Balancing Internal and External Resources
Internationalizing the Small and Medium Sized Firm – four cases
In a young SME the management and/or founders normally play a crucial role both in the general strategic processes as well as in the everyday work, this is also supported by Jansson (2001). Furthermore, being in a start-up phase normally implies that key persons in the organization are still focused on the home market/developing the product. In the case of Avanza, Glocalnet and Projectplace it is evident that the home market was still growing considerably when their internationalization process started and thereby also attracted a lot of focus from the management in each company. This is natural since the home market plays a very important role. In this situation it is hard to optimally use the internal resources/competencies in the international expansion process. Avanza said that they were not able to spare more resources for the internationalization process. Internationalizing is in many degrees building the company again or as Stefan Krook at Glocalnet said: “Our objective was to build another Glocalnet”. The authors mean that it is of major importance to take advantage of the knowledge and experience of a company’s key personnel in the internationalizing process. These persons have successfully built the company once in the home country and know the business inside out. They most likely possess qualities that will be more than useful in the internationalization process. This can be compared to the statements by Zahra et al (2001) who stress that taking advantage of the learning process when internationalizing is one of the most important success factors. In the case of Edgecom they state that one of the reasons for their success is that they sent out key persons to help facilitate the opening of a new office. They also said that they would probably take this a step further by sending out an internal expansion team if they would expand again.
Using external advice can be tricky. Evidence from the literature (e.g. Johansson 1990) suggests that SME’s can benefit from using consultants in the internationalization process. The authors of this thesis agree with this fact, but stress the difficulties involved. It is hard to judge if the competencies sought are matched by the consultants. The case of Avanza confirms this problem. They hired management consultants to assist the set-up of their German branch. It later showed that these consultants lacked the desired competencies, and their participation was almost experienced as unproductive. Furthermore, it was very expensive.
