This paper illustrates a framework and empirical results of an investigation to understand how and why MMNEs (Medium-size Multinational Enterprise) internationalization strategies deviate from the more established strategies of multinational and global companies (MNEs). We study a sample of Italian MMNEs, analyzing the strategic and governance models adopted in Chinese businesses and markets and the relationship between the headquarters and the overseas branches in China. The qualitative analysis complies with the research requirement to collect evidences on a precise point in time (2012) and over a more extended period of time (time of entry in China). This paper investigates the specificities of medium size international firms focusing on two particular factors: “mirroring effects” and “acquainted markets”. The “mirroring effects” refer to the adaptation process and in the our sample, the governance forms are strongly affected by the following features: first, the size does not fit the potential or actual dimension of market (size factor); Second, the “acquainted markets” decreases the difficulties to access to the countries’ markets. Our results show that MMNEs are prone to mirror home and existing organizational forms. They tend to replicate their existing business models to enter into “informed” and “experienced” markets. Our study explains the international strategies of MMNEs leveraging the capabilities to replicate organizational and business models, and availability of accustomed and informed markets. It follows that most successful MMNEs tend to implement a second mover strategy in Chinese markets. This paper contributes to the international management studies with the following results: i. Observations of the managerial paradoxes of SMEs in large markets and how MMNEs are emerging as a critical player in the global economic scenario; ii. Development of a framework tested on preliminary evidences, fostering the interest on “size paradigm” in international competition.
Medium size multinational firms internationalization strategies: when size matters in Chinese markets
PONTIGGIA, ANDREA;
2013
Abstract
This paper illustrates a framework and empirical results of an investigation to understand how and why MMNEs (Medium-size Multinational Enterprise) internationalization strategies deviate from the more established strategies of multinational and global companies (MNEs). We study a sample of Italian MMNEs, analyzing the strategic and governance models adopted in Chinese businesses and markets and the relationship between the headquarters and the overseas branches in China. The qualitative analysis complies with the research requirement to collect evidences on a precise point in time (2012) and over a more extended period of time (time of entry in China). This paper investigates the specificities of medium size international firms focusing on two particular factors: “mirroring effects” and “acquainted markets”. The “mirroring effects” refer to the adaptation process and in the our sample, the governance forms are strongly affected by the following features: first, the size does not fit the potential or actual dimension of market (size factor); Second, the “acquainted markets” decreases the difficulties to access to the countries’ markets. Our results show that MMNEs are prone to mirror home and existing organizational forms. They tend to replicate their existing business models to enter into “informed” and “experienced” markets. Our study explains the international strategies of MMNEs leveraging the capabilities to replicate organizational and business models, and availability of accustomed and informed markets. It follows that most successful MMNEs tend to implement a second mover strategy in Chinese markets. This paper contributes to the international management studies with the following results: i. Observations of the managerial paradoxes of SMEs in large markets and how MMNEs are emerging as a critical player in the global economic scenario; ii. Development of a framework tested on preliminary evidences, fostering the interest on “size paradigm” in international competition.
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