Differences between Old and New Born Globals in eCommerce

Topics: International trade, Internet, Globalization Pages: 23 (6777 words) Published: May 10, 2009
The “New” Born Globals within the E-commerce; do they differ against the ”Old” Born Globals when it comes to internationalization and do they use different strategies when going global?

Mikael Englund

International Marketing, University of Halmstad, Sweden

Gustav Hägg

International Marketing, University of Halmstad, Sweden

Adam Svensson

International Marketing, University of Halmstad, Sweden


This article was written to shed a light on the rapid change that is appearing in the way of conducting business on the global market. We are shifting our focus from the old marketplace to the new one on the Internet and the E-commerce. In this article the focus is on trying to describe and discuss the differences in making business that have emerged with the IT-revolution. The “New” Born Globals is a new phenomenon that has earlier been called ECC:s but with this article we want to change that and give it a new name and also a new definition that is valid for those kinds of companies. A case study is chosen as the most suitable way of conducting this research since there isn’t much research within this field and two cases have been used for making a comparison between the “Old” and the “New” Born Globals. The findings suggest that more research must be done in this field, but there are some conclusions i.e. the speed of internationalization and the resources needed that are significantly different between the two. We will later present a definition of “New” Born Globals but don’t say that this is definitive since more research in this subject must be done.


SMEs, E-commerce, Internationalization theories, “Old” Born Globals, “New” Born Globals


Born Globals is a widely used phenomenon and today when we are moving our focus from the visual marketplace to the virtual new businesses emerge and a new type of Born Globals have reached the attention of the consumers. In terms of organization age and geographic scope, there has been much scholarly research on new firms that sell in domestic markets, on established firms that sell in domestic markets, and on established firms that sell in international markets, but very little on new firms that sell in international markets (Oviatt and McDougall, 1994). The term Born Global was coined 1993 in an article by Rennie (Moen, Gavlen and Endresen, 2004). There are many definitions within this research area and one that we have as foundation for this article is made by Andersson and Wictor (2003). They define “Born Globals” as a company that has achieved a foreign sales volume of at least 25% within 3 years of its inception and that seeks to derive significant competitive advantage from the use of resources and the sales of outputs in multiple countries.

This article will focus on trying to explain the background theory of the Born Globals and then try to explore the less researched area of Born Global E-commerce companies (ECC:s). According to Foscht, Swoboda and Morschett (2006) little notice has been given, however, to smaller retailers on one hand, and not much more to the internationalization of retail companies by means of electronic commerce on the other. As global competition intensifies, an organization’s effective operational performance and strategic positioning will become more dependent upon its ability to successfully exploit information technologies. Of particular importance, in this context, is the Internet, through its high levels of connectivity, reach and adoption (Doherty and Ellis-Chadwick, 2003). At the end there will be a discussion about the two different ways of going global and see if any differences can be spotted when looking into different aspects in the internationalization process. Benjamin and Wigand (1995) argue that the Internet is creating borderless virtual business platforms on which suppliers, producers and customers can freely interact without going through the pre-defined channels on the value...
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