Many companies go global, but that does not make them born global firms. Since we are in the spirit of Christmas let’s make a comparison with Santa’s global gift giving business, to discover what distinguishes a “born global” from any other global operating firms.
Global focus from the earliest beginnings
Born global firms originate internationally. Born global firms, from their beginnings, have a global focus and commit their resources to international ventures.
Modern Santa with his white fur-cuffed red trousers, and black leather belt and boots not merely carries a bag full of gifts for children throughout the world. His business is exquisite global teamwork and his resources are fully focused on the global naughty-and-nice-selecting-and-gift-giving-process.
The definition of a born global firm is “a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.” – AMD Law
A borderless view
Most companies operate from their home country, and after years of doing business domestically, slowly evolve to do business internationally.
By contrast, born global firms begin with a borderless world view, and immediately develop strategies to expand themselves abroad. Born global firms have many distinctive features that allow them to start, and thrive in the international arena.
So we know Modern Santa grew up in an international environment being influenced by his ancestors the Greek bishop and gift-giver of Myra – Saint Nicholas, the British Father Christmas, the Dutch Sinterklaas and the German Christkind. An international view was something natural to him. And not being one to take it slowly, he immediately developed his international strategies to reach as many children as he could in the world.
Exporting as main method of foreign market entry – using external facilitators
One way born globals – such as Modern Santa – begin internationally is that they rely on exporting as their main method of foreign market entry. Modern Santa began exporting goods within a couple of years after founding, and exports the majority of his Modern Santa Inc’s total production.
Because of this, Modern Santa must rely on external facilitators, such as FedEx, to organize international shipments from the North Pole. But he heavily relies on external facilitators to maintain his online presence as well and get his naughty-and-nice research done. By using these external facilitators, Modern Santa can enter or withdraw from foreign markets quickly and easily.
Finding a niche and striving for superior quality
Modern Santa has a distinct way of doing business. Besides immediately using his aggressive entrepreneurial mindset to pursue international markets from the start. Yes, that portly, joyous, white-bearded man is an amazing entrepreneur!
The term aggressive implies being aggressive towards opportunities – it reflects a willingness to be unconventional rather than relying on traditional methods of market entry. Doing things differently.
When developing his markets, he employs differentiation strategies so as to make a niche for Modern Santa Inc internationally. Because of specialized resources, Modern Santa can offer specialized and customized products, satisfying a market that is too small to interest larger firms.
Not only are Modern Santa’s goods specialized, he also strives for superior product quality. More often than not, born globals are leading their industries technologically. This advantage allows them to not only pursue markets around the world, but offer superior products designed for the specialized markets they have made niches out of.
Standard model
Born global firms are of special interest not because of the size of these organizations, but by the age which the firm ventures into foreign markets.
Born global firms are entirely unique from other major international organizations because they are born doing business abroad: something that many larger firms operate for years before even considering. These distinctive firms are gradually becoming the standard model for how companies do international business.
In the global Xmas spirit
The article is of course depicted in the Xmas spirit merely to emphasize in a fun manner a global startup trend manifesting. A trend that is being facilitated by modern technology, but it’s a necessity for Saas companies to sustain as well. A business trend (or model) that we can proudly say our company – and our brands are part of.
Our team wishes you all the best for 2017! Enjoy the holidays – Lots of Xmas cheer from us to you.
Based upon the excellent written article by the AMD Law Group, and other references used & linked.
photo credits: Photo by Caleb Woods on Unsplash. Photo by Mike Arney on Unsplash