Abstract
The competition currently facing small and medium sized enterprises (SMEs) is characterized by three interacting trends: market globalization; enhanced e-commerce technology; and the growth of the service economy. With respect to the first trend, globalization has led SMEs into world markets and some are rapidly becoming global players (Chetty and Blankenburg Holm, 2000; Oviatt and McDougall, 1997). Understanding the processes that underpin success is of paramount importance to academics and practitioners alike (Beamish et al., 1999; Cavusgil and Zou, 1994). With respect to the second trend, e-commerce has redefined the nature of global business (Karavdic and Gregory, 2005; Quelch and Klein, 1996). By facilitating a direct link between the firm and customer, e-commerce provides a low cost gateway to global markets (Etemad and Wright, 1999). For many SMEs, online activity accelerates the growth dynamics by increasing global sales (Morgan- Thomas and Bridgewater, 2004; Raymond et al., 2005); reduces global operational costs (Lohrke et al., 2006; Matlay and Westhead, 2005); or enhances the rate and geographical spread of foreign market entries (Kim, 2003).
TopBackground
The most salient property of e-commerce is its international reach: multiple foreign markets maybe entered (Kim, 2003; Quelch and Klein, 1996), without investing in overseas assets (Yamin and Sinkovics, 2006). Evidence suggests that online activity tends to be more dramatic and dynamic than traditional approaches (Kim, 2003) and is regarded as a means of achieving international growth (Gabrielsson et al., 2004).
Key Terms in this Chapter
E-capabilities: reflect qualitative and quantitative differences between firms in the level of adoption of e-commerce and its strategic usage.
Goods dominant logics: place the emphasis on closing the transaction.
Online globalization: denotes the processes of international expansion of the firm achieved solely in online environments or with the assistance of online business.
Service dominant logics: place the emphasis on managing the exchange to maximize the potential for co-creating value.
Global online performance: denotes the extent to which firm’s globalization objectives are achieved via e-commerce and measures online contribution to global sales, profits, number of foreign market and overall global performance.
International capabilities: capture the depth and breadth of firm’s knowledge, experience and abilities to support the process of internationalization.
Co-created value: occurs when the parties engaged in a service or knowledge exchange combine ‘forces’ to ensure that each derives enhanced benefit from the relationship.