what do we know about norwegian firms

Networks: What do we know about Norwegian firms going abroad?

Morten H. Abrahamsen,Associate Professor

Networks: What do we know about Norwegian firms going abroad?

Morten H. Abrahamsen,Associate Professor

some

Starting point

• International marketing research traditionally focuses on entry strategies:– Agent, distributor, intermediary, sales office,

domestic or local production?

• Export performance is related to relationship quality with these actors

• Governance mechanisms

Traditional value chain

(Solberg and Nes, 2002)

Relationship quality dependent on

• Uncertainty and complexity• Trust and commitment• Cultural disctance/closeness• Adaption and relationship investment• Cooperation and conflict

’No business is an island’

But what if it looks like this?

Networks and export performance

• ”Firms success in entering international markets is more dependent on its position in a network than cultural characteristics”

(Johanson and Mattson, 1988)

• ”Using existing relationships as bridges to other networks”

(Kenny and Fahy, 2011)

• ”Roles performed in a network rather than functions in a distribution or value chain may explain export performance”

(Abrahamsen et al., 2012)

Levels of export capabilities

RelationaFirm-

specific capabilities

Relational capabilities

Networkingcapabilities

Based on Grant (1995)

Firm-specific capabilities

• Attitudes• Expectations• Knowledge• Motivation

RelationaFirm-

specific capabilities

Relational capabilities

Networkingcapabilities

Characteristics of successful exporters

• Attitudes– Risk asessment– Market orientation– Cultural sensitivity

• Competence– Pricing policy– Sales skills– Ability to cooperate with

partners

• Organisational skills– Organisational backing– Top management and

board support

(Solberg, 2009)

Relational capabilies

• Adaptation required• Interdependence between companies• Exporting is a learning process• Other: – The resource-based view– Knowledge theory– Oranisational learning theory

RelationaFirm-

specific capabilities

Relational capabilities

Networkingcapabilities

Key questions

• How to evaluate future value—customer lifetime value of a relationship?

• How to create, manage and conclude relationships efficiently—from organizational and analytical perspectives?

• How to manage relational episodes efficiently? (Halinen and Möller, 2008)

Complexity and distance

• Complex products require high relationship investment in the relationship, ie. need for close cooperation

• Low complexity requires low investment, ie. need for ”door-openers”

• High cultural distance requires strong presence and close supervision

(Solberg, 2008)

But what if it looks like this?

Network = Interconnected relationships

Network capabilities

• “The resources and activities of a company to generate, develop, and manage networks in order to take advantage of single relationships and the network as a whole”

(Gemünden and Ritter, 1997)

RelationaFirm-

specific capabilities

Relational capabilities

Networkingcapabilities

What is a Business Network?

• A business network consists of two ”building blocks”:– companies and business relationships

• The companies and business relationships are interconnected, and together form a complex, web-like structure.

Questions for exporters

• What is my relevant network?• What is the network that I want

to be a part of?• Who can give me information

about new possibilities?

?

• What role should I play? • What resources can I offer?• What actvities can I perform? • How can the network be strenghtened

by my participation?

• What will happen to the network if strengthen my ties?

• What ties will be weakened?

• If you want to take up new functions, this may imply replacing someone else. What will they do? Counteract you?

Exporters facing new challenges

A seafood export network

Norwegian seafood exporters facing new challenges in a changing Japanese market..

What did they do?

• Redefining roles of existing importers• Finding new importers sharing their

perspective• Challenge existing distribution stucturing

using market power• Maintaining links with traditional network• Creating new ties to retailers and

restaurants

Network strategies

• Confront or Conform?• Create or Consolidate?• Coerce or Concede?

(Ford, 2011)

Conclusion

• The question is not to have relationships or not, but how to handle them!

• The question is not to network or not, but how to network!

Basic business assumptions:

-Jungle?

Basic business assumptions:

-Jungle?

-or rainforest?

Want to know more?

www.networksinbusiness.wordpress.com

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Obrigado por sua atenção!