Week 3: Models and Patterns of SME Internationalisation

Question 1

Models and patterns of internationalisation can be distinguished among which four factors?

Answer 1

Degree, speed, scope and pace

Question 2

Define speed.

Answer 2

How soon after formation an SME decides to go international. Speed is associated with early. It means the firm goes international early in its lifetime.

Question 3

What is gestation?

Answer 3

The period between company formation and its first export/foreign sale.

Question 4

What is international experience?

Answer 4

The period between first export/foreign sale and today.

Question 5

Define scope.

Answer 5

How complex the international venture is. Scope can be narrow or wide. It includes product, markets and customer.
Products include number of different products and and number of product lines. Markets include few, many and proximity. Customer includes number of segments, number of industries or sectors.

Question 6

Define pace.

Answer 6

Pace refers to how quickly the scope-related configuration occurs. It is about how fast the scope happens. One product to one customer segment in one market. How quickly are new products added? How quickly are new markets added to the configuration? How quickly are various customer segments served?

Question 7

Define degree.

Answer 7

Degree is to what extent international sales revenue makes up overall revenue. It is typically measured as a propotion of the sales revenue derived from international sales. Degree may also refer to the amount of investment and commitment the company is willing to channel towards internationalisation.

Question 8

What are the two traditional incremental models?

Answer 8

Uppsala Model and Innovation Adoption Model

Question 9

What is the Uppsala model of internationalisation?

Answer 9

Firms first choose to enter nearby
markets with low market commitment. It is a gradual involvement in foreign markets characterised by increasing commitment and escalating investments.

Question 10

What is the innovation adoption model of internationalisation?

Answer 10

A traditional stage model showing the stages of exporting. 
Stage 1 = Uninterested Nonexporter
Stage 2 = Interested Beginner
Stage 3 = Explorer
Stage 4 = Experimenting Exporter
Stage 5 = Semiexperienced Exporter
Stage 6 = Experienced Exporter

Question 11

What is an uninterested exporter?

Answer 11

Firm is not currently exporting and is not interested in exporting.

Question 12

What is an interested beginner?

Answer 12

Firm is interested in exporting and is prepared to fill unsolicited orders, but makes no effort to explore the feasibility of exporting.

Question 13

What is an explorer?

Answer 13

Firm is interested in developing exports and actively seeks to explore export feasibility.

Question 14

What is an experimenting exporter?

Answer 14

Firm attempts to solicit overseas business and exports experimentally primarily to countries that are physically and/or psychically closer to NZ

Question 15

What is an experienced exporter?

Answer 15

Firm is an experienced exporter and constantly explores the feasibility of exporting to additional countries that are physically and/or psychically distant

Question 16

Define an international new venture.

Answer 16

A business organisation that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.

Question 17

Define born global.

Answer 17

A new breed of international firm, in that exporting was the primary goal of the firm even upon its inception.

Question 18

What are the four factors of network-based internationalisation?

Answer 18

Cohesion, solidarity, commitment, and demand-driven