This article was downloaded by: [Northeastern University]On: 25 November 2014, At: 08:54Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of Strategic MarketingPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rjsm20

Key decisions and changes ininternationalization strategies: Thecase of smaller firmsBarbara Francioni a , Fabio Musso a & Demos Vardiabasis ba Department of Economics, Society and Politics, Faculty ofEconomics , University of Urbino ‘Carlo Bo’ , Urbino , Italyb Department of Economics , Pepperdine University , Malibu , CA ,USAPublished online: 17 May 2013.

To cite this article: Barbara Francioni , Fabio Musso & Demos Vardiabasis (2013) Key decisions andchanges in internationalization strategies: The case of smaller firms, Journal of Strategic Marketing,21:3, 240-259, DOI: 10.1080/0965254X.2013.790466

To link to this article: http://dx.doi.org/10.1080/0965254X.2013.790466

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Key decisions and changes in internationalization strategies:The case of smaller firms

Barbara Francionia*, Fabio Mussoa and Demos Vardiabasisb

aDepartment of Economics, Society and Politics, Faculty of Economics, University of Urbino ‘CarloBo’, Urbino, Italy; bDepartment of Economics, Pepperdine University, Malibu, CA, USA

(Received 12 June 2012; final version received 19 February 2013)

The purpose of this paper is to examine the internationalization of Small and Medium-Sized Enterprises (SMEs) in the mechanical manufacturing sector. The focus of thepaper is on the factors affecting both the strategic choices and the changes that occurredduring the internationalization process, after the first foreign market entry. Toaccomplish this goal, quantitative research has been performed through a survey onentrepreneurs and managers of 60 Italian SMEs. The questionnaires collected wereused to perform a cluster analysis in order to identify various groups of companiesexhibiting similar behaviours. This study provided a valuable contribution to theknowledge of SMEs’ internationalization in general and of the mechanical sector inparticular, showing the importance of analysing when a firm decides to change itsmarkets or its entry mode, along a continuum of reactive versus proactive changes.

Keywords: internationalization process; international strategy; small to medium-sizedenterprises; strategic change; entry mode strategy; market strategy

1. Introduction

The internationalization process of firms has been studied extensively since the late 1970s.

Until recently, this topic has mainly been analysed with reference to multinational

corporations (MNCs) with little attention paid to small and medium-sized enterprises

(SMEs) (Jansson & Sandberg, 2008; Wright, Westhead, & Ucbasaran, 2007). However,

during the last decade (2000–10), SMEs have become the object of growing interest. This

shift of attention has manifested itself through a re-evaluation of the importance of SMEs

not only by academics but also by politicians and governmental bodies.

The purpose of the present study is to investigate the internationalization of SMEs with

particular attention to factors that influence the strategic choices and changes that occur

during the process. Although there has been growing recognition of the important role of

the key strategic decisions during the internationalization process of SMEs, like the

international market and the choice of entry mode, scholars have tended to ignore why

firms change their strategy and why a new strategy is chosen. This research attempts to try

to fill this gap by providing fresh insights into changes that occur in the

internationalization strategies after the first foreign market entry. In other words, strategic

choices are not static but evolve in the process in response to previously unaccounted

factors. Furthermore, the study carries out a cluster analysis with the purpose of grouping

the surveyed firms into four groups with similar behaviour during the internationalization

process within each group.

q 2013 Taylor & Francis

*Corresponding author. Email: barbara.francioni@uniurb.it

Journal of Strategic Marketing, 2013

Vol. 21, No. 3, 240–259, http://dx.doi.org/10.1080/0965254X.2013.790466

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

The organization of the rest of this paper is as follows. The next section presents the

theoretical background on internationalization of firms and focuses on strategic choices

and changes during the internationalization process. Then, we describe the mechanical

industry, starting with a general description of the sector and followed by a description of

Italian firms’ internationalization within the sector. Next, the methodology, analysis and

results are presented. Finally, the overall conclusions and suggestions for future research

are discussed.

2. Theoretical background

2.1 SME internationalization theories

Literature on the internationalization process of firms presents different theories and

models, including the Network Approaches (Chetty & Blankenburg Holm, 2000; Fletcher

& Barrett, 2001; Hertz & Mattsson, 2001; Johanson & Mattsson, 1988; Johanson &

Vahlne, 2003; Meyer & Skak, 2002), the International Entrepreneurship (McDougall &

Oviatt, 2000; Oviatt & McDougall, 2005a, 2005b; Styles & Seymour, 2006), the Learning

and Innovation Adoption Models (Bilkey & Tesar, 1977; Cavusgil, 1980; Czinkota, 1982;

Johanson & Vahlne, 1977, 1990; Johanson & Wiedersheim-Paul, 1975; Reid, 1981) and

the Resource-Based View (RBV) (Ahokangas, 1998; Kelliher & Reinl, 2009; Mahoney,

1995; Ruzzier, Antoncic, & Konecnik, 2006; Tallman & Fladmoe-Lindquist, 1994).

Nevertheless, as some authors stated (Coviello & McAuley, 1999; Ghanatabadi, 2005;

Jones & Coviello, 2005) these theories do not completely interpret the internationalization

process of SMEs, and an integration is necessary for a complete understanding of the

process. A certain amount of integration has been developed in previous literature, with

the majority of works focusing on the Network Theory (Hilmersson, 2009).

Some studies combined the network perspective and stage models (Bjorkman & Kock,

1997; Bodur & Madsen, 1993; Coviello & Munro, 1997; Fontes & Coombs, 1997;

Korhonen, Luostarinen, & Welch, 1996). According to these studies, network

relationships are fundamental to firms’ internationalization process (Coviello &McAuley,

1999), even if within an incremental evolution of the strategy.

Other contributions (Ruzzier, Antoncic, & Konecnik, 2006; Ruzzier, Hisrich, &

Antoncic, 2006) combined the RBV with the Network Theory. On one hand, the RBV

better fits the needs of entrepreneurs and managers inside SMEs and it could offer a

theoretical framework to encompass the internationalization of SMEs and their specific

resources (Rangone, 1999). On the other hand, the Network Theory allows the

understanding of how the problems of limited resources, experiences and credibility in the

internationalization process of SMEs may be overcome (Lu & Beamish, 2001).

An integration of the Network Theory with the Entrepreneurship Perspective has been

attempted by some scholars in the last few years, since these theories have been considered

closely connected (Johannisson & Mønsted, 1997). The Network Theory has become

increasingly employed in studies on entrepreneurship (O’Donnell, Gilmore, Cummins, &

Carson, 2001), and at the same time the field of entrepreneurship increasingly has become

common in studies on networks and relations (Jack, 2010). Coviello and Munro (1995)

highlighted the connection between network relationships and entrepreneurship during

firms’ internationalization process. According to these authors,

Network theory leads one to examine a variety of internationalization issues. These include,for example, the impact of network relationships on foreign market selection and the relativeinfluence of other firms (in both direct and indirect relationships) on new market entrystrategies. (Coviello & Munro, 1995, p. 50)

Journal of Strategic Marketing 241

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

In this study, an Extended Network Theory has been adopted mainly considering the

convergence of the Network Theory and the Entrepreneurship Perspective, since the field

of entrepreneurship allows a better examination of the role of the entrepreneur – a key

actor in small firms.

2.2 Key strategic decision and changes in SME internationalization strategies

Two of the most critical decisions in internationalization strategies of firms are those

related to foreign market selection (Ellis, 2000; Sakarya, Eckman, & Hyllegard, 2007) and

entry mode choice (Brouthers & Nakos, 2004; Lu, 2002; Root, 1998).

Since a firm’s internationalization is a process, it is dynamic and the firm’s

strategies may change over time (Agndal & Chetty, 2007). Therefore, after the first

foreign market entry, international strategies – among which are the foreign markets and

the entry methods – can be modified. However, scholars are inclined to disregard

the examination of why companies change their strategy and why a new strategy is

selected (Brouthers & Hennart, 2007; Calof & Beamish, 1995). Ellis (2000) and Petersen

and Welch (2002) highlighted the need for more research about the changes in the

operation methods in foreign markets, as previous analyses on entry modes were

characterized by a static approach based on the initial choices (Asmussen, Benito, &

Petersen, 2009).

More recently, some empirical studies (Agndal & Chetty, 2007; Benito, Pedersen, &

Petersen, 2005; Calof, 1993; Clark, Pugh, & Mallory, 1997; Kogut, 1983) pointed out that

it is not uncommon for firms to change the foreign market and/or the modes of already

established foreign operations (Asmussen et al., 2009).

According to Agndal and Chetty (2007), there are four major types of changes that can

be identified:

1. Market expansion, that is, entry into a new market or connected entries into several

new markets.

2. Market contraction, that is, withdrawal from one market or several connected

market withdrawals.

3. New high commitment mode, which is new to the firm or new to one or several

markets.

4. New low commitment mode.

Agndal and Chetty (2007) also divided changes into proactive or reactive. A proactive

change occurs when a firm actively searches ‘for new strategic options and strategic steps

taken in new directions, although neither the internal nor the external situation obviously

requires new strategic actions’ (Melin & Hellgren, 1994, p. 254). In this case the change

could be generated from a relationship with a firm or an individual known by someone in

the firm (Agndal & Chetty, 2007).

Reactive changes occur as responses to internal or external influences (Leonidou,

Katsikeas, Palihawadana, & Spyropoulou, 2007). In this context, influence could be

specifically related to relationships with firms or individuals (Agndal & Chetty, 2007).

However, this study adopts an Extended Network Perspective, arguing that not only

existing relationships may have an impact on changes in internationalization strategy, but

also factors related to the characteristics and behaviours of the entrepreneur. Therefore, we

assume that proactive changes could also derive from a particular idea, belief, skill, talent

or other character of the entrepreneur, regardless of previous relationships, including an

interest towards a culture of a specific foreign country, that stimulates the entrepreneur to

B. Francioni et al.242

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

enter into this market. Moreover, reactive changes could also stem from an entrepreneur’s

reaction to a particular internal or external condition, regardless of a previous relationship,

like in the cases of unforeseen crises in specific countries.

3. The mechanical sector

The mechanical sector has been defined as a ‘multi-sector’ (Paradisi, 2000) because it

contains firms with few relationships, producing different products in different markets,

from the manufacturing of metal doors to steam generators.

Two of the most important areas of the mechanical sector are considered – ‘the

manufacture of fabricated metal products’ and ‘the manufacture of machinery and

equipment n.e.c.’ – that are two divisions of European Classification of Economic

Activities (NACE) created by EUROSTAT.

The manufacture of fabricated metal products (code 25) is a division that includes the

‘manufacture of pure metal products, usually with a static, immovable function’ and is

considered by EUROSTAT as medium–low technology (excluding 25.4 – manufacture

of weapons and ammunition – which is considered as medium–high technology).

The manufacture of machinery and equipment n.e.c. (code 28) is a division that

comprehends the manufacture of machinery and equipment that act independently on

materials either mechanically or thermally or perform operations on materials (such as

handling, spraying, weighing or packing), including their mechanical components that

produce and apply force, and any specially manufactured primary parts. This division has

been considered by EUROSTAT as medium–high technology.

In Italy, mechanical sector employment represents approximately 10% of the whole

economy and 47.4% of the manufacturing sectors, consisting of about 60,000 firms

employing 1,600,000 workers (Federmeccanica, 2009).

In Marche, an Italian region composed of five provinces whose territories cut

horizontally across its area, mechanical sector development has been particularly stronger

and higher than in other Italian regions. This result derives mainly from the type of

mechanical specialization in Marche (for example machinery, mechanical components

and electronics, appliances) whose main divisions have received particular benefits from a

high foreign demand (OECD, 2010).

4. Methodology

In order to achieve our objectives, we decided to administer a quantitative survey to

entrepreneurs and managers of SMEs operating in the metal sector in the Marche region.

Firms were picked out from some lists obtained by industry and entrepreneur

associations. A total of 736 firms belonging to these lists were contacted by e-mail and, in

some cases, by telephone and 99 companies gave their availability for a direct interview.

However, once the interviews were reviewed and the less reliable removed, the sample

was reduced to 60 firms: 30 belonging to the 25th NACE code and 30 belonging to the 28th

NACE code (Table 1).

The survey was conducted over six months and interviewees included owners and

managers responsible for decisions on the international processes of their firms. Data

collection was performed through a questionnaire. Items contained in the questionnaire

were developed from one previous research step, individual in-depth interviews with six

Italian SMEs that undertook international development. Indeed, the qualitative step was

exploratory, in order to enhance the comprehension of how SMEs develop and even

Journal of Strategic Marketing 243

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

change their internationalization strategy and to give a basis for the realization of the

questionnaire.

The case studies also allowed the identification of several factors that can lead to a

change in international strategy, in particular a change in entry mode strategy. In addition

to the reactive/proactive changes that derive from previous business and social

relationships, there are also changes resulting from the entrepreneur’s proactive actions or

from reactions to internal or external conditions, independently from previous business

and social relationships.

Therefore, on the basis of the literature related to entry mode strategy (Brouthers &

Hennart, 2007; Davidson, 1982; Ekeledo & Sivakumar, 2004; Gatignon & Anderson,

1988; Musso & Francioni, 2009; Root, 1998; Terpstra & Sarathy, 1994; Welch, Benito, &

Petersen, 2007), to mode strategy changes (Agndal & Chetty, 2007; Asmussen et al., 2009;

Calof & Beamish, 1995; Gomes-Casseres, 1989; Pedersen, Petersen, & Benito, 2002;

Petersen & Welch, 2002) and the analysis of case studies, a framework was created to

illustrate the most significant factors influencing changes in entry mode strategic decisions

(Table 2).

5. Results

As the main purpose of this research is to identify four company profiles presenting a

different behaviour in their internationalization process, it was necessary to perform a non-

hierarchical cluster analysis, that ‘aims to identify and classify similar entities, based upon

the characteristics they possess. It helps the researchers to understand patterns of similarity

and difference that reveal naturally occurring groups’ (Malhotra & Birks, 2007, p. 670).

With reference to the results of the analysis, Table 3 illustrates how many companies

compose each cluster, with a high concentration of firms in cluster number two (28 firms)

and cluster number four (16 firms), while cluster one is composed of 11 firms and cluster

three is composed of five firms.

Table 1. Subdivision of the sample into mechanical divisions.

Div. Group Description Frequency

25 Manufacture of fabricated metal products, exceptmachinery and equipment

25.1 Manufacture of structural metal products 725.2 Manufacture of tanks, reservoirs and containers of metal 225.3 Manufacture of steam generators, except central

heating hot water boilers0

25.4 Manufacture of weapons and ammunition 025.5 Forging, pressing, stamping and roll-forming of

metal; powder metallurgy1

25.6 Treatment and coating of metals; machining 725.7 Manufacture of cutlery, tools and general hardware 425.9 Manufacture of other fabricated metal products 9

28 Manufacture of machinery and equipment n.e.c.28.1 Manufacture of general-purpose machinery 328.2 Manufacture of other general-purpose machinery 1028.3 Manufacture of agricultural and forestry machinery 628.4 Manufacture of metal forming machinery and machine tools 528.9 Manufacture of other special-purpose machinery 6Total 60

B. Francioni et al.244

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 2. Factors influencing changes in entry mode strategy.

Factors related to a reactive strategychange of the entrepreneur, whoreacts to something regarding thebusiness and social relationshipsthat he has with other companiesand/or individuals

W Intermediary/agent/distributor offers an alternativeentry mode

W The intermediary sells its products and other moreprofitable products, but not those of the company

W Decreased satisfaction with commercial Italian/foreign intermediaries/distributors

W Customers of the foreign country ask for directcontact with the company

W Customers and/or potential customers offer thecompany an alternative way to enter

W The foreign customers show loyalty to agentsW Company (also competitor) proposes to enter into

the foreign market with an alternative modeW The Chamber of Commerce or other institutions

offer an alternative entry modeW The foreign public operator makes opportunities

available for alternative modesW A friend/relatives offers an alternative wayW A foreign/Italian supplier offers an alternative

entry modeW One of the company’s employee offers an

alternative entry modeW Meeting at a trade show with a person who proposes

to launch a new entry modeW The partner in the foreign country offers an

alternative wayW The partner in the foreign country is guilty of

misconduct against the companyW The partner does not comply with quality standardsW The local producer is not qualifiedW The company has difficulty in training staff abroadW Foreign labour is too unqualifiedW Distributor and/or licensor become competitors

by copying the company’s product illegallyFactors related to a reactive strategychange of the entrepreneur, whoreacts to conditions inside oroutside the company, regardless ofbusiness and social relationships

W The method previously used reached its goal orended (e.g. contract expired)

W The method used takes too much effort and too manycosts to be kept

W The method used did not give the expected resultsW The method used is not suitable for the firm’s

operations and/or is incompatible with the objectivesW Extreme performance (positive or negative) of the

procedures currently usedW It is not efficient to serve the foreign market from the

country of originW The business was best/worst case: the firm has

more/less money to use for international operationsW The firm accumulated enough knowledge of foreign

markets/international experience that it has decidedto switch towards a more challenging mode

W There are few contractual restrictions to rescind theprevious contract

W The disinvestment costs are lowW The firm has incorrectly forecast demand in the

foreign countryW The foreign market is in decline/expansion

(continued)

Journal of Strategic Marketing 245

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Moreover, Table 4 shows the cluster to which each surveyed firm of the sample

belongs. The last column is the distance from the centroid of the reference cluster.

Table 5 displays the Euclidean distance between the centroids of the final groups: the

greater the distance, the greater the dissimilarity between the three groups. The four groups

seem close to each other, and the biggest gap is between the third and fourth, while the first

is very close to the second.

W The foreign market has entered into EU orother organizations

W The foreign country has lowered/raised tariff/non-tariff/competitive barriers

W The foreign country has a more/less risky social,political, economic environment

W The foreign country has more/less efficientmechanisms for certain institutions than in the past

Factors related to a proactive strategychange of the entrepreneur, whouses a business or socialrelationship to change entry modestrategy

W The firm identified an intermediary/agent/distributorand proposed an alternative entry mode

W The firm established a relationship with a majorcustomer/potential customer and proposed him/her an alternative entry mode

W The firm identified a potential firm (even competitor)and proposed an alternative entry mode

W The firm suggested to a friend/relative an alternativeentry mode

W The firm suggested to an Italian/foreign provider analternative entry mode

W The firm offered to Italian/foreign employees analternative entry mode

W The firm identified a potential partner to whomto propose an alternative entry mode

Factors related to a proactive changeof the entrepreneur, who uses hisspecial insight or ability to changeentry mode strategy, regardless ofbusiness and social relationships

W Entrepreneur’s perception of the need to changeW Desire to have more/less control of the activities

in the foreign marketW Desire to gain experience, knowledge of the

competitive situation and of the demand characteristicsof the foreign market

W Desire to establish direct marketing policiesW Desire to enter into other markets thanks to a ‘massive’

presence in this marketW Perception that a change was necessary if the firm

wanted to achieve a growth targetW Desire to give more/less importance to the foreign

market in the futureW Different attitude to international business than the old

managementW Desire to go back to give more/less emphasis to the

internal marketW Willingness to go back to concentrate/multiply

production in some geographical areasW Desire not to invest anymore and take riskW Desire to have a higher flexibility in investmentW Willingness to overcome the entry barriersW Desire to avoid the possible loss of know-howW Willingness to delegate international activities to

operators in intermediation in a major/minor wayW Desire to achieve a long-term policy

B. Francioni et al.246

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

The ANOVA table (Table 6) indicates which variables gave the greatest contribution

to the identification of clusters. The results reveal that the total of the changes in

international markets and entry mode strategy is the most significant variable, followed by

some reactive factors related to business and social relationships and in particular to

problems connected with partners (distributor and/or licensor become competitors by

copying the company’s product illegally, the partner in the foreign country is guilty of

misconduct, the partner does not comply with quality standards, the local producer is not

qualified).

In order to understand how to interpret groups and what the firms belonging to the

same group/cluster have in common, it was necessary to develop Table 7, regarding the

final cluster centres, which represents the average number of each variable in each group

and helps to understand the characteristics of the elements included in each cluster.

Cluster number one is composed of 11 firms belonging predominantly to the 25th

NACE category. These firms were founded 31–40 years ago and have long experience

in international fields. Firms belonging to this cluster are quite small (21–50 employees)

and have an annual turnover from 5 to 10 million Euros. They mainly adopt direct

negotiations, but also importers and agents. With reference to changes in international

strategy, these firms carried out an average of seven changes in markets and entry modes

strategy. Entry into a foreign market often made it possible to enter into other markets.

Regarding changes in entry mode, reactive changes do not appear to influence firms in

their internationalization strategies. The entrepreneur’s willingness to carry out a specific

action in an international field regardless of business and social relationships, however,

seems to be extremely important for proactive changes. Indeed, the desire of the

entrepreneur to have less/more control in international activities or to gain experience and

knowledge or to eliminate the possible loss of know-how is very important.

Cluster number two is composed of 28 firms and is the largest group. The majority of

these firms belong to the 28th NACE category. These firms have quite a long experience

in the mechanical sector (21–30 years) and a short experience in the international field

(11–20 years). Consequently, export intensity is between 21% and 40% and the number of

served markets is from six to 10. Like cluster number 1, these firms mostly adopt direct

and indirect export entry modes, although in some cases they create commercial units or

joint ventures in the foreign markets (28–12 and 28–21). Regarding changes in

international strategy, there is an average of six changes – even if we must consider that

the majority of them are related to entry methods and not to market strategy. Indeed, in the

majority of the firms, entry into one market excludes entries into other markets. On the

other hand, in reference to changes in mode strategy, results reveal that these firms give

importance to all the various factors that can lead to a change. Particularly, this cluster

seems to give special relevance to reactive factors related to business and social

relationships, like some problems with the foreign partner in terms of quality standards

Table 3. Number of cases in each cluster.

Cluster Number of cases in each cluster

1 112 283 54 16Total 60

Journal of Strategic Marketing 247

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 4. Cluster membership.

Code of surveyed firms Cluster Distance

25–4 1 9.45125–12 1 9.28125–13 1 12.38625–15 1 10.96925–18 1 11.03925–21 1 12.29725–23 1 11.09625–28 1 10.55128–17 1 11.08828–20 1 11.13328–29 1 10.43825–1 2 7.5325–7 2 7.5225–16 2 7.94525–17 2 7.86425–20 2 8.65925–22 2 8.21925–24 2 8.77425–25 2 8.63925–26 2 6.57825–29 2 8.48425–30 2 8.08328–1 2 9.00328–3 2 8.49728–4 2 9.14128–5 2 9.328–8 2 12.86728–11 2 7.54428–12 2 7.94128–13 2 9.10928–14 2 10.68328–15 2 7.59128–16 2 13.27128–19 2 8.53528–21 2 10.43628–22 2 9.31928–23 2 10.35728–25 2 8.27128–27 2 7.8525–6 3 11.86925–9 3 8.32328–7 3 8.83628–9 3 10.88528–30 3 11.52725–2 4 13.11525–3 4 8.85425–5 4 9.42125–8 4 10.02625–10 4 8.78325–11 4 10.78825–14 4 11.66825–19 4 8.41225–27 4 12.345

(continued)

B. Francioni et al.248

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

and misconducts. At the same time cluster two directs its attention to reactive factors not

related to business and social relationships, like the fact that the method previously used

has reached its goals or has come to an end or does not give the expected results or takes

too much effort and there are too many costs to be kept. Moreover, cluster number two

shows a high influence of proactive factors that can lead to a change in the entry mode

strategy, like the decision to propose an alternative entry mode to a major customer (in the

case of factors related to business and social relationships) or the desire of the entrepreneur

to have less/more control of the activities in the foreign market or to gain experience, or

the perception that a change is necessary (in the case of factors not related to business and

social relationships).

Cluster number three is the smallest group, whose firms mainly belong to the 28th

NACE category. These firms were founded in different times (31–40 years ago), they have

a number of employees from 51 to 100 and an annual turnover from 21 to 50 million

Euros. Regarding their international activities, they have a long experience in the

international field (21–30 years) very high export intensity (61–80% of total annual

turnover) and they serve between 11 and 15 markets. Firms belonging to this group

principally use direct and indirect export sale forces as their entry method, but they also

adopt entry modes with a high degree of control, like commercial units and acquisitions.

With reference to changes in international strategy, there is an average of 19 changes, a

much higher average than the other groups. Therefore, this cluster appears to have a high

propensity to change, both in market strategy and in entry mode strategy. With specific

reference to changes in mode strategy, results reveal that this group seems to be more

influenced by factors not related to previous business and social relationships, in both

cases of reactive and proactive factors. Indeed, firms seem to be more influenced by the

fact that the method previously used is too expensive, has not given the expected results or

is incompatible with the objectives of business growth (reactive factors). Moreover, firms

consider the entrepreneur’s perception that a change is necessary and his/her desire to give

Table 4. (Continued)

Code of surveyed firms Cluster Distance

28–2 4 10.01928–6 4 10.97828–10 4 11.94828–18 4 7.53428–24 4 8.20928–26 4 8.18628–28 4 12.865

Table 5. Distance between final cluster centres.

Cluster 1 2 3 4

1 7.608 13.169 8.8952 7.608 14.930 10.6603 13.169 14.930 16.2604 8.895 10.660 16.260

Journal of Strategic Marketing 249

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 6. ANOVA.

Cluster Error

Meansquare d.f.

Meansquare d.f. F Sig.

Intermediary/agent/distributor offers analternative entry mode

1.322 3 1.987 56 .665 .577

The intermediary sells its products andother more profitable products but notthose of your company

12.565 3 2.187 56 5.744 .002

Decreased satisfaction with commercialItalian/foreign intermediaries/distributors

13.010 3 1.477 56 8.810 .000

Customers of foreign country ask fordirect contact with the company

.641 3 1.512 56 .424 .736

Foreign/national customers and/orpotential customers offer to the companyan alternative way to enter

2.005 3 1.653 56 1.213 .314

The foreign customers show loyalty toagents

3.715 3 1.830 56 2.030 .120

Company (also competitor) proposes toenter into foreign market with analternative entry mode

3.822 3 1.013 56 3.774 .015

Chamber of Commerce or other institutionsoffer an alternative entry mode

4.283 3 1.092 56 3.922 .013

The foreign public operator makesopportunities available for alternativemodes

3.097 3 1.347 56 2.299 .087

A friend/relative offers an alternative way 4.908 3 1.589 56 3.088 .034A foreign/Italian supplier offers analternative entry mode

2.369 3 1.568 56 1.511 .222

One of your employees offers analternative entry mode

3.506 3 1.458 56 2.404 .077

Meeting at a trade show with a person whoproposes to launch a more profitableentry mode

4.432 3 1.602 56 2.767 .050

The partner in the foreign country offers analternative way

7.587 3 1.504 56 5.045 .004

The partner in the foreign country is guiltyof misconduct against you

22.379 3 1.483 56 15.091 .000

The partner does not comply with qualitystandards

25.613 3 1.381 56 18.545 .000

The local producer is not qualified 25.425 3 1.544 56 16.467 .000The company has difficulty in trainingstaff abroad

5.051 3 1.919 56 2.633 .059

The foreign labour is too unqualified 3.312 3 2.096 56 1.580 .204Distributor and/or licensor becomecompetitors by copying your productillegally

32.420 3 1.524 56 21.279 .000

The method previously used reached itsgoal or ended (e.g. work concluded orcontract expired)

12.853 3 1.836 56 6.999 .000

The method used takes too much effort andtoo many costs to be kept

9.251 3 1.583 56 5.844 .002

(continued)

B. Francioni et al.250

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 6. (Continued)

Cluster Error

Meansquare d.f.

Meansquare d.f. F Sig.

The method used did not give the expectedresults

10.716 3 1.322 56 8.106 .000

The method used is not suitablefor firm operations and/or isincompatible with the objectives ofbusiness growth

12.682 3 1.545 56 8.207 .000

Extreme performance (positive ornegative) of the procedures currentlyused

6.794 3 1.285 56 5.288 .003

It is not efficient to serve the foreign marketfrom the country of origin

7.980 3 1.532 56 5.209 .003

The business was best/worst: the firmhas more/less money to use forinternational operations

2.940 3 1.734 56 1.695 .178

The firm accumulated enough knowledgeof foreign markets/internationalexperience that you decide to switchtowards a more challenging mode

9.601 3 1.703 56 5.637 .002

There are few contractual restrictions torescind the previous contract

5.794 3 1.274 56 4.547 .006

The disinvestment costs are low 10.079 3 1.655 56 6.089 .001The firm has incorrectly forecast demandfor the foreign country

5.386 3 1.407 56 3.829 .014

The foreign market is in decline/expansion 4.957 3 1.605 56 3.089 .034The foreign market has entered into EUor other organizations

5.631 3 1.399 56 4.025 .012

The foreign country has lowered/raisedtariff/non-tariff/competitive barriers

13.312 3 1.326 56 10.040 .000

The foreign country has a more/lessrisky social, political, economicenvironment

10.460 3 1.557 56 6.717 .001

The foreign country has more/less efficientmechanisms for certain institutions thanin the past

10.172 3 1.065 56 9.547 .000

The firm identified an intermediary/agent/distributor and proposed analternative entry mode

4.506 3 1.788 56 2.520 .067

The firm established a relationship witha major customer/potential customer andproposed him/her an alternative entrymode

13.384 3 1.128 56 11.863 .000

The firm identified a potential firm(even competitor) and proposed analternative entry mode

10.954 3 1.066 56 10.271 .000

The firm suggested to a friend/relativean alternative entry mode

10.774 3 1.105 56 9.753 .000

The firm suggested to an Italian/foreignprovider an alternative entry mode

5.730 3 1.115 56 5.137 .003

(continued)

Journal of Strategic Marketing 251

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 6. (Continued)

Cluster Error

Meansquare d.f.

Meansquare d.f. F Sig.

The firm offered to Italian/foreignemployees an alternative entry mode

5.592 3 1.158 56 4.831 .005

The firm identified a potential partnerto whom to propose an alternativeentry mode

7.731 3 1.139 56 6.787 .001

Entrepreneur’s perception of the need tochange

3.683 3 1.385 56 2.660 .057

Desire to have more/less control ofthe activities in the foreign market

16.390 3 .890 56 18.420 .000

Desire to gain experience/knowledge of thecompetitive situation and of the demandcharacteristics of the foreign market

10.243 3 1.326 56 7.725 .000

Desire to establish direct marketingpolicies

13.315 3 1.219 56 10.927 .000

Desire to enter into other markets thanksto a ‘massive’ presence in this market

7.491 3 1.709 56 4.383 .008

Perception that a change was necessaryto achieve a growth target

12.777 3 1.247 56 10.243 .000

Desire to give more/less importance tothe foreign market in the future

8.977 3 1.530 56 5.869 .001

Different attitude to international businessthan the old management

8.604 3 1.569 56 5.485 .002

Desire to go back to give more/lessemphasis to the internal market

.560 3 1.916 56 .292 .831

Willingness to go back to concentrate/multiply the production in a few/manygeographical areas

1.594 3 1.782 56 .894 .450

Desire not to invest anymore and take risk 6.617 3 1.734 56 3.815 .015Desire to have greater flexibility ininvestment

6.614 3 1.462 56 4.523 .007

Willingness to overcome the entry barriers 10.902 3 1.505 56 7.244 .000Desire to avoid the possible loss ofknow-how

11.070 3 1.853 56 5.974 .001

Willingness to delegate internationalactivities to specialized operators inintermediation in a major/minor way

.930 3 1.925 56 .483 .695

Desire to achieve a long-term policywithout being forced to focus onshort-term results

5.771 3 1.684 56 3.427 .023

Years of firm experience 2.844 3 1.422 56 1.999 .125Number of employees 3.645 3 1.251 56 2.914 .042Annual turnover (millions of Euros) 7.166 3 1.146 56 6.256 .001Years of International Business Experience 1.757 3 1.052 56 1.670 .184Export intensity (%) 5.939 3 1.568 56 3.789 .015Number of served markets 5.380 3 1.886 56 2.853 .045Entry into one market permitted theentry into another market?

.776 3 .222 56 3.502 .021

NACE code .334 3 .250 56 1.336 .272Total of strategic changes 270.991 3 6.364 56 42.585 .000

B. Francioni et al.252

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 7. Final cluster centres.

Cluster

1 2 3 4

Intermediary/agent/distributor offers an alternativeentry mode

3 3 3 3

The intermediary sells its products and other moreprofitable products, but not those of the company

2 3 3 2

Decreased satisfaction with commercial Italian/foreignintermediaries/distributors

2 4 3 2

Customers of foreign country require direct contact withthe company

4 4 4 4

Foreign/national customers and/or potential customersoffer an alternative way to enter

3 3 3 3

The foreign customers show loyalty to agents 3 4 3 3Company (also competitor) proposes to enter into foreignmarket with an alternative entry mode

2 3 2 2

The Chamber of Commerce or other institutions offer analternative entry mode

2 2 2 1

The foreign public operator makesavailable opportunities for alternative modes

2 3 2 2

A friend/relative offers an alternative way 2 3 2 2A foreign/Italian supplier offers an alternativeentry mode

2 3 2 2

One of the company’s employees offers an alternativeentry mode

2 3 3 2

Meeting at a trade show with a person who proposesto launch a new more profitable entry mode

4 4 3 3

The partner in the foreign country offers an alternativeway

3 4 2 3

The partner in the foreign country is guilty ofmisconduct against the company

2 5 3 3

The partner does not comply with quality standards 2 4 2 2The local producer is not qualified 2 4 1 2The company has difficulty in training staff abroad 2 3 2 2The foreign labour has been too unqualified 2 3 2 2Distributor and/or licensor become competitorsby copying the company’s product illegally

2 4 2 2

The method previously used reached its goal or ended(e.g. work concluded or contract expired)

2 4 3 2

The method used takes too much effort and too manycosts to be kept

3 4 4 3

The method used did not give the expected results 3 4 4 3The method used is not suitable for the firm’s operationsand/or is incompatible with the objectives of businessgrowth

3 4 4 3

Extreme performance (positive or negative) of theprocedures used

3 4 3 2

It is not efficient to serve the foreign market fromthe country of origin

2 4 4 2

The business was best/worst case:the firm has more/less moneyto use for international operations

3 3 2 3

The firm accumulated enough knowledge of foreignmarkets/international experience that it has decidedto switch towards a more challenging mode

4 4 3 2

There are few contractual restrictions to rescind theprevious contract

2 3 1 2

(continued)

Journal of Strategic Marketing 253

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Table 7. (Continued)

Cluster

1 2 3 4

The disinvestment costs are low 2 3 2 2It has incorrectly forecast demand in theforeign country

2 4 3 3

The foreign market is in decline/expansion 3 4 3 3The foreign market has entered into the EUor other organizations

2 3 3 1

The foreign country has lowered/raised tariff/non-tariff/competitive barriers

3 3 3 2

The foreign country has a more/less risky social,political, economic environment

3 3 3 2

The foreign country has more/less efficientmechanisms for certain institutions than in the past

3 3 2 1

The firm identified an intermediary/agent/distributorand proposed an alternative entry mode

3 4 3 2

The firm established a relationship with a majorcustomer/potential customer and proposed tohim/her an alternative entry mode

4 4 2 2

The firm identified a potential firm (even competitor)and proposed an alternative entry mode

3 3 2 1

The firm suggested to a friend/relative an alternativeentry mode

2 3 1 1

The firm suggested to Italian/foreign provider analternative entry mode

2 3 1 2

The firm offered to Italian/foreign employees analternative entry mode

2 3 2 2

The firm identified a potential partner to proposean alternative mode

4 4 3 2

Entrepreneur’s perception of the need to change 4 4 3 3Desire to have more/less control of the activitiesin the foreign market

4 4 3 2

Desire to gain experience, knowledge of thecompetitive situation and of the demandcharacteristics of the foreign market

4 4 3 2

Desire to establish direct marketing policies 4 3 2 2Desire to enter into other markets thanks to a ‘massive’ presence in this market

4 3 3 2

Perception that a change was necessary to achievea growth target

4 4 4 2

Desire to give more/less importance to the foreignmarket in the future

4 4 4 2

Different attitude to the international business thanthe old management

3 3 2 2

Desire to go back to give more/less emphasis on theinternal market

3 3 2 3

Willingness to go back to concentrate/multiply theproduction in a few/many geographical areas

2 3 3 2

Desire not to invest anymore and take risk 3 3 1 2Desire to have greater flexibility in investment 4 3 2 2Willingness to overcome the entry barriers 3 4 3 2Desire to avoid the possible loss of know-how 4 4 3 2Willingness to delegate international activities tospecialized operators in intermediation in amajor/minor way

3 3 3 2

(continued)

B. Francioni et al.254

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

more/less importance to the foreign market as very important elements when deciding to

change their entry method strategy.

Cluster number four is composed of 16 firms, that mainly belong to the 25th NACE

category. These are small companies (10–20 employees) that have a low annual turnover

(5–10 million Euros). Firms belonging to this group show little interest in international

activities, since, not only do they have an export intensity between 21% and 40%, but also

the average number of the markets they serve is from one to five. The cluster principally

adopts direct and indirect entrymodes, and in one case an acquisition has also been reported.

Regarding changes in international strategy, this group shows a low propensity to change,

with an average of four changes, mainly related to the entry mode strategy rather than to the

market strategy.With specific reference to the entrymode strategy, results illustrate that this

cluster does not give importance to proactive factors leading to a change, except for the case

of a possible entrepreneur’s perception of the need to change or a desire to go back to give

more/less emphasis to the internal market. These firms seem to be more influenced by

reactive factors, even if to a smaller extent than cluster 2 and 3.As for reactive factors related

to business and social relationships, this group gives a medium/high importance to an

intermediary/agent/distributor offer of an alternative, to the possibilities that a customer of a

foreign country asks for a direct contact with the company, or that a foreign customer shows

loyalty to agents, or that someone met at a trade fair proposes an alternative entry mode. As

Table 7. (Continued)

Cluster

1 2 3 4

Desire to achieve a long-term policy without beingforced to focus on short-term results

4 3 3 2

Years of firm experience 31–40 21–30 31–40 21–30Number of employees 21–50 21–50 51–100 10–20Annual turnover (millions of Euros) 5–10 5–10 21–50 5–10Years of International Business Experience 21–30 11–20 21–30 10–20Export intensity (%) 41–60 21–40 61–80 21–40Number of served markets 11–15 6–10 11–15 1–5The entry into a market permitted the entry intoanother market?

Yes No Yes No

NACE code 25 28 28 25Total of strategic changes 7 6 19 4

The established

The lazyThe poor

The willing

Low Medium-High

25

28

Degree of internationalization and predisposition todo changes in market and mode strategy

NACEcategory

Figure 1. Profiles of surveyed firms.

Journal of Strategic Marketing 255

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

for reactive factors not related to business and social relationships, the results reveal an

interest in change when the selected entry mode takes too much effort or does not give the

expected results or when it is incompatible with the objectives of business growth.

6. Conclusions

The research developed a cluster analysis to classify the surveyed firms into four different

groups. This cluster analysis permitted the creation of a matrix to place each profile in the

correct quadrant (Figure 1). These groups differ especially on the basis of whether they

belong to one of the two NACE categories (25 and 28) that were considered as well as in

their degree of internationalization and predisposition to make changes in market and

mode strategy.

Cluster number one was titled ‘The lazy’: mainly belonging to the 25th NACE

category (medium–low technology), these firms were founded 31–40 years ago and

began their international activity from 21 to 30 years ago. Nevertheless, after starting the

internationalization process, their degree of internationalization is not so high, especially

in terms of export intensity (41–60%) and their predisposition to make changes in market

and mode strategy (seven changes). Moreover, they mainly adopt entry methods with a

low degree of involvement, such as agents, importers and direct negotiations.

Cluster number two was named ‘The willing’. This group is mainly composed of firms

of the 28th NACE category (medium–high technology) with a moderate international

experience. However, they serve from six to 10 markets in a stable way and they adopt not

only direct and indirect export entry modes, but also in some cases they create commercial

units or Joint Ventures. Moreover, despite the fact that they do not make a large number of

market and mode changes, these firms give a certain importance to all the various factors

that can lead to a change, showing a high propensity to move to cluster number three.

Indeed, cluster number three was named ‘The established’, that is a group formed of

firms mainly belonging to the 28th NACE category, that were founded in different times

(31–40 years ago) and have a medium size (51–100 employees and 21–50 million Euros

of annual turnover). This kind of company also has a high degree of internationalization,

especially regarding export intensity (61–80%), the number of served markets (11–15)

and the number of changes in market and mode strategy (17 changes).

Cluster number four was called ‘The poor’. It includes companies mainly belonging to

the 25th NACE category, and particularly those which, although they have been operating

for several years, have maintained a small size (10–20 employees).

Moreover, they do not achieve a high degree of internationalization, especially with

regards to the number of served market (one to five markets) and the propensity to make

changes in market and mode strategy. Indeed, this type of firm shows an average of four

strategy changes and they are not particularly influenced by factors leading to a mode

strategy change, except for a few reactive factors.

This analysis permitted the discovery of different aspects that until now have been

little examined. First, even if each company has its history and its peculiarities, the

analysis allowed us to discover various similarities in the internationalization process of

companies belonging to the mechanical sector. At the same time, ‘The manufacture of

fabricated metal products’ category (NACE 25), considered as medium–low technology,

seems to exhibit some different behaviours compared to firms belonging to ‘The

manufacture of machinery and equipment n.e.c.’ category (NACE 28) and considered

medium–high technology companies. This type of difference has never been analysed in

B. Francioni et al.256

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

other empirical research, probably because studies generally tend to analyse a sector

regardless of the differences within it.

With reference to changes in entry mode strategies, the research permitted the

observation that the decision to change does not derive only from the impact of existing

business and social relationships, as themajority of the literature stresses (Agndal &Chetty,

2007;Chetty&Agndal, 2007;Nummela, 2002), but also fromproactive and reactive factors

connected to an independent decision of the entrepreneur, regardless of previous

relationships. This result derives from the fact that the unit of analysis is the small firm,

which is strongly affected by the entrepreneur’s influence in strategic decisions. Therefore,

a network-extended approach turned out to be optimal for the purposes of the research.

References

Agndal, H., & Chetty, S. (2007). The impact of relationships on changes in internationalisationstrategies of SMEs [Research paper]. European Journal of Marketing, 41(11/12), 1449–1474.

Ahokangas, P. (1998). Internationalisation and resources. An analysis of processes in Nordic SMEs(Doctoral dissertation, Ph.D. dissertation). University of Vaasa, Finland.

Asmussen, C. G., Benito, G. R. G., & Petersen, B. (2009). Organizing foreign market activities:From entry mode choice to configuration decisions. International Business Review, 18(2),145–155.

Benito, G. R. G., Pedersen, T., & Petersen, B. (2005). Export channel dynamics: An empiricalinvestigation. Managerial and Decision Economics, 26, 159–173.

Bilkey, W. J., & Tesar, G. (1977). The export behaviour of smaller Wisconsin manufacturing firms.Journal of International Business Studies, 9(Spring/Summer), 93–98.

Bjorkman, I., & Kock, S. (1997). Inward international activities in service firms – illustrated by threecases from the tourism industry. International Journal of Service Industry Management, 8(5),362–376.

Bodur, M., & Madsen, T. K. (1993). Danish foreign direct investment in Turkey. European BusinessReview, 93(5), 28–43.

Brouthers, K. D., & Hennart, J.-F. (2007). Boundaries of the firm: Insights from international entrymode research. Journal of Management, 33(3), 395–425. doi:10.1177/0149206307300817.

Brouthers, K. D., & Nakos, G. (2004). SME entry mode choice and performance: A transaction costperspective. Entrepreneurship Theory and Practice, Spring, 229–247.

Calof, J. L. (1993). The impact of size on internationalization. Journal of Small BusinessManagement, 31(4), 60–69.

Calof, J. L., & Beamish, P. W. (1995). Adapting to foreign markets: Explaining internationalization.International Business Review, 4(2), 115–131.

Cavusgil, S. T. (1980). On the internationalisation process of firms. European Research,8(November), 273–281.

Chetty, S., &Agndal, H. (2007). Social capital and its influence on changes in internationalizationmodeamong small and medium-sized enterprises. Journal of International Marketing, 15(1), 1–29.

Chetty, S., & Blankenburg Holm, D. (2000). Internationalisation of small to medium-sizedmanufacturing firms: a network approach. International Business Review, 9, 77–93.

Clark, T., Pugh, D. S., & Mallory, G. (1997). The process of internationalization in the operatingfirm. International Business Review, 6(6), 605–623.

Coviello, N., & Munro, H. (1997). Network relationships and the internationalisation process ofsmall software firms. lnternational Business Review, 6(4), 361–386.

Coviello, N. E., & McAuley, A. (1999). Internationalisation and the smaller firm: A review ofcontemporary empirical research. Management International Review, 39(3), 223–256.

Coviello, N. E., & Munro, H. J. (1995). Growing the entrepreneurial firm. Networking forinternational market development. European Journal of Marketing, 29(7), 49–61.

Czinkota, M. R. (1982). Export development strategies: US promotion policies. New York: Praeger.Davidson, W. H. (1982). Global strategic management. New York, NY: John Wiley & Sons.Ekeledo, I., & Sivakumar, K. (2004). International market entry mode strategies of manufacturing

firms and service firms. A resource-based perspective. International Marketing Review, 21(1),68–101.

Journal of Strategic Marketing 257

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Ellis, P. (2000). Social ties and foreign market entry. Journal of International Business Studies,31(3), 443–469.

EUROSTAT. (2008). NACE rev. 2. Statistical classification of economic activites in the Europeancommunity.

Federmeccanica. (2009). L’industria metalmeccanica in cifre. Giugno 2009, from http://www.federmeccanica.it/pubb/f02c.html

Fletcher, R., & Barrett, N. (2001). Embeddedness and the evolution of global networks. AnAustralian case study. Industrial Marketing Management, 30, 561–573.

Fontes, M., & Coombs, R. (1997). The coincidence of technology and market objectives in theinternationalisation of new technology-based firms. International Small Business Journal, 15(4),14–35.

Gatignon, H., & Anderson, E. (1988). The multinational corporation’s degree of control over foreignsubsidiaries: An empirical test of a transaction cost explanation. Journal of Law, Economics andOrganization, 4(Fall), 305–336.

Ghanatabadi, F. (2005). Internationalization of small and medium-sized enterprises in Iran(Ph.D. dissertation). Lulea University of Technology.

Gomes-Casseres, B. (1989). Ownership structures of foreign subsidiaries: Theory and evidence.Journal of Economic Behavior and Organization, 11(3), 1–25.

Hertz, S., & Mattsson, L. -G. (2001, May 8–11). Dynamics of contemporary international markets-strategic alliances and reconfiguration of network structures. Paper presented at the 30thEuropean Marketing Academy (EMAC) Conference, Bergen, Norway.

Hilmersson, M. (2009). Sme entry in eastern Europe. An institutional network approach (Ph.D.dissertation). University of Kalmar, Sweden.

Jack, S. L. (2010). Approaches to studying networks: Implications and outcomes. Journal ofBusiness Venturing, 25, 120–137.

Jansson, H., & Sandberg, S. (2008). Internationalization of small and medium sized enterprises in theBaltic sea region. Journal of International Management, 14, 65–77.

Johannisson, B., & Mønsted, M. (1997). Contextualizing entrepreneurial networking. The case ofScandinavia. International Studies of Management & Organization, 27(3), 109–136.

Johanson, J., & Mattsson, L. -G. (1988). Internationalisation in industrial systems – a networkapproach. In N. Hood & J.-E. Vahlne (Eds.), Strategies in global competition. Croom Helm,USA: The Stockholm School of Economics.

Johanson, J., & Vahlne, J. (1990). The mechanism of internationalization. International MarketingReview, 7(4), 11–24.

Johanson, J., & Vahlne, J. -E. (1977). The internationalization process of the firm: A model ofknowledge development and increasing foreign market commitments. Journal of InternationalBusiness Studies, 8(1), 23–32.

Johanson, J., & Vahlne, J. -E. (2003). Business relationship learning and commitment in theinternationalization process. Journal of International Entrepreneurship, 1(1), 83–101.

Johanson, J., & Wiedersheim-Paul, F. (1975). The internationalization of the firm: Four Swedishcases. Journal of Management Studies, 12(3), 305–322.

Jones, M. V., & Coviello, N. E. (2005). Internationalisation: Conceptualising an entrepreneurialprocess of behaviour in time. Journal of International Business Studies, 36, 284–303.

Kelliher, F., & Reinl, L. (2009). A resource-based view of micro-firm management practice. Journalof Small Business and Enterprise Development, 16(3), 521–532.

Kogut, B. (1983). Foreign direct investment as a sequential process. In C. P. Kindleberger & D.Audretsch (Eds.), The multinational corporation in the 1980s. Cambridge, MA: MIT Press.

Korhonen, H., Luostarinen, R., & Welch, L. (1996). Internationalization of SMEs: Inward-outwardpatterns and government policy. Management International Review, 36(4), 315–329.

Leonidou, L. C., Katsikeas, C. S., Palihawadana, D., & Spyropoulou, S. (2007). An analytical reviewof the factors stimulating smaller firms to export implications for policy-makers [Researchpaper]. International Marketing Review, 24(6), 735–770.

Lu, J. W. (2002). Intra- and inter-organizational imitative behavior: Institutional influences onJapanese firms’ entry mode choice. Journal of International Business Studies, 33(1), 19–37.

Lu, J. W., & Beamish, P. W. (2001). The internationalization and performance of SMEs. StrategicManagement Journal, 22, 565–586.

Mahoney, J. T. (1995). The management of resources and the resource of management. Journal ofBusiness Research, 33, 91–101.

B. Francioni et al.258

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014

Malhotra, N. K., & Birks, D. F. (2007). Marketing research. An applied approach. Harlow, UK:Prentice Hall.

McDougall, P. P., & Oviatt, B. (2000). International entrepreneurship: The intersection of tworesearch paths. Academy of Management Journal, 43(5), 902–906.

Melin, L., & Hellgren, B. (1994). Patterns of strategic processes: Two change typologies. In H.Thomas, D. O’Neal & R. White (Eds.), Building the strategically-responsive organization(pp. 521–571). Chichester: Wiley.

Meyer, K., & Skak, A. (2002). Networks, serendipity and SME entry into Eastern Europe. EuropeanManagement Journal, 20(2), 179–188.

Musso, F., & Francioni, B. (2009). Foreign markets entry mode decision for SMEs. Key factors androle of industrial districts. Paper presented at the 35th EIBA Conference Proceedings,Univerdidad de Valencia, Valencia, Spain, 13–15 December.

Nummela, N. (2002). Change in SME internationalisation. A network perspective. Paper presentedat the 28th EIBA Conference, December 8–10, Athens, Greece.

O’Donnell, A., Gilmore, A., Cummins, D., & Carson, D. (2001). The network construct inentrepreneurship research: A review and critique. Management Decision, 39(9), 749–760.

OECD. (2010). SMEs, Entrepreneurship and Local Development in the Marche Region, Italy:OECD Local Economic and Employment Development (LEED) Working Papers, CFE.

Oviatt, B. M., & McDougall, P. P. (2005a). Defining international entrepreneurship and modelingthe speed of internationalization. Entrepreneurship Theory & Practice, 29(5), 537–553.

Oviatt, B. M., & McDougall, P. P. (2005b). The internationalization of entrepreneurship. Journal ofInternational Business Studies, 36, 2–8.

Paradisi, M. (2000). Distretti, Reti, Sistemi Locali: Il Caso delle Attivita Meccaniche nell’Area a Suddi Ancona. Economia Marche, XIX(1), 135–160.

Pedersen, T., Petersen, B., & Benito, G. R. G. (2002). Change of foreign operation method: Impetusand switching costs. International Business Review, 11, 325–345.

Petersen, B., & Welch, L. S. (2002). Foreign operation mode combinations and internationalization.Journal of Business Research, 55, 157–162.

Rangone, A. (1999). A resource-based approach to strategy analysis in small-medium sizedenterprises. Small Business Economics, 12(3), 233–248.

Reid, S. D. (1981). The decision-maker and export entry and expansion. Journal of InternationalBusiness Studies, 12(2), 101–112.

Root, F. R. (1998). Entry strategies for international markets. Revised and expanded. San Francisco:John Wiley & Sons.

Ruzzier, M., Antoncic, B., & Konecnik, M. (2006). The resource-based approach to theinternationalisation of SMEs: Differences in resource bundles between internationalised and non-internationalised companies.Zagreb International Review of Economics & Business, 9(2), 95–116.

Ruzzier, M., Hisrich, R. D., & Antoncic, B. (2006). SME internationalization research: Past, present,and future [Conceptual paper]. Journal of Small Business and Enterprise Development, 13(4),476–497.

Sakarya, S., Eckman, M., & Hyllegard, K. H. (2007). Market selection for international expansion.Assessing opportunities in emerging markets [Research paper]. International Marketing Review,24(2), 208–238.

Styles, C., & Seymour, R. G. (2006). Opportunities for marketing researchers in internationalentrepreneurship [Research paper]. International Marketing Review, 23(2), 126–145.

Tallman, S., & Karin Fladmoe-Lindquist, K. (1994). Resource-based strategy and competitiveadvantage among multinationals. In P. Shrivastava, A. Huff & J. Dutton (Eds.), Advances instrategic management (pp. 45–72). Greenwich, CT: JAI Press.

Terpstra, V., & Sarathy, R. (1994). International marketing. Fort Worth, TX: Dryden Press.Welch, L. S., Benito, G. R. G., & Petersen, B. (2007). Foreign operation methods: Theory, analysis,

strategy. Cheltenham, UK: Edward Elgar.Wright, M., Westhead, P., & Ucbasaran, D. (2007). Internationalization of small and medium-sized

enterprises (SMEs) and international entrepreneurship: A critique and policy implications.Regional Studies, 41(7), 1013–1029. doi:10.1080/00343400601120288.

Journal of Strategic Marketing 259

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

08:

54 2

5 N

ovem

ber

2014