Born Global Company

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BORN GLOBAL COMPANY

Introduction

Many business started to aim at the international market with the development of the globalization. This emerging phenomenon are worthy for us to analyze and research. We should think about why the Born Global Company emerge and the characteristics of the Born Global Company.

What is a BGC?

McDougall says “Born global company refers to the business organizations that, from inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries ”[1] A more quantitative definition, from another source, describes born globals as “companies who have reached a share of foreign sales of at least 25 per cent within a time frame of two to three years after their establishment”. [2] Born globals tend to be at a young age, medium-sized, which is obtaining a sustainable part of revenue from the sale of outputs in foreign countries. Also, there are many agency has investigated the how young the global born company is. However, they have found that the average age of the global born company is within three years. The global business is on a developing stage. According to the statements, the born global must be a young firm who has gained a portion of revenue from exporting their products.

There are four reasons about why the global born company emerge. • The niche market
• Entrepreneurship
• International management experience
• Net work
The first one is the niche market. That the some organization realized that their resources and market are limited, which often happens in the countries with small domestic markets. They need to develop and focus on strategies to achieve international marketing goals to enlarge its market and make more profits. The niche market is crucial for the born global firms. The more accurate market they focus on,the more market share and more leading position they will get.[3]

The second one is the entrepreneurship. Entrepreneurship is always among the born global firms, which is summarized as hardworking, pioneering innovation, the keen-to-change, the commitment to keep-faith, and the self-correcting inclusiveness. [4] The innovation plays an essential role in the entrepreneurship. The businessman who created born global company must have this entrepreneurship inside him.

The third one is the international management experience. Competition is more fierce, which bring much benefits for the global firms, especially for managers who had working experience in abroad or who is with international background. They has outstanding profile in the industry and could give its unique knowledge and ability to look for the opportunities and develop its idea with a global vision. In addition, the company’s creativity and ability to find the optimal solutions through combining the available resources that can make the maximum value for the company is also a reason that contribute to global business.

The fouth factor, network, also make contribution to the emergence of the Born Global Company. The enterprise network is based on interpersonal relationship.This interpersonal relationship network was established and demonstrated by cluster production and specialization.[5] Many people choose to study abroad. And the relationship network in turn contributes their businesses. Some born global companies choose to set up their factories abroad in order to avoid marketing risk. Then with the development of the zone, many firms are attracted to settle overseas factories due to the supply chain.[6]

The example of the Born Global Company
Logitech, the computer peripherals company who is the one of the excellent early examples of born-global firm. Focusing first on the PC mouse, the firm was established by two Italians and a Swiss. The company’s operations and research and development were firstly devided between California and Switzerland. The firm then expanded quickly in Ireland and Taiwan. Logitech...
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