44 characteristics described of a BG, in which they seek networks because they mainly depend on international markets to commercialize their products or services (Freeman, et al., 2006), but also because networks go beyond in just providing knowledge. Networks enhance the learning of foreign environments, and they provide valuable information to develop capabilities (Laurell at al., 2017) to improve the company’s outcomes to reach its objectives.
2.3 NE T W OR K TRAN SI TI ON S AND IN T ERN AT I ONA LI ZA T I ON SP E ED W ITH I N
45 2000; Luo, Zhou, and Liu, 2005; Acedo & Jones, 2007; Zucchella, et al., 2007;
Coeurderoy & Murray, 2008; Musteen, et al., 2010; Casillas & Acedo, 2013; Casillas &
Moreno-Menéndez, 2014; Teixeira & Coimbra, 2014).
The start-up phase is composed by the decision to start the new venture in accordance with the entrepreneur knowledge and the initial resources obtained. In this phase, internationalization may occur through export activities, outsourcing, launching the product/service abroad or through cooperation arrangements. By developing innovative products, positioning the product in a specific niche, and developing marketing and a business strategy to commercialize the products/services across border are determinates of a pre-internationalization speed (Luo et al., 2005; Pla-Barber and Escribá-Esteve, 2006; Zuchella et al., 2007; Weerawarden, et al., 2007; Osarenkhoe, 2009; Khavul, et al., 2010; Chang & Rhee, 2011; Ramos, et al., 2011; Teixeira &
Coimbra, 2014).
During the establishment of the company, a diverse networks structure (Coviello, 2006), composed of existing and new ties including business and institutional networks are pivotal since they continue to provide physical and financial capital (Coviello &
Munro, 1997; Gabrielsson et al., 2004; Coviello & Cox, 2006; O’Gorman & Evers, 2011;
Gabrielsson et al., 2004; Gabrielsson., et al., 2008; Oparaocha, 2015; Laurell et al., 2017), product development and knowledge (Mort & Weerawardena, 2006; Laurell et al., 2017), determine on market entry and mode selection (Coviello & Munro, 1995; 1997;
O’Gorman & Evers, 2011; Vasilchenko & Morrish, 2011), as well as influencing on speed (Freeman, et al., 2006; Kiss & Danis, 2010; Lee, et al., 2012). The question relying this stage is rather the firm can generate value from the network of relationships in which they are interlaced (Nahapiet & Ghoshal, 1998), either in BGs stablished independently as well as established in incubators, ecosystems or business clusters. It is important for BGs to act towards the opportunities in a sense to reduce the liabilities, and gaining access to other strategic resources. Even tough, networks are not only way to gain resources but it facilitates the development of other resources (Coviello & Cox, 2006).
Furthermore, Zhou et al. (2007) argued that the information generated by domestic networks in the internationalization process are knowledge of foreign market opportunities. These opportunities of obtaining knowledge flows within the domestic networks influence the involvement of BGs in foreign market, inducing the establishment of foreign ties, legitimacy and credibility (Laursen et al., 2012). Equally important, the establishment of partnerships with domestic clients also helps the firms to internationalize
46 since they may help new ventures involve in activities overseas as ‘client followers’ (Bell, 1995).
As the firm reaches its growth phase, efforts must be made to expand market penetration through acquiring new customers and widening country scope for an effective and progressing internationalization (Chang and Rhee; 2011; Chetty et al., 2014;
Felzensztein, 2015; Hilmersson, et al. 2017). The speed of international expansion of a new venture in post-entry internationalization is a key issue to growth and to achieve superior performance of knowledge in technology intensive BGs (Prashantham & Young, 2011). Networks in this phase provide opportunities to increase the internationalization speed by secure initial business and encouraging firms for higher mode commitment (Zain & Ng, 2006), including the assimilation and exploitation of new knowledge (Prashantham & Young, 2011, Casillas & Acedo, 2013).
The factors influencing post-entry speed may positively support in the generation of new resources leading to increase the speed of learning and also allowing the firm to achieve new internationalization pathways providing a rapid international growth in the post-entry development phase (Autio et al., 2000; Morgan-Thomas & Jones, 2009). The level of information and influence indicates that it may increase or decrease as firms intensify existing relationships, establish new ones, and ending difficult ones (Larson &
Starr, 1993) and to overcome this liabilities, the firm must transform its networks focusing to reach international progression (Coviello, 2006; Prashantham & Dhanaraj, 2010; Yli- Renko et al., 2002).
In summary, the BGs are able to internationalize early by linking themselves to extensive, established networks, taking advantage of their resources to increase the speed of internationalization (Coviello & Munro, 1995). The early internationalization starts because the BGs are able to perceive and exploit business opportunities in multiple markets from inception through ongoing stages. Networks can speed up internationalization by making necessary resources available and also by providing access to foreign customers.
As highlighted previously this research sought to analyze the network transition and its influence on the internationalization speed of BGs within its life cycle stages.
Bringing the theoretical and empirical findings highlighted in this chapter, figure 7 demonstrate the theoretical design in which this research will follow in order to seek for empirical results.
47 Figure 7 – Theoretical Model of Network Transitions within the Life Cycle Stages
Influencing on the Internationalization Speed
Source: Developed by the Author (2019)
3 METHODOLOGY
In this section, the methodological procedures that carried out this study is exhibited. Initially a brief theoretical approach to qualitative research is made, focusing particularly on the qualitative case study. Subsequently, the description of the research steps, the criteria for the selected companies, data processing and analyses, and the methodological limitations are exposed.