Critical Analysis of ‘Entrepreneurship goes Global’
The article “Entrepreneurship goes global” by Neri Karra and Nelson Phillips presents a new type of company emerging in the 21st century, namely entrepreneurships, which have at least 25 percent of their sales in foreign markets and do not concentrate on the domestic market where they have been founded. These entrepreneurships according to the authors of the article are different from their ‘old school’ counterparts by expanding globally from day one and taking the challenge of competing in an internationally dynamic environment.
First reading the article one can become overwhelmed by the courage of those entrepreneurs who decided to operate globally and achieve a huge success on the market. However, looking at this piece of writing from a more critical point of view, the reader can observe several explicit and implicit assumptions the authors make on which they build their arguments why global entrepreneurships succeed. Furthermore, there are a number of biases that need to be discussed, which in my opinion undermine the reliability of the paper.
Hebbert (1998) lists factors like “increasing integration of the productive process, […] lowering or removal of institutional barriers to international trade and the flow of capital, […] technological advance and communication which has considerably lowered the cost of going global” as the driving factor for entrepreneurships going global. Another example for identifying the driving factors of internationalization comes from the article of Lewitt (1983) ‘Globalization of Markets’ arguing that the main driving force for going global lies in technology, which triggers a chain reaction of better communication flow, transportation and reduced world prices. Moving now to our article of ‘Entrepreneurship goes Global’ (2004) listing changing market factors, technological innovations, lower communication and transportation costs and the importance of alliances as driving factors of the internationalization of entrepreneurships can be considered a cliché in the 21st century when talking about global business. The role of the above mentioned driving forces are indeed crucial for helping business spread across the borders, however, there are more to be spoken about when it comes to discussing the success dashboard of entrepreneurships. The emphasis is put on the word entrepreneurships since they are much different from multinational conglomerates, which play the business game according to other rules.
Most of the entrepreneurships fail in the first or second year of their operations, and those which actually succeed and start making profit are already seen as miracles today due to the fierce competition that is present today on the markets. Going global is not as easy as it is presented in this article. First of all, the article deals with a company that is present in the fashion industry. There are two examples given in the paper and both come from the fashion market, the Turkish leather bag company and the Portuguese footwear company. Let us now dig a little deeper in the type of business Neri Karra and Nelson Phillips chose as examples for their article, namely the fashion industry. Fashion is all about creativity, gut feeling for the next trends, hence there are virtually no barriers that prevent anyone from entering. Here lies the main assumption upon which the article is built: the authors assume that entrepreneurships are the same and can operate according to the same etalon like the one does in the fashion industry. This is not true however. Companies face different challenges tailored by the market dynamics to the features of the business and the reasons for that are manifold. The success of an entrepreneurship can depend on billions of factors like, the knowledge and skills of the entrepreneur, the strategy the company is using, the capital raised for entering the market, the demand, the cultural link between the...
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