Influence of entry modes on communication strategies of international new ventures in foreign markets: a preliminary study

Abstract

International new ventures (INVs) -those that from the inception seek to use their ressources and to sell their output in international markets -have been the subject of much research for more than a decade. However, research on INVs has so far ignored the importance of communication strategies directed toward foreign stakeholders during the internationalization of these young firms. In addition, INVs may utilize different and at times progressively more complex entry modes into foreign markets (for example, exporting, licensing, direct investment).An important concern is then the necessity to develop and implement appropriate communication strategies towards foreign stakeholders as the firm evolves in terms of its international activities.This study examines communication strategies of INVs in foreign markets when pursuing different entry modes. A communications model is used to develop propositions and these are explored based on interviews with 22 executives in high-tech companies. Insights for managerial practice and for future research are provided. Results suggest that INVs do communicate with different publics as they internationalize; however, they are not taking full advantage of a carefully planned communications strategy or of all the communications tools available. Key wordsInternational New Ventures, modes of entry, communication. This study takes the first step in exploring this process by examining the role of international corporate communications, or "marketing the firm" to international stakeholders (sometimes referred to as public communications or public relations) as opposed to marketing products and services to foreign customers through advertising and promotion). Specifically, this study addresses two research questions: first, whether INVs use different communication strategies when they approach foreign markets in different ways (i.e., using different entry modes); second, whether their communications becomes more formalized as they engage in more complex entry modes.After a brief presentation of INVs and their specific needs for communication during the internationalization process, communications strategy and related propositions will be presented.And since internationalization strategies and practices may differ by industry, these propositions will be investigated and discussed from the viewpoint of high-tech INVs (an industry frequently used in INV studies). Analysis and results are then presented and discussed. Managerial implications are suggested for INV managers. LITERATURE REVIEW International New Ventures (INVs)In the late 1980s, McDougall (1989) Communication and INVsNew ventures cannot rely, as established firms do, on corporate image, brand recognition, or financial track record when attempting to acquire resources from stakeholders for start-up and There is a paucity of models in the communication literature which could be used to evaluate communication strategies and practices of INVs and the overall quality of communication strategy. However, Belch, Belch and Gu...

International strategic alliances of small biotechnology firms: a second-best option?

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