What Is The Feasibility Of Small-Scale Businesses In Going Global?
What Are The Factors Essential For Making The International Expansion?
What Are Challenges Facing The Australian Small Business Enterprises In Internationalisation?
What Could Be Some Possible Recommended Strategies For Going Global Of Small Business Enterprises?
In recent time, small business enterprises are facing the issue of going global as in international market; they are facing stern competition against the large market giant. Before entering the international marketing, the small business enterprises should do the market research where they can understand the situation of entering the market. Understanding the international customers are needed to tap into the expertise creating the blueprint of the products development and marketing strategy (Vahlne and Johnson 2017). The factors like unfamiliar cultures in the international market and the physical distance among the places are creating issues for the small business enterprises. In addition, small businesses need to learn about the prospective customers and the customer base of the organisation (Brandenburg and De Wit 2015). Small businesses of Australia shares almost 44% of the employment and in the foreign market, it can help to enlarge the business. The small business enterprises have been facing the issue of globalisation efforts of report, communication and track to impact heavily on the foreign market. Small business is facing the issue tariffs and export fees. The small businesses have small capital and financial planning is necessary in order to go global. This study aims to find out the factors that influence Australia based small businesses on internationalisation.
This research will recognise the ways through which the small business enterprises can penetrate to the global market. In a previous time, it was easier to expand the business at the global scale (Knight 2015). In recent time, the domestic market is becoming saturated and in numbers of competitors is increasing by leaps and bound. Domestic market can boost the short-term sales and many of the foreign companies are entering the domestic market making the market red ocean for the small business enterprises. Therefore, the organisations can bring innovative product concept in order to be global. With the advent of globalisation, it has become very easy to reach the global market; however, organisations are facing the issue of entering the global market considering some of the factors. Small businesses need to draw up the budget of the internationalisation and they can make partnership in order to enter the international market (Piekkari et al. 2014). This study will try to focus on the factors like capital requirement, product specification market analysis and infrastructure to recognise the optimal situation for the small business enterprises for making the global expansion.
Internationalisation of the business is the process of enhancing the involvement of the organisation in the international markets. The organisations must have an idea of international culture while trading in the international market. The organisations mainly appreciate the values, behaviour, beliefs and business strategies of various international markets in order to be able to internationalise successfully (Islam 2017). In addition, small business and entrepreneurs also have an ongoing concern for maintaining the quality of the products and services, innovation and commitment for corporate social responsibility.
Small businesses want to have first-mover advantage and it is basically penetrating into the market and gaining all the advantages of being the first to be there. The small businesses are trying to be able to be the first in a new market as early adopters get a competitive advantage as there are limited competitions. Small businesses can gain the growth as the small businesses start locally and they grow from the foundation. Internationalisation increases sales in consecutive manners and it helps to increase the customer base (Menzies 2017). The small businesses can have a small home market and by expanding the business internationally, it can have large international market through expansion from the very beginning. Additionally, small home market means the short supply of the customers and internationalisation provides large profitability along with long-term security to the small businesses (Cavusgil and Knight 2015). Expanding to the global market helps the small business to have greater economies of scale.
Mercantilism theory as developed during the 16th century and it is one of the oldest theories of internationalisation. As stated by Vaggi and Groenewege (2016), a country’s wealth can be determined by the amount of its gold and silver it is having. The school of Mercantilist theorists believed that countries must increase its hold of gold by increasing its imports and exports. The country needs to focus on trade surplus that is the value of the exports needs to be greater than the value of imports. The country needs to avoid the trade deficit. Adam Smith coined the word Mercantilism and he proposed that the economies always try to enrich the wealth by restraining the imports and inspire the exports. Free trade can benefit both parties, both exporters and importer. In a country like Germany, Singapore and Japan follow this theory and small businesses are following neo-mercantilism theory. As opined by Burns (2016), in neo-mercantilism theory, small businesses maximise the benefits to the interest of higher prices for products traded abroad, the stability of supply and stability of price.
Porter Diamond theory designs to provide assistance to understand the competitive advantage of the business due to some factors available to them. The condition of the country regarding the production factors such as infrastructure and production factors which are relevant for gaining the competitive advantage in industries; resources are segregated into human, material and knowledge resources (Raisi 2015). The organisations may need capital resources along with infrastructure. In addition, demand condition can influence the shaping of the factor condition. Home demand condition can influence the direction and peace if innovation. Home demand is mainly determined by the mixture of customers’ needs and wants, the scope and growth rate. The supporting industries should be there for gaining the competitive supplying as it can reinforce the internationalisation and innovation. Along with the suppliers, it provides importance to the complementary products. As state by Cassar et al. (2015), when an organisation want does the international expansion, it must follow the structure and rivalries. They need to manage the domestic competition along with the cultural aspect of the different nations with management structure.
Small business enterprises can face the issue of an external factor of global financial crisis as internationalisation needs solid financial ability. The issue of the global financial condition should be addressed within the context of the global scenario. According to Cavusgil and Knight (2015), a global financial crisis can change the monetary system; therefore the direct expansion of the brand cannot be possible. The global financial crisis began in 2008 and after the crisis; small business enterprises got tons of opportunities. Moreover, the small business organisations can face the factors of the infrastructure of the business in the domestic market as well as the international market. The infrastructure of the business supports the government support and industry condition of the country. Organisations can be pulled into becoming the exporters as the other organisations in the same industry have established the relationship in the foreign market. As opined by Burns (2016), many of the knowledge-based organisations reach the competitive advantage due to the infrastructure factors as they have achieved the competitive advantage by following mutually supportive interaction. The congenital factors of psychic distance and entrepreneurial spirit of small business enterprises create an impression of the internationalisation strategy. The small business enterprises are influenced by external and internal situations and stimuli. The entrepreneurs may have a difference of knowledge and it is the key to make a judgement and coordinate resources to make a strategic decision.
Multi-domestic strategy: The organisations need to sacrifice the efficiency for emphasising the responsiveness to local needs within the markets. As opined by Alden and Nariswari (2017), in multi-domestic strategy, organisations try to gain the local responsiveness through customising both marketing strategy and the product offering to match the national condition. For instance, Heinz takes local preferences in some of the international spheres.
Global strategy: The organisations can use global strategy when it sacrifices the local needs within each of the markets to favour of emphasising efficiency. Global strategy gains economies of scale by giving the same products and services to each market. Minor modification is done in order take the global strategy. For instance, Microsoft takes the global strategy as it offers similar products in each part of the world.
Transnational strategy: This is a middle ground between multi-domestic strategy and the global strategy (Menzies 2017). The organisation does a balance between the local preferences and desire of efficiency within the various countries. McDonald’s does the transnational strategy as it offers a different kind of food products to the same brand name.
Research philosophy is the belief through which the data about a subject is gathered, used and analysed for the research purpose (Lewis 2015). There are mainly three types of research philosophy; realism, interpretivism and positivism.
In this research, the researcher will select positivism research philosophy. Positivism research philosophy takes the factual knowledge that is gained through the observation. Positivism philosophy collects the data through the scientific process. The researcher will collect the data based on internationalisation factors of small businesses and the collection and interpretation of the data is the objective way. Positivism research philosophy depends on mainly quantifiable observation and it leads to the statistical analysis. The researcher will concentrate on facts of the small businesses’ internationalisation.
The research approach is the procedure and it consists of the stages of broad assumption about detailed data collection method, interpretation and analysis (Taylor et al. 2015). There are mainly two types of approaches, inductive approach and deductive approach.
In this research, the researcher will select the deductive research approach as there is sufficient amount of existing literature present about internationalisation. Deductive research approach does generalisation from the general to the specific. The logic is about deductive inference and the researcher will deduce the concept from the existing theories. The deductive approach will be helpful to collect the data and to evaluate proposals. The researcher will start from the theories and they will find compelling the test and its implication with the data.
The research design is the systematic process of collecting the data (Mackey and Gass 2015). The research design is mainly three kinds, exploratory, explanatory and descriptive research design.
Descriptive research design will be chosen by the researcher. The descriptive research will be helpful to collect the data and analyse the data from the participants’ point of view. It is the accurate way to collect the data from the participants. The researcher will choose the process of the observational method and the researcher will view and record the participants’ views. The main aim of the descriptive research design is to evaluate the problem statement (Silverman 2016).
In this research, both primary and secondary data will be used to meet the objectives of the study. Secondary data will be collected from the various secondary sources like books, journals, websites, articles, online magazines, government reports and organisational websites. In addition, primary data for this research will be collected through conducting the interview. The interview will be conducted via Skype. The researcher will make 8 open-ended questions in order to take the structured interviews of the participants. The researcher needs descriptive data in order to find out the factors of internationalisation of the small business enterprises. The researcher will call to the small business enterprises to take the permission of the Skype interview and the interview will be recorded.
The researcher will select the sample population as the operational managers of small business enterprises in Australia. It will be difficult to find out the small business enterprises’ managers. The researcher will take help of social networking sites in order to find out the managers. The operation managers of small business enterprises of Australia are the sample population. The sample size will be only three. The researcher will keep the sample size smaller in order to reduce the complexity of the data collection. The sampling technique of the research will be non-probability sampling as the sample will be selected based on the subjective judgement rather than random selection.
|
Sample Population |
Sample size |
Sampling technique |
Sample Frame |
|
Operation managers of small business enterprises in Australia |
3 |
Non-probability sampling |
Through Skype |
Table 1: Sampling technique
(Source: Developed by the researcher)
In this research, the researcher will focus on qualitative data analysis. Qualitative data are descriptive or subjective data. Interview-based data will be analysed through thematic data analysis. The researcher will segregate the data by themes. There will be five themes in the data analysis section. Each of the themes will be backed by a table or graph. Thematic data analysis emphasises on examining, pinpointing and recording the data (Flick 2015). The themes will be developed to meet the existing research questions.
This research process will be associated with human participants. The ethics of the research are the norms that the researcher will follow throughout. The researcher will take permission from the university before conducting the research and him researcher will fill in the ethics form in order to conduct the interview process. The researcher will send emails with consent forms to the operation managers of the small business enterprises. The researcher will follow the Privacy Act 2014 of Australia and any kind of data breach will not be done. The data will be collected only for research purposes. The researcher will not do any kind of coercion and the researcher will maintain the confidentiality of the participants.
The limitations of the study will be a budgetary constraint as the researcher may need some access to the journal articles which are premium. The researcher may face the limitation of time constraint as the researcher may not be able to continue the research process for long. In addition, the limitation of the study may be the sample size as the sample size is only 3. The researcher will not be able to collect the data through the interview from large numbers of people as it is not feasible. It is not easy to make the managers agree to share their views on internationalisation. The researcher needs to handle a large amount of data for this research as secondary research and primary research both must be analysed.
|
Activities |
Week 1 |
Week 3 |
Week 5 |
Week 7 |
Week 9 |
Week 11 |
Week 12 |
|
Selection of research topic |
? |
||||||
|
Reviewing the problem statement |
? |
||||||
|
Literature review |
? |
||||||
|
Collection of data through interview |
? |
||||||
|
Data analysis |
? |
||||||
|
Drawing conclusion and recommendations |
? |
||||||
|
Final submission |
? |
Table 2: Gantt chart
(Source: Self-developed)
References
Alden, D.L. and Nariswari, A., 2017. Brand Positioning Strategies During Global Expansion: Managerial Perspectives from management Market Firms. In The Customer is NOT Always Right? Marketing Orientations in a Dynamic Business World(pp. 527-530). Springer, Cham.
Brandenburg, U. and De Wit, H., 2015. The end of internationalization. International higher education, (62), pp.23-34.
Burns, P., 2016. Entrepreneurship and small business. London: Palgrave Macmillan Limited.
Cassar, G., Ittner, C.D. and Cavalluzzo, K.S., 2015. Alternative information sources and information asymmetry reduction: Evidence from small business debt. Journal of Accounting and Economics, 59(2-3), pp.242-263.
Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities perspective on early and rapid internationalization. Journal of International Business Studies, 46(1), pp.3-16.
Cumming, D., Fischer, E. and Peridis, T., 2015. Publicly funded business advisory services and entrepreneurial internationalization. International Small Business Journal, 33(8), pp.824-839.
Flick, U., 2015. Introducing research methodology: A beginner’s guide to doing a research project. London: Sage.
Islam, T., 2017. Practices of Cross-Cultural Etiquette and Communication in Global Business-A Conceptual Analysis on Managing Corporate Expansion: A Review Study. J Bus Fin Aff, 6(280), pp.2167-0234.
Knight, J., 2015. Five myths about internationalization. International higher education, (62), pp.34-39.
Lewis, S., 2015. Qualitative inquiry and research design: Choosing among five approaches. Health promotion practice, 16(4), pp.473-475.
Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Abingdon: Routledge.
Menzies, S., 2017. Networking impact on internationalization of SMEs. In Scientific conference on economics and entrepreneurship SCEE’2017, p. 72.
Piekkari, R., Welch, D. and Welch, L.S., 2014. Language in international business: The multilingual reality of global business expansion. Edward Elgar Publishing.
Riasi, A., 2015. Competitive advantages of shadow banking industry: An analysis using Porter diamond model. Business Management and Strategy, 6(2), pp.15-27.
Silverman, D. ed., 2016. Qualitative research. London: Sage.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A guidebook and resource. New Jersery: John Wiley & Sons.
Vaggi, G. and Groenewegen, P., 2016. A concise history of economic thought: From mercantilism to monetarism. Berlin: Springer.
Vahlne, J.E. and Johanson, J., 2017. The internationalization process of the firm—a model of knowledge development and increasing foreign market commitments. In International Business (pp. 145-154). Abingdon: Routledge.
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