An Analysis of the Influence of IT on the Internationalisation of SMEs

Imke Forster & Mario Eberspächer

Student thesis: Master thesis

Abstract

Motivation – Small and medium sized enterprises (SMEs) are an essential contributor to the European Union’s economy. In today’s globalised world, products are traded internationally. In order to sell their products on multiple markets, SMEs need to leverage their sustainable competitive advantage (SCA). One possibility to achieve a SCA is through the use of information technology (IT). An IT-based SCA can be gained from a unique IT or an efficient IT set-up. In their internationalisation process, SMEs face two types of barriers, which are defined as internal and external constraints. One aid to overcome these constraints is the use of the firms’ IT-based SCA. Not much of the internationalisation research has looked at SMEs. Additionally, the use of IT as source of SCA in SMEs has not been extensively investigated. The thesis contributes to closing this research gap by answering the following research question:
How can the use of an IT-based sustainable competitive advantage help small and medium- sized enterprises to internationalise?
Approach – Based on the theoretical background, a focal framework is developed that shows the expected relationship between an IT-based SCA and internationalisation. The thesis conducts a case study with three German SMEs. One to two people from each firm were interviewed in order to gain deeper insights into the firms’ internationalisation process and their usage of IT. The focus of the analysis is on two internationalisation entry modes of SMEs, exporting and Foreign Direct Investment, and the differences between these two, which are evaluated in the discussion by comparing the findings of the case interviews on entry mode group level with empirical findings. Findings – The conducted case study shows that an IT-based SCA supports SMEs in their internationalisation. With the help of an IT-based SCA the barriers to internationalisation can be overcome. Other factors, such as personal ties in the concept of social capital have to be also recognized as moderators in the internationalisation process. The generalisability of the given results, in form of the six propositions, has to be further investigated in the future. The thesis aims to give a deep understanding of the development in the case firms, but does not aim at giving a universal answer to the research question.
Implications – Based on the research, several implications of both practical and theoretical nature are conducted. The most important practical implications for managers is to raise awareness of the role that IT plays in their firms and focus on improving the IT set-up. The theoretical implications focus mainly on the limited generalisability of the case study’s findings as well as on the limited literature available on entry mode choice and IT-based SCA of SMEs.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages132
SupervisorsLarissa Rabbiosi