Seminar 1 Morgane Remlinger B3

The international firm in a global context

In a world ever more connected and globalized, firms have to adapt theirselves and
internationalize their sales in foreign countries. Often specialized in high technologies and the
business to business relations (B to B), a new kind of firm is emerging since several years : the
international new ventures (INVs). The international new ventures are small companies which
start their growth very quickly on the international markets but they cannot be considered as
multinational firms because of their size. They take profits of the globalization to expand their
selves, outside the borders of their home country. Like any other companies, the international
new ventures are looking for profit and endurance to survive. However, the growth of the
international new ventures is certainly fast but non stable, and differs from the other firms.

Indeed, the growth of the INVs is marked by four phases, each on which can be crucial.
The first phase of growth is the birth of the firm, often caused by an opportunity discovered on
a market. The goal of the creation phase is to develop the new products, originating from this
opportunity and starting to sell it to realize the first benefits. The second phase are the firsts
commercializationS on the foreign countries. In order to be profitable, control their costs and
generate margin, INVs regularly use economies of scale. They produce in large quantities the
goods to sell at the international and save money to continue their growth. At this moment of
the growth, the resources form the young firm are very important to exploit the opportunity as
best as possible. The third phase of the INVs’ expansion is the beginning of the competitions
with the other actors of the field. At this moment, the ventures try to expand their production
on the new market, while having to watch on their competitors. The last phase concernS the
maturity of the firm in the foreign country. During this phase, the priority for the firm is to
develop synergies between its activities and decentralize its management to better meet respond
the needs of foreign markets. Nevertheless, the growth and the passage from a phase to the next
one is not automatic and linear.

Even if the international new ventures are growing up quickly, they have to solve
problems during their all entire growth called survival crisis. The survival crisis appear when
the firm doESn’t know how it haS to manage a situation during the growth. Moreover, the
impact of this kind of event can be considerable. If the problem is not solved quickly, the
company has to return on the previous phase to avoid the vicious center which can swallow it
up definitely. To fix the crisis, the venture must usE its resources and capabilities, and
Seminar 1 Morgane Remlinger B3

particularly the dynamic capabilities. Furthermore, networks can be really useful during the
crisis periods and it remains a real support for the firm. However, the well managed survival
crisis can become an enriching experience for both managers and employees of the firm.

There are several factors which help the company to grow up. Opportunities are the
starting points of the international new ventures. The creation of an INV starts from the
recognition of a new opportunity in a market and the deployment of the necessary resources for
the activity. Moreover, increasing the knowledge within the firm helps to find new
opportunities. Firstly, having good and trusty relations with the networkers allows firm to gain
in experience, knowledge and maturity to solve the crises. Secondly, the knowledge and the
experience gained during the past survival crisis can become a key for the next problems of
growth. Innovation and financial resources are also crucial as well as risk-taking. Even if the
opportunities stay the starting point from the INVs, what is the importance of the research
and development in this kind of firms? Do the managers and the entrepreneurs have to
improve their skills in R&D to find new opportunities ?

The method used in this study was to take four firms, considered as international new
ventures. The researchers have observed them during their growth, through these 4 phases. The
four companies operated in the same field and had the same profile : created during the 90’s, in
the business to business field and early internationalized. According to the study, the four firms
have followed the four phases of growth but differently from each other. All of the firms are
have passed by one survival crisis or more during their progression, but the results show that a
lack of knowledge in the field or some leadership problems may be a cause. Moreover, the more
companies progressed in their expansion, the more severe the survival crisis were, so that one
went bankrupt. Finally, the four growth phases of the international new venture are clearly
visible. They start from an opportunity, enter in foreign markets, expand and consolidate their
position. However, how can researchers conclude that there are just four phases during
the INVs growth ? For this study, they took the same kind of firms. But wouldn’t it be
different in others fields ?