routines for the Development of Resources (Glowik & Bruhs, 2014, p. 164)

Figure 4 The Innovation Process Model (Glowik & Bruhs, 2014, p. 159)

Figure 5 Types of International Entrepreneurial Organizations (Zucchella & Scabini, 2007, p. 3)

Figure 6 International Entrepreneurship as the Union of Entrepreneurship, International Business and Strategic Management (Wach & Wehrmann, 2014, p. 14)

Figure 7 Entrepreneurial Personality in Comparison (Timmons & Spinelli, 2003, p. 65)

Figure 8 The Generic Value Chain (Porter, 2004, p. 37)

Figure 9 Relationship between SWOT analysis and RBV (Barney, 1991, p. 100)

Figure 10 Modes of Knowledge Creation (Nonaka, 1994, p. 19)

Figure 11 Modes of Organizational Learning, based on Argyris and Schön (1996, pp. 20-28)

Figure 12 Integrated Model of International Entrepreneurship (Zahra & George, 2002, p. 276)

List of Tables

Table 1 Comparison Between Study Propositions and Empirical Data of Companies X and Y

Table 2 Recommendations for an Effective Internationalization Process, adapted from Rialp et al. (2005, pp. 140-141)

Table 3 Comparison of Lean Start-Ups and Born-Global Firms (Rasmussen & Tanev, 2015, p. 15)

Table 4 Questionnaire for Expert Interviews

Table 5 Interview Transcript of Company X and Company Y

1. Introduction

“The born global phenomenon is an artifact of the new global marketplace.” (Cavusgil & Knight, 2009, p. 19)

Traditionally, international business (IB) was reserved for large multinational enterprises (MNEs) such as Apple, IBM or Microsoft. These companies (hereinafter also referred to as firms or organizations), being generally made up of thousand employees and having existed for several decades, offer their products and services through their worldwide networks of established subsidiaries and affiliates in many different nations (Tamer & Knight, 2009, p. 7). Distance and geographical location were considered to be natural barriers to global markets (Oviatt & McDougall, 1995, p. 33).

The increasing globalization and technological progress have changed the competitive landscape for companies and simplified the entry into international markets for micro, small and medium-sized enterprises (SMEs) like start-ups (SUs): The development of information and communication technology (ICT) has had the effect of breaking down barriers in communication (Nowiński & Rialp, 2013, p. 194). Internet and electronic mail, for example, improved and reduced the cost of communications, enabling SMEs to conduct business across virtual markets, and build or maintain contacts within its network such as partners or potential customers around the world (Loane, 2005, pp. 194-195). Globally operating airlines connected the world and made it possible to reach any destination within a day (Oviatt & McDougall, 1995, p. 30). Standardization in containerization of freight also reduced expenses and increased the speed of goods movements in all countries (Oviatt & McDougall, 2005, p. 542). An increasing homogenization of markets (Oviatt & McDougall, 1994, p. 51) and industry deregulations (McDougall-Covin, et al., 2014, p. 2), falling trade barriers and the availability of external sources of financing such as venture capital (Nowiński & Rialp, 2013, pp. 194-195) are further examples of simplified access to international markets. In the IB literature, these companies have been called born globals (BGs) (Rennie, 1993; Knight & Cavusgil, 1996; Knight, 1997), international new ventures (INVs) (Oviatt & McDougall, 1994), global start-ups (Oviatt & McDougall, 1994; Oviatt & McDougall, 1995) or instant internationals (Fillis, 2001). In theories of the late 70s and early 80s^[1], internationalization was described as a time-related process of incremental stages in which a firm gradually becomes involved in IB and successively enters foreign markets (Knight & Cavusgil, 1996, pp. 12-15). The changing prevailing conditions resulting from the new global market of cross-border venture activities, characterized by national and international networks, are contrary to the traditional internationalization theories, leading to a rapid form of internationalization (Bailetti, 2012, p. 6; Chandra, et al., 2012, p. 75).

The reasons why companies internationalize are very diverse: It could be that the home market may not be large enough to support the scale at which firms needs to operate (Tanev, 2012, p. 7). An expansion through market diversification has positive effects on economies of scale, as costs incurred in product development and marketing can be amortized over many markets. The supply of existing customers who have settled abroad (Tamer & Knight, 2009, p. 6), the acquisition of potential customers who are foreign (Tanev, 2012, p. 7), the possibility of earning higher profits from lucrative foreign markets (Tamer & Knight, 2009, p. 6), the movements of main competitors who are planning to internationalize soon or are already active globally force companies to expand across nations. Finally, it is also the products or services offered which lead to a simplification of product development and positioning in foreign markets due to the increasing homogenization of buyer preferences worldwide (Knight & Cavusgil, 2004, p. 125).

1.1 Motivation

The success of many international and innovative companies such as Airbnb, Dropbox or Uber, started as software SUs in Silicon Valley, is a typical motive for entrepreneurs to start their own business. A start-up is defined by Blank and Dorf (2012) as “a temporary organization in search of a scalable, repeatable, profitable business model” (2012, p. XVII) and represents many people's desire for autonomy and financial independence. Additionally, SUs can be subdivided into lean SUs and BG companies (see also Table 3 in Appendix A1). Lean start-ups focus on new products or prototyping, which leads to the establishment of new niche markets, while born global firms focus on preexisting niches and innovative products (Rasmussen & Tanev, 2015, p. 15). This thesis concentrates on BG firms as software SUs. The Internet, seen as a prerequisite for internationalization in the newly emerging economy (Etemad, et al., 2010, p. 319), provides software SUs direct access to partners and potential customers around the world to sell their generally intangible and scalable products or services. Software is considered a key enabler of other industries as companies rely on effective use of software to compete in the market, etc., (Käkölä, 2003, p. 1) and the industry is regarded as one of the fastest growing in the world. This seemingly unbroken trend has also prompted interest in this author to set out recommendations for an effective internationalization process of software SUs, building and securing their own market position, and thus creating a sustainable competitive advantage. Recommendations are an important starting point as, according to statistics, most SUs are unable to solve their most urgent problems and invariably do not manage beyond their fifth year. In fact, within the first year, this can be as much as almost 20% (Poposka, et al., 2016, p. 45). Because of the international orientation, global competition is also increasing (Knight & Cavusgil, 1996, p. 11). The results of this elaboration are therefore intended to address entrepreneurial teams of software SUs who want to engage in international activities and be successful in their efforts.

1.2 State of Research

The two different research streams which exist, BGs and INVs, both describe the phenomenon of young companies offering their products and services internationally from inception. Nevertheless, there is no uniform opinion in literature on the shared use of the two terms. In addition, neither of the two positions deal with the special features of software SUs, but are generalized by any type of young, rapid internationalizing firms. Added to this is the fact that for a plausible explanation of early internationalization processes of young firms further theoretical explanations and framework conditions have to be taken into account. From these circumstances a research gap emerges, which is taken up in this work. After the synthesis of both fields of research, resulting in a unified definition of both terms, recommendations that support software SUs in an effective internationalization process are elaborated and expressed.

1.3 Research Question

This thesis deals with the identification, analysis and description of aspects and conditions necessary for an effective internationalization process of a software SU, that, according to Oviatt’s and McDougall’s (1994) definition of the term INV, from inception ”seeks to derive significant competitive advantage from the use of resources and sale of outputs in multiple countries” (p. 49). Starting from the central research question

"How can a software start-up effectively shape its internationalization process to secure its market position and to achieve a sustainable competitive advantage?"

a preliminary theory is developed related to the topic of this study. Since the answer to the research question is complex and various parameters need to be added, major statements from the theory development for further research are taken as study propositions. These propositions are then compared with the results of a case study, which is carried out within this work. Propositions which could not be clearly defined as true are subsequently analyzed in detail. The findings obtained together with the study propositions are used in the preparation of the recommendations.

1.4 Structure of the Work

This thesis is structured in the following way. In Chapter 2, a literature study is carried out in which relevant concepts for explaining the BG, or rather INV, phenomenon is presented and discussed. In this context, propositions crucial for the internationalization process leading to sustainable competitive advantage of a software SU are introduced. Chapter 3 examines the methodology, including the research method, scope delimitations, data collection and analyses applied to the two cases of the software SUs in Chapter 4. In Chapter 5, selected propositions from the literature review are compared with the findings obtained from the case study research. A summary of this thesis and a suggestion for further research is presented in Chapter 6.

The following formatting and marking are used in this thesis.

- Study propositions are numbered consecutively and marked in[P00]to enable cross-references.
- Findings are numbered consecutively and marked in[F00]to enable cross-references.
- Proper nouns and terms introduced are displayed in italics.
- Quotes are placed in “quotation marks”.

2. Literature Review

“The question is how these firms succeed in the global market, a variable that requires innovativeness, risk taking and entrepreneurship.” (Zahra & George, 2002, p. 261)

This chapter is devoted to the theoretical basics of BG and INV and reflects relevant and related theoretical explanations and frameworks such as resource-based theory, knowledge-based view, dynamic capabilities, organizational learning, innovation theory, and international entrepreneurship. After each paragraph, the most important findings from the theoretical elaboration are summarized as study propositions. Following this, the propositions are then compared with the results of the case study carried out.

2.1 Born Globals / International New Ventures

Born globals, also known as international new ventures, emerged as a research domain in the mid-nineties with the advent of young, small and rapid internationalizing organizations (Rennie, 1993; McDougall, et al., 1994; Knight & Cavusgil, 1996; Knight, 1997). BGs and INVs are a subset of research in international entrepreneurship (IE), whose focus is on the transnational combination of innovative, proactive and risk-seeking behavior in order to create value in organizations (McDougall & Oviatt, 2000, p. 903). In this context, many different terms have been developed to describe this class of global firm, some of which have already been mentioned in Chapter 1.

The two main terms that ultimately prevailed were BG and INV, and these are often used interchangeably for the explanation of rapidly internationalizing companies (Crick, 2009, p. 453). Although some differences can be found in the concepts of the following authors, many scholars agree with the definitions of Oviatt and McDougall (1994) who introduced the term INV (see also Paragraph 1.3) and Knight & Cavusgil, (1996) who described BGs as “small, technology-oriented companies that operate in international markets from the earliest days of their establishment” (p. 11). Differences can, however, be perceived in the criteria with which BGs or INVs are described and defined (Madsen, 2013, pp. 68-69). The first criterion relates to the number of markets abroad, which can be explained using the INV types of Oviatt and McDougall (1994). They determine four kinds of INV subdivided into two dimensions, as illustrated in Figure 1. The first dimension relates to the coordination of value chain activities (see also Appendix A1), coordinated by firms across countries while including the number and the type of value-added chain activities. The second dimension refers to the numbers of countries involved in which any value chain activities occur. Furthermore, a distinction is made between the four INV types to which the dimensions are applied. Export/import start-ups and multinational traders in the two upper quadrants are also referred to as new international market makers whose activities in the value chain are limited to inbound and outbound logistics. Differences between these two groups are that export/import SUs are active in nations with which the entrepreneur is familiar, whereas multinational traders operate wherever networks are established or where they can be set up. Geographically focused and global start-ups both coordinate multiple value chain activities like technological development, human resources or production (Oviatt & McDougall, 1994, pp. 58-59).

Geographically focused SUs serve specialized needs in a few countries using foreign resources. Global SUs coordinate their organizational activities at geographically unrestricted locations and act on opportunities to acquire resources and sell outputs wherever they have the greatest value in the world (Oviatt & McDougall, 1994, pp. 58-59).

illustration not visible in this excerpt

Figure 1 Types of International New Ventures (Oviatt & McDougall, 1994, p. 59)

The second dimension provides information on the time of internationalization, which is to say, the duration of time between the founding of the company and the first international sale. The approaches of Rennie (1993), Oviatt and McDougall (1994) and Knight (1997) consider this attribute in their research. Oviatt and McDougall (1994) assume a direct internationalization, which is associated with the founding of the company (p. 49) and Rennie (1993) observes an internationalization after two years (p. 46). Finally, research by Knight (1997) reveals a period of three years after company founding (p. 57).

The last dimension, international sales, refers to the ratio of the total turnover of the company to the export of its products. In his study, Rennie (1993) speaks of 76% (p. 46). According to Knight (1997), the foreign turnover should represent at least 25% of the total sales volume (p. 34). What all approaches have in common is that they consider the time of internationalization. However, the studies of Rennie (1993), Knight and Cavusgil (1996) and Knight (1997) do not address activities abroad, while Oviatt and McDougall (1994) do not provide information on the ratio of international sales.

Based on the definitions given in Paragraph 1.1, SUs were already introduced as BG firms. With the additional consideration of the descriptions used in this section, the terms BG, INV and SU are used synonymously in this thesis and, based on the definition of Knight and Cavusgil (2004), understood as firms that, “from or near their founding, seek superior international business performance from the application of knowledge-based resources to the sale of outputs in multiple countries” (p. 124).

Based on the theory above, following study propositions are introduced:

[P01] Organize organizational activities with local market requirements, and coordinate value chain activities across countries (Oviatt & McDougall, 1994, pp. 58-59).

[P02] Focus on geographically unrestricted locations, acquire resources and sell outputs wherever they have the greatest value in the world (Oviatt & McDougall, 1994, pp. 58-59).

[P03] Receive at least 25% of the total annual sales volume from abroad (Knight, 1997, p. 34).

[P04] Seek a superior international business from or near the founding using own resources and the sale of products and services in several countries (Knight & Cavusgil, 2004, p. 124).

As already mentioned in Chapter 1, existing IB theories cannot adequately explain the formation process of INVs, to the extent that other theoretical explanations and frameworks are needed to understand the phenomenon of BGs (Cavusgil & Knight, 2009, p. 51). These include resource-based theory, knowledge-based view, dynamic capabilities, organizational learning, innovation theory and international entrepreneurship, all of which are discussed in more detail below.

2.2 Resource-Based Theory

The early and rapid internationalization of young firms is assumed to be based on specific resources and capabilities (Knight & Cavusgil, 2004, p. 124). The resource-based theory of the firm (hereinafter also referred to as resource-based view, RBV) argues that the sustainable competitive advantage of a company can be deduced from its organizational resources and capabilities (Wernerfelt, 1984; Barney, 1991; Collis, 1991). It is the management’s primary task to maximize value to an optimal deployment of existing firm resources and capabilities, while simultaneously evolving the firm’s resource base for the future (Grant, 1996, p. 110).

RBV finds its origin in the research of Penrose (1959), who regards firms as a bundle of resources. This unique bundle of resources includes anything which “could be thought of as a strength or weakness of a given firm” (Wernerfelt, 1984, p. 172) and is combined with the firm’s strategy and organization (see also Appendix A2). Resources, both tangible and intangible, can be categorized into physical capital (tangible) and knowledge-based resources (immaterial), the latter including human capital and organizational capital (Collis, 1991, p. 51). Resources “include all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm to conceive of and implement strategies that improve its efficiency and effectiveness” (Barney, 1991, p. 101). Depending on the strategy, a mix of physical capital, human capital and/or organizational capital resources is required (Barney, 1991, p. 106). Examples of resources that lead to profitability are brand names, company culture, in-house knowledge, employment of skilled personnel, geographic location, trade contacts, machinery, plants etc. (Wernerfelt, 1984, p. 172). Thus, resources can be defined as “firm-specific assets that are difficult if not impossible to imitate” (Teece, et al., 1997, p. 516). The generation of new resources is costly, which means that a firm, for the moment, must stick to what they have and live with what they lack (Teece, et al., 1997, p. 514).

In addition to firm resources, RBV also foresees the concepts of competitive advantage and sustained competitive advantage. A firm achieves a competitive advantage when it applies a value creating strategy which is not implemented by a current or potential competitor at the same time. When other companies continuously fail to duplicate the benefits of the firm’s implemented strategy, one speaks of sustained competitive advantage (Barney, 1991, pp. 102-103). Figure 2 illustrates the RBV framework whose central elements are based on research by Barney (1991).

illustration not visible in this excerpt

Figure 2 RBV Framework (Barney, 1991, p. 112)

RBV rests on the two assumptions, that resources are heterogeneous with respect to strategic resources/capabilities/endowments (Teece, et al., 1997, p. 514; Barney, 1991, p. 101) and that they are not perfectly mobile across firms. For a company to build barriers to sustainable protection through its controlled resources, heterogeneity and immobility are necessary as preconditions (Nahar, et al., 2003, p. 4). SUs may encounter barriers due to language, cultural differences and legal barriers (Blank & Dorf, 2012, pp. 113,420). To ensure a sustained competitive advantage, resources must be valuable, rare, inimitable and nonsubstitutable (VRIN) (Barney, 1991, pp. 105-106). Further details on the VRIN attributes and their conditions can be found in Appendix A2.

In the high-tech industry, competitive advantage is usually related to unique intangible resources like know-how (Oviatt & McDougall, 1995, pp. 34-37; Nowiński & Rialp, 2013, p. 197), which creates the need for highly qualified employees rather than unskilled and semi-qualified workers (Oviatt & McDougall, 1995, p. 31). Such companies possess an open and unique company culture which is receptive to new technologies and well-suited to international business (Nahar, et al., 2003, p. 8).

Based on the theory above, following study propositions are introduced:

[P05] Ensure a sustainable competitive advantage through specific organizational resources that are valuable, rare, inimitable and non-substitutable (Barney, 1991, pp. 105-106).

[P06] Building barriers through own, controlled resources for sustainable protection from competitors (Nahar, et al., 2003, p. 4).

[P07] Possess an open and unique company culture well suited to international business and open to new technologies (Nahar, et al., 2003, p. 8).

2.3 Knowledge-Based View

Since SUs, unlike established firms, after founding have limited financial and tangible resources (McDougall, et al., 1994, p. 482; Knight & Cavusgil, 2004; Tanev, 2012, p. 6), the creation of knowledge and its processing into innovations plays an important role in achieving a sustainable competitive advantage (Acs & Terjesen, 2013, p. 526). The knowledge-based view of the firm (KBV), mainly influenced by the work of Grant (1996), considers organizational knowledge maintained by individuals as the most strategically important resource of a firm (Alavi & Leidner, 2001; Grant, 1996; Grant, 1997; Nonaka, 1994), because knowledge-based resources are usually difficult to imitate and tend to be socially complex (Carlsson, 2001, p. 619). The consideration of knowledge as a resource represents the theoretical link between the two frameworks RBV (see also Paragraph 2.2) and KBV (Ariely, 2003, p. 3). KBV addresses the company’s intangible resources, especially the organizational structure, the role of management, the assignment of decision-making rights and the coordination within the firm (Grant, 1996, p. 110).

Grant (1996, p. 110) and Nonaka (1994, p. 15) follow the traditional epistemology^[2]and adopt Plato’s justified, true, belief analysis to define knowledge as a term. Conforming to this theory, truth, belief and justification are necessary and sufficient for knowledge (Ichikawa & Steup, 2012). In line with Alavi and Leidner (2001), knowledge may be seen from different perspectives. Knowledge seen as a state of mind stresses activating individuals developing their personal knowledge in order to apply it to the firm’s needs. From the perspective of an object, knowledge is regarded as an entity to be stored and manipulated. Knowledge can be viewed as a process of simultaneously knowing and acting. From the view of access to information, the firm’s knowledge must be organized to make access to and retrieval of content easier. Knowledge understood as a capability offers the potential to influence the future (pp. 109-110).

Knowledge in organizations can be divided into implicit (or tacit) and explicit (or codified) knowledge (Alavi & Leidner, 2001; Grant, 1996; Grant, 1997; Nonaka, 1994). Individuals are the principal repositories of implicit knowledge (Grant, 1997, p. 451). It consists of the concrete knowing how and is revealed by its application (Grant, 1996, p. 111). Implicit knowledge is rooted in actions, experience and involvement in a specific context (Alavi & Leidner, 2001, p. 110) and is hard to formalize and/or to communicate. Implicit knowledge is sticky and cannot be shared or transferred directly, it needs the practical usage between individuals to be appropriated (Grant, 1996, p. 111). Explicit knowledge is referred to as knowing about and is characterized by knowledge which is transmittable in formal, systematic language (Grant, 1996, p. 111). An owner’s manual of an electronic product is an example of explicit knowledge. Organizational knowledge usually originates as tacit knowledge and provides the basis to develop and interpret explicit knowledge (Alavi & Leidner, 2001, p. 112). Because of the difficulty of obtaining it, a surplus of tacit knowledge in the context of internationalization is a decisive competitive advantage (Liesch & Knight, 1999). By interacting with stakeholders in foreign markets such as customers, suppliers or competitors, the company widens its opportunities to develop new knowledge (Sandberg, 2012, p. 36). Appendix A3 describes different modes of knowledge and the coordination of knowledge within the firm.

Based on the theory above, following study propositions are introduced:

[P08] Own unique intangible resources held by individuals and considered as strategically significant resources due to their social complexity and causal ambiguity (Carlsson, 2001, p. 619).

[P09] Have a surplus of tacit knowledge for a decisive competitive advantage in the context of internationalization (Liesch & Knight, 1999).

[P10] Interact with stakeholders abroad to develop new implicit knowledge (Sandberg, 2012, p. 36).

2.4 Dynamic Capabilities

SUs are also relying on dynamic capabilities (DC) to selectively combine sets of resources, related not only to human and social capital but also financial (Nowiński & Rialp, 2013, p. 198). Essentially, DCs are an extension of RBV (see also Paragraph 2.2) concentrating on competitive implications in dynamic and global markets (Teece, et al., 1997, p. 513). As the RBV doesn’t adequately address how and why firms, operating in unpredictable and rapidly changing environments, can achieve and sustain a competitive advantage (Eisenhardt & Martin, 2000, p. 1106), Teece et al. (1997) developed a framework which analyzes the sources and methods of wealth creation in the global marketplace. The aim of this framework is “to sense and to seize new opportunities, and to reconfigure and protect knowledge assets, competencies, and complementary assets” to achieve “a sustained competitive advantage” (Augier & Teece, 2009, p. 412).

As the name implies, DC rests on two key aspects: first one, dynamic relates to a firm’s capacity to renew competences “to achieve congruence with the changing business environment” (Teece, et al., 1997, p. 515). The firm coordinates and combines these processes shaped by the firm’s tangible and intangible resources and complementary assets (Teece, et al., 1997, p. 509). Capabilities, as the second aspect, are “organizational and strategic routines by which firms achieve new resource configurations” (Eisenhardt & Martin, 2000, p. 1107). They stress the key role of strategic management in “appropriately adapting, integrating, and reconfiguring internal and external organizational skills, resources, and functional competences to match the requirements of a changing environment” (Teece, et al., 1997, p. 515). In contrast to resources, a company develops new capabilities through human capital, continuous learning and the combination of its assets (Amit & Schoemaker, 1993, p. 35). Because of their information- and knowledge-based character, capabilities are inherently difficult to imitate by competitors, which is why they are also referred to as “invisible assets” (Itami, 1987, p. 12). Figure 3 shows the formation process of a capability from the combination of tangible and intangible resources.

illustration not visible in this excerpt

Figure 3 Capabilities as Routines for the Development of Resources (Glowik & Bruhs, 2014, p. 164)

Entrepreneurs are constantly looking for potentially profitable resource combinations to gain competitive advantage over their competitors (McDougall, et al., 1994, p. 479). Global entrepreneurs rely on their strong international business networks (Oviatt & McDougall, 1995, pp. 34-37), and consequently, their networking capabilities (Cavusgil & Knight, 2009, p. 63). To overcome the usual scarcity of resources, INVs leverage the assets of well-established companies (Poole, 2012, p. 30), partner with MNEs with a global footprint (Bailetti & Zijdemans, 2014, p. 15) and use their networks to distribute their products and services in foreign markets (Tanev, 2012, p. 6). Many SUs are also called virtual firms for these reasons (Cavusgil & Knight, 2009, p. 53). Leveraging advanced IT is crucial for (digital) distribution and communication with partners or (potential) customers (Bailetti, 2012, p. 9; Tanev, 2012, p. 6; Bailetti & Zijdemans, 2014, p. 15). Capabilities rise through the integration of specialist knowledge (Knight & Cavusgil, 2004, p. 127).

Dynamic capabilities emerge from path-dependent processes, that is, a firm’s “history matters” (Teece, et al., 1997, p. 522) as regards to future decisions and developments (Eisenhardt & Martin, 2000, p. 1114). According to Page (2006, p. 97), “a process is path-dependent if the outcome in any period depends on history and can depend on their order”. In the dynamic managerial capabilities concept, which in turn extends DC, special attention is paid to superior managerial capabilities as an important source for a firm’s competitive advantage (Adner & Helfat, 2003; Andersson & Evers, 2015; Helfat & Martin, 2015; Oxtorp, 2014). Additional information on core components of dynamic capabilities and their dependence on market dynamics can be found in Appendix A4.

When BGs use ecosystems like universities or companies in the same sector, this has a positive effect on internationalization and international performance. Leading from this, the knowledge and expertise developed within such ecosystems provide a global competitive advantage. The relationships between the local operations of a company and its foreign sales offices are sources of knowledge for the specific needs of local customers and promote means for the acquisition of additional business (Tanev, 2012, p. 7).

Based on the theory above, following study propositions are introduced:

[P11] Constantly look for potentially profitable resource combinations to adjust, integrate, or reconfigure sets of resources to meet the requirements of a changing environment and to secure competitive advantage over competition (McDougall, et al., 1994, p. 479; Teece, et al., 1997, p. 515).

[P12] Use personal and business networks to access needed resources that are not owned (Oviatt & McDougall, 1995, pp. 34-37; Cavusgil & Knight, 2009, p. 53).

[P13] Use Internet, Intranet and Extranet^[3]to reduce barriers of distance and facilitate communication, coordination and collaboration worldwide (Bailetti, 2012, p. 9; Tanev, 2012, p. 6; Bailetti & Zijdemans, 2014, p. 15).

[P14] Use ecosystems such as universities, firms operating in the same industry, and foreign sales subsidiaries to gain technological knowledge and insights into the needs of local customers to achieve additional business (Tanev, 2012, p. 7).

2.5 Organizational Learning

Organizational learning (OL) provides routines and processes which serve to maintain or improve performance based on the integration of specialist knowledge (Nevis, et al., 2000, p. 120). OL refers to learning theories and the ability to adapt the firm’s knowledge base to environmental changes through learning processes (Al-Laham, 2003, p. 136). The knowledge base usually contains the intersection of individual knowledge sets and permits its sharing and integration (e.g. job rotation) within the firm (Grant, 1996, pp. 115-116). Through these processes, strategically relevant knowledge is sought, secured and used (Al-Laham, 2003, p. 136) to improve the measures (Fiol & Lyles, 1985, p. 803) and the quality of the technologies within an organization over time (Rosenberg, 1982, p. 122), thereby gaining competitive advantage (Al-Laham, 2003, p. 136). Hence, changing circumstances, the motivation to improve innovativeness or the desire for an increase in productivity/efficiency are reasons why organizations learn (Dodgson, 1993, pp. 377-378). Knowledge (see also Paragraph 2.3) and the ability to learn are considered to be organizational and strategic capabilities (see also Paragraph 2.4) (Dodgson, 1993; Smith, et al., 1996; Teece, et al., 1997). INVs use their learning advantages to acquire markets faster than more traditional internationalizing firms (Nowiński & Rialp, 2013, p. 197).

To remain competitive and innovative a firm needs to continuously develop its products and processes (Smith, et al., 1996, p. 41), which requires the potential to learn, unlearn or relearn based on the company’s past behaviors (Fiol & Lyles, 1985, p. 804). OL is “a process that occurs over time” (Argote & Miron-Spektor, 2011, p. 1124), and as a result it is path-dependent on its accumulated competences (Pavitt, 1991, p. 41). This “capacity or process within an organization to maintain or improve performance based on experience” (Nevis, et al., 2000, p. 120) is defined as organizational learning. OL is “a dynamic concept, and its use in theory emphasizes the continually changing nature of organizations” (Dodgson, 1993, p. 376). Challenges caused by deficits of tangible resources can be mitigated by superior capabilities in learning (Nowiński & Rialp, 2013, p. 200).

OL consists of organizational action, inquiry, and knowledge (Argyris & Schön, 1996, p. 15). An organization must be a rule-based political entity before its collectivity can take organizational action. And it is through these rule-governed approaches that its members become an organization capable of acting. Learning, thinking, knowing or remembering are examples of actions (Argyris & Schön, 1996, pp. 8-9). Organizational inquiry, based on the previous conditions, is the process by which the members carry out an investigation process leading to a learning product. Inquiry becomes organizational only if the members are equipped with appropriate roles and rules (Argyris & Schön, 1996, pp. 11-12). Knowledge becomes organizational knowledge in two ways. First, organizations hold environments for knowledge gained through organizational inquiry. Second, organizations can represent knowledge directly through embedding it in routines and practices. This task knowledge is also called theories of action and provides action strategies and underlying assumptions that bind strategies and values together (Argyris & Schön, 1996, pp. 15-17). A firm “which facilitates the learning of all of its members and continuously transforms itself” (Pedler, et al., 1989, p. 2) is designated as a learning organization. That requires a continuous process of organizational transformation and a climate in which individual members are motivated to learn and develop their full potential (Pedler, et al., 1989, p. 3). Appendix A5 provides an overview of various modes of organizational learning.

Many well-established companies have an administrative heritage consisting not only of intangible and tangible assets like property, plants, office facilities, communication systems but also a local company culture and long-established processes. This leads to an inertia, which limits the speed and direction of the desired strategic changes (Collis, 1991, pp. 52-53). Compared to these companies, smaller firms are unfettered by bureaucracy, hierarchical thinking and expensive existing information systems (Liesch & Knight, 1999).

Administrative heritage can also be a challenge for domestic companies wishing to internationalize. They must, as a rule, overcome a domestic orientation which consists of internal thinking and domestic decisions before they can enter foreign markets. SUs that internationalize from or near their inception need to overcome fewer barriers that may have arisen through organizational learning. Young companies without established routines that use their learning opportunities to expand internationally will grow faster than their competitors, who wait longer to enter foreign markets (McDougall & Oviatt, 2000, p. 904).

Based on the theory above, following study propositions are introduced:

[P15] Secure strategically relevant knowledge in a knowledge base to permit its sharing and integration within the firm (Al-Laham, 2003, p. 136).

[P16] Maintain or improve products and processes (Smith, et al., 1996, p. 41) through learning, unlearning or relearning based on past behaviors (Fiol & Lyles, 1985, p. 804).

[P17] Represent gained knowledge through embedding it in routines and practices (Argyris & Schön, 1996, pp. 15-17).

[P18] Keep the administrative heritage low to gain and maintain flexibility and mobility (Collis, 1991, pp. 52-53).

[P19] Use learning opportunities for rapid international growth and avoid building established routines that can have a disruptive effect (McDougall & Oviatt, 2000, p. 904).

2.6 Innovation Theory

An early internationalization or entry into a new market is often understood as an intrinsically innovative act (Knight & Cavusgil, 2004, p. 126; Zijdemans & Tanev, 2014, p. 5; Acs & Terjesen, 2013, p. 525). The two major innovation resources for BGs include knowledge (see also Paragraph 2.3) and capabilities (see also Paragraph 2.4) (Knight & Cavusgil, 2004, p. 126; Zijdemans & Tanev, 2014, p. 5). Knowledge as a source of product introductions, improvements or methods is understood as the predecessor of innovation (Knight & Cavusgil, 2004, p. 126). Innovation does not occur in isolation, but rather it depends on the interaction with external sources like the firm’s environment (Fagerberg, 2005, p. 20) and its capacity for absorbing (outside) knowledge (Fagerberg, 2005, p. 11). In view of this, it’s possible to see why SUs leverage their network capabilities such as technology alliances to increase their international competitiveness (McDougall & Oviatt, 2000, p. 905) and to overcome, as already stated in Paragraph 2.4, their scarce tangible resources. The innovation theory refers to the creation of (technological) knowledge (Karamanos, 2012, p. 71) based on inventions (Saren, 1984, pp. 11-12) transformed accordingly into novel solutions such as new processes, new products or organizational improvements (Sengupta, 2014, p. 1). An invention is “the first occurrence of an idea for a new product or process”, while an innovation is “the first attempt to carry it out in practice” (Fagerberg, 2005, p. 4). Innovation is, in particular, the domain of entrepreneurs who constantly search for new and as yet untried technological possibilities for producing a new commodity or reproducing an old one in a new way (Knight & Cavusgil, 2004, p. 126). This requires openness to new ideas and solutions (Fagerberg, 2005, p. 10) as well as the combination of several different types of knowledge and capabilities (Fagerberg, 2005, p. 5). One of the main reasons for innovation is the reduction of production and sales costs and the improvement of the firm’s performance and thus its competitive advantage and growth (Dosi, 1988, pp. 1144-1145).

Innovations can be classified as radical or incremental. A radical innovation introduces a totally new development of a product or service, and the knowledge required for exploitation is very different from the knowledge available in the company (Zijdemans & Tanev, 2014, p. 6). In an incremental innovation, new characteristics of the product are added or modified (Sengupta, 2014, p. 31). Further types of innovations are described in detail in Appendix A5. In addition, a distinction is made between Schumpeter Mark 1 and Schumpeter Mark 2 industries^[4]. Schumpeter Mark I industries are characterized by the creative destruction pattern where innovations are introduced by firms that did not innovate before (also referred to as widening). The widening pattern relates to continuous innovation activities through the entry of new innovators (also referred to as entrepreneur or s-entrepreneur) which leads to the destruction of competitive and technological advantages of established firms. New entrepreneurs enter existing industries or markets to launch new ventures with their ideas and innovations while continually disturbing the processes of the existing companies, which may in turn have negative consequences for their innovations and market positions (Breschi, et al., 2000, pp. 388-389). Schumpeter Mark II industries are characterized by the creative accumulation pattern where a few large and established companies are dominating the market. These companies are continuously innovative through the accumulation over time of technological and innovative capabilities (also referred to as deepening pattern). Through their knowledge and competences in research and development (R&D), their financial resources and their established processes in production and distribution, large established firms create relevant barriers to protect their position against new entrepreneurs or small firms (Breschi, et al., 2000, pp. 388-389). Christensen (2016) goes on to further identify sustainable and disruptive technologies. Sustainable technologies improve the performance of established products and refer to incremental innovations developed by a few large and established companies (Schumpeter Mark II industries). Disruptive technologies as radical innovations are often simpler and cheaper and lead to a worse performance for existing products, i.e., replacement of existing technologies, e.g. the change from analogue to digital photography (Schumpeter Mark I industries) (p. xix). Due to the size and culture of today's corporations, however, disruptive innovations have become difficult (Blank & Dorf, 2012, p. XIX). Perhaps this is the reason why SUs tend to pursue a differentiation strategy and develop very distinctive products with global appeal for niche markets that are too small for larger companies (Rennie, 1993, p. 48; Knight & Cavusgil, 1996, p. 21; Tanev, 2012, p. 6; Nowiński & Rialp, 2013, p. 198; Bailetti & Zijdemans, 2014, p. 15).

The development of an innovative solution is a complex process (Saren, 1984, p. 11) involving an organization’s current/previous state of experience and formal knowledge, such as learning by doing, learning by using (see also Appendix A5) or R&D (Dosi, 1988, pp. 1124-1125). Moreover, a distinction is made between innovations and imitations (Saren, 1984, p. 12). In an imitation, competitors capture the knowledge of technologically advanced companies to copy their products (Sengupta, 2014, p. 2). Imitators themselves become innovators when they improve the original innovations (Fagerberg, 2005, p. 15). Figure 4 illustrates a generalized innovation process model consisting of three basic innovation stages. Within an organizational innovation process a firm uses its innovation infrastructure like resources or networks to develop marketable products or service from innovative ideas (Glowik & Bruhs, 2014, p. 157).

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Figure 4 The Innovation Process Model (Glowik & Bruhs, 2014, p. 159)

The activity-stage level is positioned as the bottom stage and describes a series of activities performed during innovation. This process, adapted from Saren (1984), consists of five steps. In idea generation, employees search for constant product and process improvements in cooperation with customers, suppliers, competitors etc. In screening and project selection, ideas regarded as worthwhile are chosen for innovation projects in further development. The firm must consider whether the selected projects are based on existing knowledge and whether the requisite skills and resources are in their possession. Technical development and testing contains the production of the desired product or service. This also includes the development of techniques and routines which are needed for the production process. The last step includes the commercialization of the new or improved product/service (Glowik & Bruhs, 2014, pp. 154-155). The department-stage-level, located on the second stage, considers all organizational units involved in the innovation process. The innovation passes sequentially from department to department while the innovation develops from the initial idea to the final marketable product or service (Glowik & Bruhs, 2014, p. 156). The decision-stage-level describes the critical decisions that management makes during the innovation process (Glowik & Bruhs, 2014, p. 157).

Based on the theory above, following study propositions are introduced:

[P20] Use knowledge and capabilities as innovation sources (Knight & Cavusgil, 2004, p. 126; Fagerberg, 2005, p. 5; Zijdemans & Tanev, 2014, p. 5) to increase international competitiveness (Dosi, 1988, pp. 1144-1145; McDougall & Oviatt, 2000, p. 905), develop and improve products and services to secure or strengthen their own market position (Dosi, 1988, pp. 1144-1145; Knight & Cavusgil, 2004, p. 126; Sengupta, 2014, p. 1), and adapt to changing conditions or circumstances (Dosi, 1988, pp. 1144-1145).

[P21] Emphasis on an international differentiation strategy and develop highly distinctive products targeting niche markets and that are too small for large companies (Rennie, 1993, p. 48; Knight & Cavusgil, 1996, p. 21; Tanev, 2012, p. 6; Nowiński & Rialp, 2013, p. 198; Bailetti & Zijdemans, 2014, p. 15).

[P22] Consider transversal cooperation at all functional and hierarchical levels as a condition for a successful innovation process (Glowik & Bruhs, 2014, pp. 154-157).

2.7 International Entrepreneurship

The BG approach requires entrepreneurs to think and act globally from inception (Poole, 2012, p. 27; Oviatt & McDougall, 1995, pp. 34-37). Experienced top managers with a strong international outlook and international entrepreneurial orientation are a decisive success factor that contributes to the internationalization of BGs (Oviatt & McDougall, 1995, pp. 34-37; Tanev, 2012, p. 6; Nowiński & Rialp, 2013, p. 196; Bailetti & Zijdemans, 2014, p. 15). Generally speaking, top managers tend to accumulate their professional experience outside their home country, have knowledge in international sales (Nowiński & Rialp, 2013, p. 196) and leverage their established international network (McDougall, et al., 1994, p. 484). International Entrepreneurship emphasizes the growing international role played by new entrepreneurial ventures (see also Paragraph 2.1), as well as the entrepreneurial activities of branches of MNEs and established and independent SMEs in global markets (Oviatt & McDougall, 2005, p. 539), also known as international entrepreneurial organizations (IEOs), as illustrated in Figure 5 (Zucchella & Scabini, 2007, p. 3).

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Figure 5 Types of International Entrepreneurial Organizations (Zucchella & Scabini, 2007, p. 3)

IE, having emerged in the late 80s through research by Morrow (1988) and McDougall (1989), is a cross-disciplinary research domain combining the two streams – entrepreneurship and IB (Allen, 2016; Mainela, et al., 2014; McDougall & Oviatt, 2000; McDougall-Covin, et al., 2014; Oviatt & McDougall, 2005; Zahra & George, 2002). Zucchella and Scabini (2007, p. 22) and McDougall and Oviatt (2000, pp. 902-903) additionally added strategic management as a third academic discipline, as illustrated in Figure 6.

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Figure 6 International Entrepreneurship as the Union of Entrepreneurship, International Business and Strategic Management (Wach & Wehrmann, 2014, p. 14)

Entrepreneurship is “a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced” (Timmons & Spinelli, 2003, p. 47). Focusing on the right opportunities means “situations in which new goods, services, raw materials, markets and organizing methods can be introduced through the formation of new means, ends, or means-ends relationships” (Eckhardt & Shane, 2003, p. 336). Here the emphasis is on the entrepreneur’s role, which, with its general management skills, discovers and exploits opportunities through its creative and innovative behavior which then serves to create value in organizations (McDougall & Oviatt, 2000, p 903; Timmons & Spinelli, 2003, p. 65; Allen, 2016, p. 96). Figure 7 shows the differences between the position of the entrepreneur and other forms of roles such as inventors, promoters or managers/administrators (Timmons & Spinelli, 2003, p. 65).

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Figure 7 Entrepreneurial Personality in Comparison (Timmons & Spinelli, 2003, p. 65)

In contrast to domestic entrepreneurship, IE is characterized by a higher international competition (McDougall, 1989, p. 388). The research field of international business refers to “business activities that involve the transfer of resources, goods, services, knowledge, skills or information across national boundaries” (Shenkar, et al., 2015, p. 10). IB focuses on economic-based factors and internationalization as well as transaction cost theories leading to internationalization (Allen, 2016, p. 96). IB posits that the internationalization of a firm occurs after the company was founded (McDougall, 1989, p. 389). Strategic management, perceived as strategic entrepreneurship, includes assets (see also Paragraphs 2.2 and 2.3), capabilities (see also Paragraph 2.4), and business strategy when addressing commercial activities in international markets (Allen, 2016, p. 96).

Recent definitions describe IE as “a process of creatively discovering and exploiting opportunities that lie outside a firm’s domestic markets in the pursuit of competitive advantage” (Zahra & George, 2002, p. 261) as well as “the discovery, enactment, evaluation and exploitation of opportunities – across national borders – to create goods and services” (Oviatt & McDougall, 2005, p. 540). The latter definition, which could be suitable for INVs as well as large, already established companies (also referred to as corporate entrepreneurship), highlights entrepreneurial activities and value creation across national borders. Those actors, such as organizations, groups or individuals, who “discover, enact, evaluate or exploit opportunities to create future goods or services, and cross-national boundaries” are international entrepreneurs (Oviatt & McDougall, 2005, p. 540). Creativity, as highlighted in the definition of Zahra and George, is understood as the need for innovation, risk-seeking and pro-active behavior that a company requires to be able to discover and exploit opportunities in the global market (see also Schumpeter Mark I and Schumpeter Mark II industries described in Paragraph 2.6) (Zahra & George, 2002, p. 261). Appendix A7 presents the integrated model of international entrepreneurship, which is based on the work of Zahra and George (2002).

Based on the theory above, following study propositions are introduced:

[P23] Have entrepreneurs with a high degree of international experience, international entrepreneurial orientation and global vision from inception in the team (Oviatt & McDougall, 1995, pp. 34-37; Tanev, 2012, p. 6; Nowiński & Rialp, 2013, p. 196; Bailetti & Zijdemans, 2014, p. 15).

[P24] Discover and take advantage of opportunities through creative and innovative behavior to create future products or services that are outside the home market and offer cross-border services (Zahra & George, 2002, p. 261; Oviatt & McDougall, 2005, p. 540).

3. Methodology

“A case study is an empirical inquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used.” (Yin, 1994, p. 13)

3.1 Research Method

This thesis is an empirical inquiry in which the case study strategy is used as a research method. This type of strategy is used when “a ‘how’ or ‘why’ question is being asked about a contemporary set of events over which the investigator has little or no control” (Yin, 1994, p. 9). Case studies are part of the qualitative research strategies. In qualitative research, the inquirer collects open-ended emerging data with the primary intention of developing them. In contrast, quantitative research employs strategies of inquiry such as experiments and surveys, and collects data on predetermined instruments that yield statistical data. In a case study, the researcher studies a program, an event, an activity, a process, or one or more persons in depth (Creswell, 2003, pp. 13-18). One of the strengths of case studies is the wide range of evidence sources that are available, including documents, artifacts, expert interviews and observations. In this context, case studies may contain quantitative or qualitative sources of evidence or even a mixture of both. In terms of a potential weakness, it is said that case studies have less objectivity, quantifiability or robustness than other strategies, e.g. experiments or surveys in which the generalization is based on many samples (Yin, 1994, p. 8). A distinction is made between single-case and multiple-case designs. The single-case design is analogous to a single experiment and is often used to test a theory and to check whether the propositions derived from the theory are correct or if alternative explanations are more relevant. A single case can also help to gain knowledge, and consequently theory-building, or can represent critical or unique cases. Multiple-case designs are used when the study consists of more than one case. Their evidence is often considered as more compelling, while the overall study is also regarded as being more robust. Both approaches are part of the same methodological framework (Yin, 1994, pp. 38-52).

This study is a qualitative research in multiple design, which further develops the basic theory. The central research question (see also Paragraph 1.3) relates to an applied problem, namely the effective internationalization process of a software SU, which must be examined in its real-life context. The multiple design with the processing of two samples is selected to increase the generalizability of the study results and thus the external validity (Yin, 1994, p. 33). The case study is descriptive in nature, i.e. it explains a sequence and its underlying mechanisms. Since a case study inquiry is based on several sources of evidence whose data need to be converged in a triangulation fashion (Yin, 1994, p. 13), the case study in this thesis also relies on several sources such as individual interviews, company-internal documents and publicly accessible information. In addition, the inquiry benefits from the prior development of theoretical propositions (see also Chapter 2) to guide the data collection and analysis (Yin, 1994, p. 13).

3.2 Scope Delimitation

In this section, delimitation parameters are set which apply to the selected SUs to provide a common platform and a better comparability of the case studies. First, the restriction to an industrial segment is made. The software product and services market can be divided into the five major industry segments professional software services, enterprise solutions, packaged mass-market software, internet-based applications and embedded software including services. With professional software services, customized software systems are planned, built, integrated and maintained by agencies. Enterprise solutions are business applications where customer requirements are adapted and integrated by professional services. The packaged mass-market software is designed to sell software products to the public. Internet-based applications (also referred to as web-based applications) are accessed over a network and run in a web browser or on an application installed in the device (Käkölä, 2003, p. 1). Embedded software refers to programs integrated as inseparable parts of system products that also include hardware (Kukko, et al., 2008, p. 1).

Both selected SUs primarily do business in the web-based applications industry segment, and were founded as independent companies (not joint venture or spin-off) between 2010 and 2015 in the European Union.

3.3 Data Collection and Data Analysis

The data collection of both cases was based on different sources of evidence including individual interviews, company-internal documents and publicly accessible information (Yin, 1994, pp. 81-85). Multiple sources of evidence were necessary to determine correct operational measures and, as a result, to construct validity (Yin, 1994, p. 33). A questionnaire (see also Table 4 in Appendix A8) was derived from the study propositions in which both companies were asked the same questions. The expert interviews were conducted as semi-structured, focused interviews with a duration of approximately 60 minutes in the English language and were recorded. The recorded conversions were then transcribed. Documents relating to the two companies were sought on the Internet, and thereafter checked and analyzed. The various sources of the evidence were converged in a triangulated manner, described in a study with two cases, (Yin, 1994, pp. 92-93) and related to the propositions to allow a link between cases and theoretical elaboration. A case study protocol has been established and used to ensure the reliability of the study (Yin, 1994, p. 33). The protocol can be found in Appendix A8 and includes, among other things, interview questions and transcribed responses of the interviewees.

The general analytical strategy of the data analysis relies on the study propositions that were derived and identified in Chapter 2 (Yin, 1994, pp. 103-104). Within the general analytical strategy, pattern matching is used as an analysis technique to ensure internal validity (Yin, 1994, p. 33). With pattern matching, empirical-based patterns are compared with predicted ones. The empirical patterns are derived from the results of the two cases, while the predicted patterns consist of the known propositions (Yin, 1994, p. 106). These propositions are analyzed and discussed in detail, where the data comparison is not or only partially applicable.

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^[1]The two major models are to be named: the uppsala model (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977) and the innovation model.

^[2]Epistemology (from Greek meaning knowledge) is a branch of philosophy that investigates in the origin, methods and limits of human knowledge (Ichikawa & Steup, 2012).

^[3]Intranets and Extranets are web-based functions like the Internet, but their content is restricted to authorized users. Intranets are limited to employees and other internal members whereas extranets refer to content for suppliers, partners and other external members (Hartmann, 2003, p. 42).

^[4]The terms Schumpeter Mark I and Schumpeter Mark II have been introduced and used by Nelson and Winter (1982) to describe Schumpeter’s theoretical models of innovative activities.

• Universidad: Berlin School of Economics and Law (Berlin Professional School)
• Curso: MBA Master Thesis
• Calificación: 1,5
• Autor: Timo Mueller (Autor)
• Año de publicación: 2017
• Páginas: 70
• No. de catálogo: V374423
• ISBN (Ebook): 9783668519688
• ISBN (Libro): 9783668519695
• Idioma: Inglés
• Etiqueta: Software Start-Up Born Global International New Venture Internationalization Process International Entrepreneurship Descriptive Case Study