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The cause and effects of internationalization are debated widely, both inside and outside the worlds of commerce. Rapid development of global brands such as Nike or Starbucks are reported on by the all areas of the media, with the negative effects garnering most attention. However the big boys are not the only ones seeking to exploit global markets - the explosion of e-commerce has meant all echelons of retailers can access wider markets, challenging the existing models of international growth. The theory is fine, but how can a small business actually do it.
Four paths to market
Firstly, back to school for a brief moment. In the literature, there are four different established paths where retailers have been able to expand into international markets. These are:
increasing penetration into international markets through practicalities (e.g. existence of supplier abroad);
increasing penetration along geographical lines (e.g. nearest countries first, gradually widening;
increasing penetration through dynamic, environmental reasons; and
increasing penetration extremely rapidly, often through early mastery of technology.
Clearly, these four paths to international market can be split into two, with the first two paths developing gradually along "incremental" lines, while the latter develop more "organically". The latter two are also more relevant, one would assume, for businesses using e-commerce, as they facilitate the rapid growth that has been exemplified by electronic retailers Ebay and Amazon. However recent studies have shown that this may somewhat oversimplify what smaller retailers have done to market their products abroad.
Case study: Blue Tomato
Started up in 1994, Blue Tomato is a snowboard company based in Austria and founded by a former champion in the sport. From the...