The use of multiple export channels by small knowledge‐intensive firms

Abstract

A transaction cost analysis model of the situations in which small knowledge‐intensive firms use multiple distribution channels to serve a foreign market is developed. The central argument is that integrated modes are generally preferred, as they facilitate protection of knowledge‐based assets and the provision of high levels of customer service and support. However, it is hypothesised that either plural or hybrid selling may be used, if assets can be protected in other ways, as a response to environmental diversity, when sales volumes are sufficient to support multiple channels, and in relatively mature markets, where sales growth has started to plateau. Data gathered from Canadian software developers generally support these propositions. The results help the managers of knowledge‐intensive firms to identify some of the circumstances in which multiple export channels might be deployed to enhance sales performance in a foreign market.