Internationalization Of Service Firms Research Articles

Modern tendencies and development strategies of service marketing in international markets

The article is about tendencies of the development of marketing and international strategies. Recently, the market share of services has been built up and that is why the role of importance of service marketing increasing. The service sector is still developing in the world economy and accounts for more than half of the total world production. The service industries differ from each other significantly. Service marketing strategies are distinct for local and international service companies. Service companies use marketing to position themselves strongly in a selected target market. The changing role of marketing in the service sector requires efficient management of customers, supply channels, markets, and profits. Three main trends have led to a change in the role of service marketing: The increasing importance of technological meditation, the changing role of the consumer and the professional, and the decreasing importance of the relational factor in consumer decision-making. These tendencies create a fundamental challenge for service marketing specialists to develop business strategies that incorporate dynamic changes in the business environment. Furthermore, main tendencies marketers working in service firms need to focus on 10 tendencies identified in the service sector for business success: personalization, understanding customer expectations, rehabilitee, simplicity, internationalization, packaging, rationing, vitality, and market spaces, and multidimensional competition. All of the above tendencies force marketers to adjust their strategies based on market needs and customers. Research shows that international service firms’ strategies and service marketing models provide new opportunities. In an international context, environmental factors have a significant impact on marketing strategy and the success of subsidiaries. It is important to understand the adoption needs and also to determine where and how to adopt. It has been proven that the service should be standardized at the beginning of the process because it can be done with lower costs and later adapted when the company sees its advantage. Consumers sometimes require specific conditions for adaption and information exchange to adapt to specific brands and terms of service. To implement good service marketing a balance between standardization and adaption at the international level is necessarily trying to balance the costs and benefits of adaptation assists companies succeed. The starting point for balancing external and internal factors of international companies is a correct marketing strategy. Marketing mix variables (product, price, place, and promotion) are considered in service marketing, these variables highlight the difference between the internationalization of services and goods. Product brand changes in case of service and 4P become 7P. The latter is a more complex brand design and adds additional service variables: physical evidence, process, and people. Proper management of these variables allows a firm to thrive in the service industry. External factors in the internationalization of services provide multifunctional firms with both challenges and opportunities in developing their marketing strategies. A frequently cited factor is culture, which provides information on who local consumers are, how they consume, how they select services, and how they interact with multinational firms. Market characteristics are also important for services in the adaptation process: market infrastructure, advertising, media availability, distribution structure, and market size. These features assist us to decide on standardization of adaption in marketing strategy. Another essential precursor to company standardization is competition and price adaptation, as well as promotion, which includes advertising media, sales promotion, public relations, discounts, and personal selling.  Today’s world market is characterized by high competition, despite this, service companies manage to sell their products in new markets, they manage to do this by increasing brand awareness, by developing the right marketing strategy. Recently, the volume of products sold by well-known brands in Georgia has been increasing.

Customer reference marketing in internationalizing SMEs: a service perspective

Purpose The purpose of this paper is to create a model that compares the effects of product content differentiation and service content differentiation on small- and medium-sized enterprises’ (SMEs) perceived importance of customer reference marketing in foreign markets. Design/methodology/approach A theoretical model is developed and tested through multiple regression and mediation analysis, on an effective sample of 188 Swedish SMEs. Findings The results show that foreign market business assignments characterized by differentiated services make companies relatively more dependent on relationship learning and customer reference marketing. By contrast, situations of differentiated product content correlate negatively with customer reference marketing. Practical implications Reference customers can function as vehicles for international expansion when marketing offerings are complex. The findings imply that in service settings, SMEs need to maintain learning regimes with foreign market customers to effectively use them as references to win new business. Originality/value The study applies a service perspective to explain the contingencies of customer reference marketing, particularly in international business settings. The study contributes to international small business literature and research focusing on service–firm internationalization by explaining the marketing mechanisms at play in the internationalization of SMEs. In so doing, the findings can enrich relationship and network perspectives of internationalization and add a missing link to studies on networking and internationalization.

Multinational Company (MNC) Client Influence on the Internationalization of Professional Services Firms: A Panel Data Analysis

Purpose - This paper investigates how the internationalization of professional services firms such as corporate law firms is affected by their multinational corporate clients and further explores firm-level characteristics moderating this relationship. Design/Methodology/Approach - The author has analyzed panel data on overseas branch openings of 233 U.S. corporate law firms from 1986 to 2008 using the negative binomial regression. The author also confirmed the robustness of the results by using the two-stage regression model to address some of the endogeneity issues raised in modeling the relationship between multinational corporate clients and their law firm internationalization. Findings - This study found that professional services firms such as corporate law firms are more likely to open overseas branches when they have been more dependent on multinational companies (MNCs) for their business. Moreover, additional results indicate that the effect of multinational corporate clients on the internationalization of U.S. corporate law firms varies by a particular firm-level characteristic such as firm orientation toward external expansion. Research Implications - By emphasizing existing relationships with the prominent market exchange partners (i.e., MNCs) as interorganizational antecedents of firm internationalization in the professional services sector, our study contributes to the literature on service firm internationalization and the adoption (and diffusion) of organizational forms and practices. This study also offers valuable insights for professional services industry participants and managers alike by shedding light on the interaction between the firm’s external environments and its strategy orientation.

On the internationalization of Turkish hospital chains: A dynamic capabilities perspective

How do professional service firms build the capabilities required for effective international operations? Although the internationalization of manufacturing firms is a widely studied topic, the literature on the internationalization of service firms remains scant. The problem is even more acute when it comes to studies of professional services such as healthcare organizations and hospitals. Yet, we encounter remarkable examples of international market expansion by professional service firms. In this paper, we report on a study of large privately-owned hospital operators from the emerging economy of Turkey, based on in-depth interviews with senior executives. Taking advantage of Turkey’s strategic location in the region, these firms have shown extraordinary entrepreneurial initiative expanding their operations beyond the home market over the past two decades. Even more impressive is the creative strategies these firms have been deploying in terms of market entry modes. These range from medical tourism to setting up diagnostic clinics abroad, operating full-service hospitals in key markets, management contracts, and attracting equity capital from international investment firms. We draw from the theory of dynamic capabilities in order to explain the success these firms have had in cultivating international market opportunities. We contend that it takes a variety of organizational capabilities for traditionally domestic-market focused firms to expand into international markets. We provide an integrative discussion and offer implications for advancing knowledge and managerial practice.

A Comparative Study on the Impact of the Capabilities of Manufacturing and Service Firms on Export Performance: Focusing on the Interaction Effect of R&D

This paper empirically examined the impact of firm capabilities and the interaction effect of R&D on the export performance of service firms in comparison with manufacturing firms. To this end, a total of 1,968 Korean firms were analyzed: 243 from service and 1,725 from manufacturing, and two-stage analysis was performed using multiple regression and hierarchical regression analysis. This research confirmed that network and customer capabilities played critical roles in the internationalization of service firms and R&D positively interacted with entrepreneurship and customer capabilities for export performance. These findings suggest valuable policy considerations for government trade policy and academic motivation for further research on the capabilities and R&D of service firms.

Taking services to foreign markets: A taxonomy of Brazilian service firms

AbstractThis study develops a taxonomy of international service firms from an emerging market, Brazil, and assesses whether there are significant differences in international performance between the groups. After an extensive literature review, a survey was carried out with a sample of international service firms located in an emerging economy, Brazil. Using as a departure point two theoretical perspectives, the internationalization process theory and industrial organization theory, in addition to service dimensions extracted from the empirical service management literature, the study identifies four groups—large traditionals, generalist neophytes, solitary traditionals, and daring differentiators—based on firm characteristics, international services delivered, internationalization process characteristics, and international strategies adopted. The findings suggest that there are significant differences in performance between the groups.

Internationalization of Service Firms and Their Interactions with Socio-Political Actors

Although there is extensive research in the field of services and lately on the internationalization of services, the topic of how service firms interact with society and political organizations, during their internationalization process, remains almost untouched. As an answer to the call for further research on the interaction between service firms, society and policy makers, this paper aims to advance the knowledge by proposing an integrative theoretical view. Dissimilar to the earlier research where each study stands on a specific theoretical discipline (economic, behavioural or political science), the proposed theoretical view asserts the need for an interdisciplinary approach. The integration of these three perspectives is vital since business, policy and society have different legitimacy and dependency grounds and yet their goals and objectives have been converging over the years. Isolating these disciplines from each other is, thus, not very helpful in advancing the knowledge and understanding the conditions, motives and consequences of multinational enterprises in foreign markets. Moreover, the internationalization of services and the extent of heterogeneity in service products/solutions, from banking to retailing and e-commerce, create new challenges that need for interaction between these parties; the three pillars of our society.

The learning subsystem interplay in service innovation in born global service firm internationalization

We examine the role of learning firm-specific advantages of small and medium size (SME) service firms in their internationalization. We focus on technical services that have received limited scholarly attention. We theorize that innovative born global firms build a set of capabilities in market, internal and relational learning that will provide new knowledge configurations to undertake technical and administrative innovations. Adopting an organizational sub-system view, we posit that market learning drives other learning capabilities in the firm to contribute collectively to innovation, and in turn, international market outcomes. The findings of our study of US born global SMEs support this theorization. Market-learning capability operates in a complex set of relationships with other learning capabilities in its contribution to innovation. Interestingly, relative to technical innovation, administrative innovation makes a prominent contribution to international market outcomes. We discuss implications of our findings for theory and practice and provide future research directions.

How Home-Country Political Connections Influence the Internationalization of Service Firms

This study investigates how home-country political connections affect the internationalization of service firms. There are conflicting arguments in the literature on the effect of political connections on firms’ internationalization with some researchers arguing that political connections have a facilitating effect while others argue that they have a constraining effect. In this paper, we argue that which effect dominates largely depends on the type of firm–because of the importance of being locally responsive to customers and heterogeneity among service firms, it is difficult to transfer and utilize the benefits of home-country political connections in international markets, as they are context-specific and home-country based. We also argue that, compared to content-oriented services, process-oriented service firms face less need for customer involvement and have a greater dependency on technical skills; therefore, the negative effect of home-country political connections will be weaker in process-oriented service firms. However, marketing capabilities possessed by the firm can help firms transfer and utilize the home-grown advantages in other countries, which can positively moderate the relationship between political connections and internationalization. We test our hypotheses using data on a sample of publicly listed service firms in China from 2012 to 2016 in a dynamic panel model.

Marketing Challenges and Strategies for Internationalization of Service Firms

This study aims to look back on literature related to internationalization process of service firms. In this regards, the emphasis is on marketing challenges and the target (and motivator of this study) is identification of the suitable strategy to succeed in facing these challenges. In the other word challenges in the path of internationalization of the service firms are identified and relevant entry mode and strategies to cope with those challenges are presented.

EXPLORING RELATIONSHIP BETWEEN ORGANIZATIONAL LEARNING AND INTERNATIONAL BUSINESS PERFORMANCE

International Corporations globally are seeking ways of being ahead of other competitors in the industry of operations. Companies ranging from production to service firms in globally strive harder to meet the challenges posed to them by environmental changes. Also the consulting industry is an integral part of service industry due to the sum they contribute to the growth of the economy. The study tried to situate positions whether organizational learning could serve as a strategic tool for enhancing organizational performance as regards employee commitment and organizational competitiveness. 240 copies of questionnaire were administered to selected international audit service firms considered for the study in Nigeria to get primary data that treated appropriate research questions and hypotheses were tested accordingly. The study found that opportunity for individual learning makes employees in the global firms to be committed and that organizational conditioning has significant effect on competiveness. The study recommends that international service firms should endeavour to direct more resources to the area of organizational learning in order for them to be able to achieve better global industry relevance.

Uber technologies Inc.: re-entering the South Korean Taxi hailing service after the eviction

Subject Area Competing in Emerging Markets; Internationalization of Service Firms; Global Marketing. Study level/applicability Senior undergraduate or graduate students in business schools. Case overview Uber first entered the South Korean taxi hailing service in Seoul in September 2013. In March 2015, the company shut down its operations after being charged for operating an illegal service. However, in January 2016, Uber decided to re-launch Uber’s premium service, UberBLACK after working with the city government. Given the country’s unique characteristics, was the decision to re-enter the market justifiable? Would Uber’s new strategies including partnering with a local company be sufficient? How could Uber gain more market share against its local powerful competitors? Expected learning Outcomes This case allows students to understand the challenges of internationalizing services of a global company in an emerging market that has strong national cultures and domestic preferences. The students will learn how to analyze the country and industry external environment as well as internal resources and capabilities to formulate the appropriate market entry strategies and to effectively implement them. The students will also learn the critical role of host country government and how to manage its relationship, the first- and second-mover advantages/disadvantages and the sustainability of innovative business models. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 11: Strategy

Social capital in service-oriented firms: future directions

This collection aimed to provide a broader picture of the implications of social capital in service-oriented firms. In this piece, we identify trends for future research on social capital with a focus on the services industry, an important sector of the economy. We focus on three future directions: the internationalization of service firms, social capital for service-oriented social enterprises and public policy programmes to create social capital, particularly in the context of Asia Pacific. We then identify how the contributions to this collection are related to these future directions to encourage more confirmatory work in this dynamic field of research and practice on social capital in service-oriented firms in the Asia Pacific region.

Internationalisation at home: The internationalisation of location-bound service SMEs

This study explores how location-bound service small- and medium-sized enterprises (SMEs)—such as tourism companies—internationalise. We suggest that key dimensions in the internationalisation of these firms are the available resource base, the company network and its embeddedness and entrepreneurial capabilities, particularly entrepreneur’s language skills, global mindset and cultural awareness. We propose an internationalisation framework model supported by three illustrative case examples from Finland. The framework differentiates between passive developers, emerging developers and international entrepreneurs. The study makes several contributions. First, it provides an advanced view on the internationalisation of service firms and challenges in previously applied theories in a novel context. Second, it highlights the significance of location-bound resources in the process. Third, the findings indicate that the interplay between the resource base, company network and entrepreneurial capabilities is decisive for internationalisation. We also suggest managerial implications for both the industry and policymakers, supporting the internationalisation of location-bound service firms. Diese Studie untersucht, wie ortsgebundene Dienstleister, wie zum Beispiel KMUs in der Touristikbranche, international expandieren. Wir schlagen vor, daβ die verfugbaren Ressourcen, das unternehmerische Netzwerk, die Sprachkenntnisse des Unternehmers, die unternehmerischen Fahigkeiten, eine globale Denkweise und kulturelles Bewusstsein zu den wichtigsten Dimensionen der Internationalisierung gehoren. Durch drei anschauliche Fallbeispiele aus Finnland entwickeln wir ein Internationalisierungsmodell, welches wir vorschlagen. Das Rahmenmodell, welches zwischen passiven und aufstrebenden Entwicklern, sowie internationalen Unternehmern unterscheidet, macht eine Reihe von Kontributionen. Erstens, es erweitert unser Verstehen der Internationalisierung von Dienstleistern und fordert etablierte Theorien durch einen neuen Kontext heraus. Zweitens, es hebt die Bedeutung der ortsgebundenen Ressourcen hervor, die zum Internationalisierungsprozess beitragen. Auβerdem zeigen unsere Ergebnisse, daβ das Zusammenspiel von Ressource-Basis, Firmennetzwerken und unternehmerischen Fahigkeiten von entscheidender Bedeutung fur die Internationalisierung sind, Ergebnisse, die uns veranlassen, praktische Implikationen fur Unternehmen, wie fur Gesetzgeber vorzuschlagen, damit die Internationalisierung ortsgebundener KMUs im Dienstleistungssektor unterstutzt wird.

The role of internationalization on the IPO performance of service firms: Examination of initial returns, long-run returns, and survivability

This study examines the effect of internationalization on the initial and long-run IPO performance of service firms. The study discusses that pre-IPO internationalization of service firms contributes to the explanation of long-discussed IPO underpricing phenomenon, and underperformance of IPOs in the long-run. Sample of the study includes 1822 IPO issues conducted by US service firms between 1980 and 2009. Findings of the study suggest that international service firms leave less money on table in their IPOs compared to domestic service firms by providing significantly lower first day returns to their investors on their first day of public trading. Moreover, our findings provide evidence that 3-year cumulative abnormal returns and 3-year buy-and-hold returns of international service firms are significantly higher than domestic service firms, and international service firms outperform domestic service firms in both operating return on assets and operating cash flows in the post-IPO period. Lastly, the study documents that survival rate of service firms subsequent to an IPO issue increases with pre-IPO internationalization.

The role of entrepreneurial orientation and modularity for business model innovation in service companies

The phenomenon of business model innovation (BMI) is taking up speed in researchers' attention. Specifically service firms find it difficult to protect their intellectual property and need dynamic capabilities to invent and launch their new business models. This study on service firms' BMI applies the dynamic capability view (DCV) to understand how two capabilities, entrepreneurial orientation (EO) and modularity produce BMI. These two capabilities consider two sides of BMI. BMI relates to opportunity-seeking behaviour, creating new values and opportunity exploitation that then allows monetising and capturing value. In this respect, BMI takes advantage of the two dynamic capabilities: EO and modularity. The results of our study of 299 international service firms show that EO and modularity trigger BMI, and that EO is especially favourable for BMI in the context of high environmental uncertainty.

The Internationalization of Service Firms from Emerging Economies: An Internalization Perspective

How can service firms internationalize in the absence of significant resources and capabilities prior to internationalization? This question is important, because internalization theory has dismissed the possibility of internationalization without firm-specific advantages (FSAs) or country-specific advantages (CSAs). This conceptual study argues that resource-scarce service firms undertake FDI to access intangible resources abroad, which are then used to develop FSAs in these firms' domestic market. We call this novel service internationalization strategy domestic market-seeking internationalization (DMSI). We embed DMSI within a comprehensive internalization theory-based framework that derives testable propositions. The framework extends internalization theory by explaining generic service internationalization strategies through leveraging different types of domestic and foreign-originated FSAs. In addition, this study provides recommendations for practicing managers who face the dilemma of increasing competitive pressures to take their firm international under severe resource constraints, a challenge typical to many emerging economy firms.

Customer Interaction Uncertainty, Knowledge, and Service Firm Internationalization

Abstract Uncertainty in production processes has proven to be a useful lens through which to explain the international entry mode choices of large manufacturing firms. This paper adapts that approach to suggest that service firms determine their internationalization mode based on the uncertainty arising from their interactions with customers. In our model, service firms counter customer interaction uncertainty by deploying knowledge in two primary forms: in processes and procedures or within workers themselves. We suggest that the location of this knowledge deployment impacts the choice of which mode firms will use when they deploy their services internationally. Also, befitting the greater alternatives available for conducting business internationally for service firms, we explore and model a wider range of modes than traditionally suggested by manufacturing-centric scholarship.

Firm factors that influence internationalisation and subsequent financial performance of fashion retailers

Purpose – Grounded in the Uppsala model, the purpose of this paper is to investigate specific firm factors of fashion service retailers, which include: product category offering, firm experience (limited vs extensive) and firm size (small vs large) and examines how variations in these firm characteristics produce significant differences on three aspects of internationalisation activities; scale and scope of internationalisation, market choice (geographic and cultural distance), and financial performance (international sales and profit), and whether market choice produces differences on financial performance. Design/methodology/approach – Secondary sources were utilised to empirically investigate retailers (n=118). Information regarding product category offering, year of establishment, number of employees, countries entered, international sales, and profit were collected from retailer web sites, press releases, and annual reports. Findings – There were significant differences between product category offering and firm size in retailers’ internationalisation behaviours, and there were significant differences between product category offering and market choice in their financial performance. Variations in firm experience did not produce any significant differences. Research limitations/implications – This study extends limited literature on the internationalisation of fashion service retailers and contributes knowledge of how variations in specific firm factors produce different outcomes in terms of internationalisation, market choice, and financial performance. Practical implications – Retailers offering functional products may be more flexible in their internationalisation. Firms regardless of experience or size may consider being active in international markets because variations in these factors does not impact performance. Originality/value – This study addresses multiple gaps in retailer internationalisation literature and findings point that product category should be considered when studying internationalisation of service firms.

Internationalisation of service firms through corporate social entrepreneurship and networking

Purpose – The purpose of this paper is to explore how employing corporate social entrepreneurship and developing a network of relationships with non-governmental organisations (NGOs) can support and contribute towards the internationalisation of service firms into the base of the pyramid (BOP) markets in emerging markets. Design/methodology/approach – This research adopts an exploratory approach employing qualitative multiple case studies. Three service firms that have targeted the BOP markets in India were studied. In total, 25 in-depth interviews were conducted with multinational corporations (MNCs) and their NGO partners. Data analysis was facilitated through pattern matching and systematic case comparison. Findings – The findings reveal that, by engaging in social entrepreneurship, these MNCs have focused on the neglected needs of the BOP population, developed sustainable solutions and empowerment, and started with social value creation and postponed value capturing. The pursuit of corporate social entrepreneurship has paved the way for them to establish relationships with NGOs. While the MNCs have mainly had the technical knowledge and financial resources required, collaboration with NGOs have allowed them to learn about the BOP’s specific needs and benefit from the NGOs’ knowledge, human resources and good relationships in this market. Originality/value – This research unravels how service firms can seize opportunities at the BOP. The authors build on social entrepreneurship theory and bring new insights to the field of international business. In addition, the authors broaden the network view and show how networking with social actors such as NGOs enables the mobilisation of resources, actors and activities in emerging markets.