Pace
Internationalizing the Small and Medium Sized Firm – four cases
This theme presents according to the authors the most evident pattern when observing the studied companies. In all cases the speed of internationalization was perceived to be of essence. The main reason for this was that all of the companies in the study operate in industries that experienced a spectacular growth at the time of internationalization. A fast expansion would enable the companies to even further benefit from this growth. All companies but Edgecom said in retrospect that they would go more slow if they where to do it again.
It is interesting to notice that none of the companies consider themselves to be Born Globals. They all started with a domestic perspective and the thought of internationalizing came at a later stage. This is also the traditional approach, but in recent years many of the new Swedish Internet companies have started with a pure international perspective, e.g. Letsbuyit and Boo.com.
In the process of choosing to internationalize the owners of the studied companies played an important role. They were one of the main drivers behind the focus on speed. Venture capitalists normally take a relatively short perspective and want to get their invested money back as soon as possible. It was even more the case than normal, since the studied companies’ internationalization process started during the boom. This made it even more important for the investors that their companies showed high growth. The companies in the study were valued according to growth and not profitability. The more growth they showed the higher the value of the company. The investors were very keen on being part of this enormous expected growth. For example, Avanza was “courted” by many different venture capitalists more or less begging to be aloud to invest money in the expansion of the company. This, of course, had a strong impact on the company. It even more convinced the company and its management that it was the right thing to internationalize. By this discussion, the authors do not mean that it was a wrong decision by any of the companies to expand internationally. But the impact of the venture capitalists is seen as the main reason why the companies internationalized faster than what are normally the case for an SME.
