Abstract
While many models describe efforts to build brand identity, none specifies the brand identity development for small firms facing uncertainty, such as rapidly internationalizing international new ventures. By examining four such case firms informed by interviews and archival data spanning five years, this study identifies three brand identity development states: unbranded, sporadically branded, and focused branded international new ventures. Brand values, brand personality, and brand relationships are critical brand identity dimensions that manifest in the three states. A related model and propositions help explicate how uncertainty owing to psychic distance moderates the impact of decision-making logics on brand identity development. We show how the role of decision-making logic affects the prominence given to different dimensions of brand identity in the developmental states. Moreover, we reveal the associated change and state mechanism allowing for the rapid advancement of brand identity states in international new ventures.
Highlights
International new ventures (INVs), that is, firms seeking competitive advantage from the use of resources and sales in multiple countries from inception (Oviatt & McDougall, 1994, p. 49) have become increasingly common
The research question underpinning this study is: How do decision-making logics shape INVs’ brand identity development, and what is the influence of the perceived uncertainty owing to psychic distance? To address it, we ground this study on the psychic distance (Johanson & Vahlne, 1977; Sousa & Bradley, 2006) and decision-making logics (Sarasvathy, 2001), brand identity theory, and the research into branding in early internationalizing firms
We propose: P2: The perceived uncertainty owing to psychic distance moderates the relationship between an entrepreneur’s effectual decision-making logic and the brand identity states of an INV, such that the greater the perceived uncertainty owing to psychic distance, the more rapidly will use of the effectuation logic shift the brand identity development from an unbranded or focused branded INV state toward a sporadically branded state
Summary
International new ventures (INVs), that is, firms seeking competitive advantage from the use of resources and sales in multiple countries from inception (Oviatt & McDougall, 1994, p. 49) have become increasingly common. For gradually internation alizing firms, addressing psychic distance has required incrementally accruing foreign market knowledge, amassing resources, and inte grating and utilizing knowledge acquired over time (Johanson & Vahlne, 1977) Overcoming such challenges can be quite daunting for INVs owing to their pursuit of rapid internationalization (Oviatt & McDougall, 1994) and the resource constraints they face (Zahra, 2005). The contribution of the current research to international branding literature stems from expanding the knowledge of the brand identity development of INVs by incorporating effectuation theory into the study Through this approach, we show how decision-making logic in forms the different dimensions of brand identity development, particu larly in uncertain conditions. The findings provide coping mechanisms such as the most effective and appropriate decision-making logic that explores and exploits opportunities to advance the development of the brand identity in psychically distant markets
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