Born Global

Topics: Skype, Internet, Multinational corporation Pages: 8 (2634 words) Published: February 15, 2013
“Born Global”

1. Introduction V?N
It all began well before the time of Christ when Phoenician and Greek merchants were sending representatives abroad to sell their goods. In 1600, the British East India Company, a newly formed trading firm, established foreign branches throughout Asia. A number of multinational companies existed in the late 1800s. One of the first to own foreign production facilities, have worldwide distribution networks, and market its products under global brands was Singer Sewing machine. By 1880, the company had become a global organisation with an outstanding international sales organization and several overseas manufacturing plants. Although multinational firms like Ford, General Motors, Chrysler, Coca-Cola, American Tobbaco, kodak, Gillette existed well before WWII, only in recent years have they become the object of much discussion and investigation. Not only the number of multinational companies has risen and attracted greater attention, however. There is a similar trend with the size and the profile of the population and hence the economy as well. We can be fairly certain that by 2030 there will be another 1.5 billion people on the planet. The World bank estimates that the world economy will grow at an annual rate of 3% up to 2030 which will result in a more than doubling of world output. These population and economic changes along with other factors such as the greater presence of multinational companies will determine the shape of the future market – the global market and the trend towards companies going global and “born global”.

2. The “born global” concept I
There are a number of terms that denominate the “born global” concept. Different scholars have used a variety of expressions with the aim of describing and commenting on this issue. The name we are using in this presentation is preferred by McKinsey&Co (1993), whereas there is a great possibility that you encounter the terms “global start-ups” (Oviatt&McDougall, 1995), “instant internationals” (Fills, 2001) or “international new ventures” (Oviatt&McDougall, 1994). With regards to the meaning of all these terms, in the view of Oviatt&McDougall (1994), a born global firm is defined as “a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries”. In other words, instead of firstly developing within a certain country and going through an international and multinational stage before appearing on the global market, these companies rather initiate their international activities shortly after their foundation. Most authors, such as Dole&Lowe (2008), claim that global firms begin international trade within two years of their establishment. Rennie (1993), who created one of the earliest reports on born global firms, distinguishes two key characteristics of such companies: the two year period for inception of exporting activities as well as the achievement of 76% of total sales through exports (however, there is no period defined for this condition). Born globals began emerging as early as the late 80s and early 90s.Similar firms can be found both in advanced economies – Australia, Denmark, Japan and USA as well as in emerging markets such as China and India. They are characterized by limited financial and tangible resources and are usually SMEs. The reason for the latter lies in the fact that these firms have to be highly flexible and adaptable in order to become global within such a short period. Also, these international new ventures tend to be formed by entrepreneurs with a strong international outlook. Their managers usually have a “borderless” view of the world and are able to look at it as an entity that resembles their marketplace. Furthermore, born globals are often at the technological edge of their industry, providing usually intangible products such as services, software and e-commerce. 3....
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