Break-out strategies of Chinese immigrant entrepreneurs in Australia

Abstract

PurposeThe purpose of this paper is to examine how Chinese immigrant businesses in Australia were able to shift from low return start-up businesses and move to more competitive business models targeting mainstream clientele. The research aims to identify the factors enabling a break-out strategy for these entrepreneurs and whether a horizontal or vertical break-out was achieved.Design/methodology/approachA qualitative research method with in-depth interviews is employed. Interviews were conducted with 55 Chinese immigrant business owners in Sydney and Canberra.FindingsThe analysis found that a break-out strategy depended on a range of business activities, including innovation, marketing, networking and personnel strategies. Importantly, the current research found that these resources have varying degrees of importance in the different stages of the transition to the new business model. Accumulating sufficient financial capital was a fundamental enabler for a break-out strategy, followed by the capacity to learn and benefit from the experience of social networks.Research limitations/implicationsThe current research highlights the importance of financial capital and capacity to benefit from social networks as fundamental factors in enabling a break-out strategy. The benefit of the qualitative approach in obtaining rich data needs to be offset by potential limitations on generalisability. Future research could incorporate comparison between different size businesses as well as analysing factors underpinning a failure to successfully implement a break-out.Practical implicationsThe findings indicate that business support groups and policymakers could review access to financial capital for entrepreneurs seeking break-outs, consider improving opportunities for developing capacity to utilise heterogeneous social networks, and consider pathways for improving skills acquisition amongst immigrant entrepreneurs.Originality/valueThis paper contributes to the research literature on break-out strategies used by immigrant entrepreneurs by analysing, in detail, the transition steps undertaken by ethnic Chinese entrepreneurs in the shift to more competitive business models.