International expansion or stagnation: market development for mature products

Abstract

Purpose: The purpose of this paper is to explore international market development for mature products and practices used in a novel business context. Design/methodology/approach: Taking a qualitative approach, the case study method was chosen to investigate how firms develop markets in relation to a new international business context. Critical international decisions are analysed using a managerial perspective. Findings: The success of international ventures depends on managerial learning and effectiveness. In this paper, the authors argue that decisions about international market development can add significantly to the understanding of how business firms enter and develop markets in novel business contexts. Two case studies show different approaches for meeting challenges in distant markets. Four propositions are developed. Originality/value: A theoretical contribution of this study is the importance of factors that explain international market development decisions in novel business contexts. The balance between incomplete knowledge and making resource commitments is of central concern to international managers. Some of this is tacit knowledge that a firm achieves and learns during the process of market development and other knowledge can only become available after an actual market entry. A second theoretical contribution of this study is the significance of contextual market knowledge in a novel business context.