A model of entrepreneurial internationalisation in uncertain foreign environments: Smaller firms and the global niche strategy

Abstract

Purpose of the paper: By proposing a model of SMEs’ entry in foreign markets characterised by uncertainty, we test the relationships among the implementation of a global niche strategy, the perception of lower competition, and international performance. Methodology: Hypotheses are tested on a sample of 110 Australian firms by applying structural equation modelling through the PLS-SEM technique. Results: Our results support the idea that entrepreneurial firms need to create their own environment and, at the same time, control it by exerting high levels of control on manufacturing and technological capabilities and by vertically integrating production processes. Research limitations: More samples from more countries would increase the generalisability of the results. The operationalisation of the components of the global niche strategy which resulted as non-significant need further refinement. Longitudinal studies are required to measure the sustainability of the global niche strategy over time. Practical implications: A customer focus instead of a country focus can help manage perceived uncertainty while growing internationally. Furthermore, decision makers should leverage on product uniqueness through a continuous refinement of technology thanks to insourced production processes. Originality of the paper. To date, no study has advanced a model to represent firms’ internationalisation by considering a process that starts with the formation of strategic antecedents - here represented by the components of the global niche strategy - of international performance.