In their paper (McDougal et al. 2003), examine the differences between international and domestic new ventures in more detail. In this study, international and domestic new ventures are compared by 16 firm characteristics; (international experience, marketing experience, industry experience, technical experience, and start-up experience) concern the characteristics of the entrepreneurs. The three 8 strategic characteristics are: (Strategic aggressiveness, focus on low costs, focus on innovative differentiation, focus on quality, focus on service, marketing focus, number of distributions channels, focus strategies) finally the 3 variables that describe the different industry structures are: (global integration, technological change, competitive intensity). Starting with the entrepreneurs’ characteristics, it is claimed that one would expect an INV to have a more internationally oriented management team than domestic new ventures do. First, international knowledge and experiences of management are crucial in the process of internationalization. An experienced management team is better equipped to recognize and respond to changes and growth opportunities in international markets more efficiently than managers which are only experienced in domestic markets. Therefore they will pursue opportunities beyond borders more often and more actively when they do, compared to managers without such extended international experiences. Secondly, a firm with international ambitions is more likely to actively hire internationally experienced managers or entrepreneurs as they need the knowledge and experience such managers have gained in their careers. New ventures cannot have acquired international experience in their past operations since they have just started business. Therefore they need to rely on the international experience of their entrepreneurs or managers instead. Just as with international experience, it is assumed that INVs also cope with the additional complexity of being an INV by relying on an entrepreneurial team that is more experienced in all facets of the business, such as marketing or industry experience. In case managers have previously been active in the industry, they do not need to familiarize as much with the products or services nor with the customers as inexperienced managers do. As a result, opportunities will be indentified more efficiently and more energy is available to focus on foreign market entry.
In their paper (McDougal et al. 2003), examine the differences between international and domestic new ventures in more detail. In this study, international and domestic new ventures are compared by 16 firm characteristics; (international experience, marketing experience, industry experience, technical experience, and start-up experience) concern the characteristics of the entrepreneurs. The three 8 strategic characteristics are: (Strategic aggressiveness, focus on low costs, focus on innovative differentiation, focus on quality, focus on service, marketing focus, number of distributions channels, focus strategies) finally the 3 variables that describe the different industry structures are: (global integration, technological change, competitive intensity). Starting with the entrepreneurs’ characteristics, it is claimed that one would expect an INV to have a more internationally oriented management team than domestic new ventures do. First, international knowledge and experiences of management are crucial in the process of internationalization. An experienced management team is better equipped to recognize and respond to changes and growth opportunities in international markets more efficiently than managers which are only experienced in domestic markets. Therefore they will pursue opportunities beyond borders more often and more actively when they do, compared to managers without such extended international experiences. Secondly, a firm with international ambitions is more likely to actively hire internationally experienced managers or entrepreneurs as they need the knowledge and experience such managers have gained in their careers. New ventures cannot have acquired international experience in their past operations since they have just started business. Therefore they need to rely on the international experience of their entrepreneurs or managers instead. Just as with international experience, it is assumed that INVs also cope with the additional complexity of being an INV by relying on an entrepreneurial team that is more experienced in all facets of the business, such as marketing or industry experience. In case managers have previously been active in the industry, they do not need to familiarize as much with the products or services nor with the customers as inexperienced managers do. As a result, opportunities will be indentified more efficiently and more energy is available to focus on foreign market entry.
bachelor_thesis_Veldman_Ronald.docx