An Eclectic Perspective on the Internationalization of Australian Mobile Services SMEs

Introduction

The objective of this study is to investigate the factors that influence the internationalization of knowledge-based service firms operating in the mobile services industry. It culminates with a conceptual framework that explains the internationalization of knowledge-based mobile services firms from developed to developing countries. We explore this in the Australian telecommunications industry using mobile services as an illustrative example. In the process, we respond to calls for further research in service sectors that are characterized by a lower degree of tangibility and lower level of consumer-producer interaction (Coviello & Martin, 1999; Freeman et al., 2010; Kudyba, 2006; Noorderhaven & Harzing, 2009). A mobile service is an activity or series of activities that occur when mobile consumers interact with systems or service provider employees with the support of mobile telecommunications networks (Bouwman et al., 2007a; Bouwman, Haaker & De Vos, 2007; Mafé, Blas & Tavera-Mesías, 2010; Van De Kar, 2004). Examples of mobile services include mobile e-mail, SMS, and MMS services, content downloads, mobile ticket reservations, mobile stock trading, and mobile TV (Bina & Giaglis, 2005).

This chapter builds on existing knowledge concerning the internationalization of knowledge-based service firms. The proposed framework refines current understanding of internationalization behaviors of knowledge-based service firms by taking an eclectic approach. Many knowledge-based small and medium-sized enterprises (SMEs) in developed economies are becoming increasingly active in international markets particularly in the mobile services industry (Styles, Patterson & La, 2005). The activities and processes surrounding their internationalization are important phenomena to understand from both research and managerial perspectives for many reasons. First, mobile services SMEs differ from larger firms in their managerial style, independence, ownership, and scale/scope of operations (Lopez, Kundu & Ciravegna, 2009). They are also likely to be limited in financial, management, human, and information resources, with managerial processes and structures that are less rigid, sophisticated, and complex than those in larger mobile services firms (Lopez, Kundu & Ciravegna, 2009). Second, although attention has been paid to service firms in the internationalization literature (for example, Coviello & Martin, (1999)), the knowledge-based mobile services sector have only received sparse attention (Lopez, Kundu & Ciravegna, 2009). There is paucity of research into what drives and inhibits the successful export of mobile services from developed towards emerging markets by SMEs (Lopez, Kundu & Ciravegna, 2009; Styles, Patterson & La, 2005).

Finally, extant research shows that internationalization varies across industries with respect to both complexity and cost (Lopez, Kundu & Ciravegna, 2009). In knowledge-intensive industries such as the mobile service industry, once created, the products, can be replicated at relatively low marginal cost, and therefore, the firms that produce these products can internationalize rapidly without necessarily establishing growth in their home market (Autio, Sapienza & Almeida, 2000; Bell et al., 2003). Thus, the complexities and idiosyncrasies of knowledge-based mobile services settings can bring about significant managerial challenges to internationalization (Luo, 2007) including the need to effectively manage “a multitude of structures, strategies, and environments” (Musteen, Datta, & Herrmann 2009, p. 321) which suggests that further research is required in this area.