Conclusion -List of Tentative Advice
Internationalizing the Small and Medium Sized Firm – four cases
In this section the authors present a short list of advice for the international process of SME’s, which can be seen as a brief conclusion of the findings in the thesis. Some of the advice is of a more general and some of a more specific nature. The advice are derived from the discussions in the previous chapters. The list is not the exhaustive ultimate recipe for success (or failure), but more as important points to consider when internationalizing. It should again be noted that the analysis is based on perceptions.
It should also be stressed that these advice are based on the observation of four relatively similar (young and high-tech oriented) Swedish SME companies having made their international expansion during a point in history which has to be considered to be rather unique. The advice might have been quite different if more traditional companies, e.g. from the manufacturing industry, had been observed. Furthermore, the cases have most certainly been very affected by the specific conditions created by the boom and the following crash which all happened during their time of expansion. If these companies had started their internationalization process during another time in history, the lessons learned most probably had been somewhat different. The advice should be viewed having this perspective. The advice are not placed in any specific order of precedence.
- Make sure that internationalization decisions follow the general strategy of the company, and not just the strategy of the venture capitalists. Try not be too much affected by the short perspective that many venture capitalists take.
- Try to use internal competencies and experiences in as large extent as possible during the internationalization process. The experience and knowledge that the company possesses from building the company on the home market shall be taken advantage of.
- If you decide for an aggressive international expansion, be aware of the drawbacks that arise from not using a more cautious step-by-step approach. A typical draw-back is that you miss out on some of the learning process that normally is very useful.
- Being part of networks in the new market is crucial for success. Important effects of a good network can be to be able to get up and running faster, make it easier to get customers, reducing the problems of lacking local knowledge etc. Having valuable networks is even more important if you want to make a fast and aggressive internationalization.
- Be sure that the international expansion takes an appropriate risk level compared to the company’s size. Otherwise the company’s entire existence can be jeopardized.
- Focus on getting customers and/or strategic partnerships in the new market before actually setting up a new office. This way the risk of the internationalization process can be reduced significantly.
- Take the time to make thorough research prior to deciding and planning for the internationalization. Make sure that the business model used on the home market is replicable on the new market. It might slow down the process and be associated with costs, but it will in many cases prove to be a wise investment of time and money.
- Use external advisory with caution. Make sure that consultants add specific knowledge to the company. Otherwise it is just a very expensive way to fill to the lack of personnel resources.
