Analaysing the Components of High-tech Businesses on the Speed of Internationalization (Case Study: Pharmaceutical Industry)

Document Type : Research Paper

Authors

1 Department of Business Management and Entrepreneurship, Central Tehran Branch, Islamic, Azad University, Tehran, Iran.

2 Department of Business Management, Central Tehran Branch, Islamic Azad University Tehran, Iran.

3 Department of Corporate Entrepreneurship, Faculty of Entrepreneurship, University of Tehran, Tehran, Iran

4 Department of Industrial Management, Central Tehran Branch, Islamic Azad University Tehran, Iran.

10.22059/jed.2024.361823.654230

Abstract

Objective: Today, technological businesses tend to be present in international markets and improve their speed by adopting a competitive advantage. The speed of internationalization is an important issue for managers who want to enter or develop international markets. From a managerial point of view, companies should determine the speed of internationalization development because speed is a key aspect of the company's internationalization strategies and should balance the company's resources and international opportunities due to the short life cycle of products. Pharmaceutically, the speed of entering international markets in order to gain more market share is an important management challenge in the decision-making process to enter foreign markets. The purpose of this study is to measure the impact of the contextual components of high-tech businesses on the speed of internationalization.
Method: The current research is explanatory in nature; In terms of practical aim and in terms of gathering descriptive-correlational information, it is a case study. The selecton criteria of pharmaceutical companies are a) having exports in the last 10 years and b) having pharmaceutical innovations at the international level, the total number of the statistical population of 424 pharmaceutical companies was determined. The unit of research in the quantitative method is the person, that is, the managers of the pharmaceutical companies, according to Morgan's table, 201 people were selected using random-systematic sampling, and 149 questionnaires were applied for quantitative data analysis.
SPSS version 22 software was used to determine the distribution of research data. In the following, to analyze the measurement of indicators and test the hypotheses of structural equations, PLS software with version 3 was used.
The results in the quantitative section show that the coefficient of determination (R2) of 0.723, 0.626, 0.877 independent variables determine the dependent variables. The following variables determine the dependent variable with the following values:Propulsion 0.852, Competiion Environment 0.481,Target market fit 0.639,production actions 0.521. Therefore, the speed of internationalization is significant with a confidence level of 0.95. In other words, the T value of each variable is more than 1.96.
The results in the quantitative section show that the coefficient of determination (R2) of the independent variables is 0.723, 0.626, and 0.877 of the dependent variables. Therefore, the speed of internationalization is significant with a confidence level of 0.95. In this research, the Q2 criterion for the competitive environment is 0.498, the fit with the target market is 0.485, and the speed of internationalization is 0.649, which expresses the strong predictive power in the structural model of the research. T-statistic was used to check the assumed relationships between the components.
Findings: The results of the hypothesis test showed that the drivers, which are considered as knowledge, perception and networks, have a significant effect on the competitive environment based on the domestic market and the foreign market, which shows the confirmation of the first hypothesis. Drivers have a significant effect on the suitability of the target market in the pharmaceutical industry, and therefore the second hypothesis is confirmed. The competitive environment has a significant effect on the speed of internationalization in the pharmaceutical industry, and its coefficient is 0.852. The coefficient of effect of fit with the target market on the speed of internationalization in the pharmaceutical industry is 0.639, and the hypothesis that fit with the market has an effect on the speed of internationalization in the pharmaceutical industry is confirmed. The drivers on the speed of internationalization with the control variable of production measures in the pharmaceutical industry has an impact factor of 0.521 and therefore this hypothesis is confirmed. To test the main hypothesis, 5 sub-hypotheses have been considered, and the t-statistics related to all fields are higher than 1.96 and confirmed, so all five research hypotheses are confirmed.
Conclusion: As the results showed that the competitive environment and fit with the target market have a great effect on the speed of internationalization, so that the analysis of competitive environments and the extraction of the consumption behavior of the target market on the type of intensity and speed of internationalization as well as the international branding of the business. And technological works have an important effect. As different markets have different conditions, different consumption behavior, different standard and quality characteristics and different feedbacks regarding the performance of businesses, therefore, they require different entry suitability and analysis. So that different markets have different conditions, different consumption behavior, different standard and quality characteristics and different feedbacks regarding the performance of imported businesses. Also, by adjusting their business model and providing value propositions in accordance with those markets and adjusting production or service measures required in those markets, these businesses can have a high level of entry and impact, and thus companies can export With the least involvement in local activities, they can offer their products in foreign markets and earn more profit. The results of the current research can be used in the countries of the region due to the structural similarity of the drug supply chain and the value chain in drug raw materials and the type of drug marketing. This model was tested for the first time in the pharmaceutical structure of Iran, the pharmaceutical industry is worthy of internationalization, but they have not reached the speed of internationalization.

Keywords

Main Subjects

References

Altintas, M. H., Vrontis, D., Kaufmann, H. R., & Alon, I. (2011). Internationalization, market forces and domestic sectoral institutionalization. European Business Review, 23(2), 215-235. Doi: 10.1108/09555341111111228
Asheim, B. T., & Isaksen, A. (2003). SMEs and the regional dimension of innovation. Regional innovation policy for small-medium enterprises, 21-46. Doi: 10.4337/9781781009659
Bagheri, M., Mitchelmore, S., Bamiatzi, V., & Nikolopoulos, K. (2019). Internationalization orientation in SMEs: The mediating role of technological innovation. Journal of International Management, 25(1), 121-139. Doi: /10.1016/j.intman.2018.08.002
Bahrami, Azizi, Badiezadeh, & Rizgi Shirsewar. (2019). Institutional factors influencing the internationalization of pharmaceutical technology companies. Health Management, 10(No. 1), 19-30. (in Persian)
Bell, J., McNaughton, R., Young, S., & Crick, D. (2003). Towards an integrative model of small firm internationalisation. Journal of international entrepreneurship, 1(4), 339-362. Doi: 10.1023/A:1025629424041
Booltink, L. W., & Saka-Helmhout, A. (2018). The effects of R&D intensity and internationalization on the performance of non-high-tech SMEs. International Small Business Journal, 36(1), 81-103. Doi: 10.1177/0266242617707566
Bruton, G. D., & Wan, C. C. (1994). Operating turnarounds and high technology firms. The Journal of High Technology Management Research, 5(2), 261-278. Doi: 10.1016/1047-8310(94)90006-X
Buckley, P., & Casson, M. (2009). The multinational enterprise revisited: The essential Buckley and Casson. Springer.
Calof, J. L., & Beamish, P. W. (1995). Adapting to foreign markets: Explaining internationalization. International business review, 4(2), 115-131. Doi: 10.1016/0969-5931(95)00001-G
Cerrato, D., Crosato, L., & Depperu, D. (2016). Archetypes of SME internationalization: A configurational approach. International Business Review, 25(1), 286-295. Doi: 10.1016/j.ibusrev.2015.05.010
Chandrasekaran, A., Linderman, K., Sting, F. J., & Benner, M. J. (2016). Managing R&D project shifts in high‐tech organizations: A multi‐method study. Production and Operations Management, 25(3), 390-416. Doi: 10.1111/poms.12410
Chang, R. X., & Ogasavara, M. H. (2021). The impact of institutional distance and experiential knowledge on the internationalization speed of Japanese MNEs. Asian Business & Management, 20(5), 549-582. Doi: 10.1057/s41291-019-00093-z
Chao, M. C. H., & Kumar, V. (2010). The impact of institutional distance on the international diversity–performance relationship. Journal of World Business, 45(1), 93-103. Doi: 10.1016/j.jwb.2009.04.005
Chen, H. L., & Huang, Y. (2004). The establishment of global marketing strategic alliances by small and medium enterprises. Small Business Economics, 22(5), 365-377. Doi: 10.1023/B:SBEJ.0000022207.90510.46
Chetty, S., & Campbell-Hunt, C. (2003). Explosive international growth and problems of success amongst small to medium-sized firms. International Small Business Journal, 21(1), 5-27. Doi: 10.1177/0266242603021001719
Chetty, S., & Campbell-Hunt, C. (2004). A strategic approach to internationalization: a traditional versus a “born-global” approach. Journal of International marketing, 12(1), 57-81. Doi: 10.1509/jimk.12.1.57.25651
Chetty, S., Johanson, M., & Martín, O. M. (2014). Speed of internationalization: Conceptualization, measurement and validation. Journal of World Business, 49(4), 633-650. Doi: 10.1016/j.jwb.2013.12.014
Cui, A. P., Walsh, M. F., & Gallion, D. (2011). Internationalization challenges for SMEs and global marketing managers: A case study. International Journal of Business and Social Research (IJBSR), 1(1), 57-69.
Deng, Z., Zhu, Z., Johanson, M., & Hilmersson, M. (2022). Rapid internationalization and exit of exporters: The role of digital platforms. International Business Review, 31(1), 101896. Doi: 10.1016/j.ibusrev.2021.101896
Etemad, H., & Wright, R. W. (1999). Internationalization of SMEs: management responses to a changing environment. Journal of International Marketing, 7(4), 4-10. Doi: 10.1177/1069031X9900700401
Etemad, H., & Wright, R. W. (2003). Internationalization of SMEs: toward a new paradigm. Small Business Economics, 1-4. Doi: 10.1023%2FA%3A1020274419262
Hohenthal, J., Johanson, J., & Johanson, M. (2015). Network knowledge and business-relationship value in the foreign market. In Knowledge, networks and power (pp. 187-224). Palgrave Macmillan, London. Doi: 10.1016/j.ibusrev.2013.08.002
Hosseini, K., Osman, M. S., Mirzazadeh, M., & Rabiei, F. (2020). Investigation of different wave structures to the generalized third-order nonlinear Scrödinger equation. Optik, 206, 164259. Doi: 10.1016/j.ijleo.2020.164259
Hurmerinta-PeltomÄki, L. (2003). Time and internationalisation theoretical challenges set by rapid internationalisation. Journal of International Entrepreneurship, 1(2), 217-236.

Hutchinson, K., Quinn, B., Alexander, N. S., & Doherty, A. M. (2006). The internationalization of SME specialist retailers. Doi: 10.1023/A:1023856302314

Javalgi, R. R. G., & Todd, P. R. (2011). Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India. Journal of Business Research, 64(9), 1004-1010. Doi: 10.1016/j.jbusres.2010.11.024
Karadeniz, E. E., & Göçer, K. (2007). Internationalization of small firms: a case study of Turkish small‐and medium‐sized enterprises. European Business Review, 19 (5), 387-403. Doi: 10.1108/09555340710818978
Kaynak, H., & Hartley, J. L. (2005). Exploring quality management practices and high tech firm performance. The Journal of High Technology Management Research, 16(2), 255-272. Doi: 10.1016/j.hitech.2005.10.002
Kirzner, I. M. (1997). Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of economic Literature, 35(1), 60-85. Doi: 10.2307/2729693
Kline, R. B. (2015). Principles and practice of structural equation modeling. Guilford publications, 262-298.
Langseth, H., O'Dwyer, M., & Arpa, C. (2016). Forces influencing the speed of internationalisation: An exploratory Norwegian and Irish study. Journal of Small Business and Enterprise Development, 23(1), 122-148. Doi: 10.1108/JSBED-10-2013-0155
Lu, J. W., & Beamish, P. W. (2001). The internationalization and performance of SMEs. Strategic management journal, 22(6‐7), 565-586. Doi: 10.1002/smj.184
Luo, Y., Zhao, J. H., & Du, J. (2005). The internationalization speed of e‐commerce companies: an empirical analysis. International Marketing Review, 22(6), 693-709. Doi: 10.1108/02651330510630294
Mallick, D. N., & Schroeder, R. G. (2005). An integrated framework for measuring product development performance in high technology industries. Production and Operations Management, 14(2), 142-158. Doi: 10.1111/j.1937-5956.2005.tb00015.x
Mihailova, I., Shirokova, G., & Laine, I. (2015). New venture internationalization from an emergent market: unexpected findings from Russia. Journal of East-West Business, 21(4), 257-291. Doi: 10.1080/10669868.2015.1067276
Moriarty, R. T., & Kosnik, T. J. (1989). High-tech marketing: concepts, continuity, and change. MIT Sloan Management Review, 30(4), 7.
Naidu, G. M., Cavusgil, S. T., Murthy, B. K., & Sarkar, M. (1997). An export promotion model for India: Implications for public policy. International business review, 6(2), 113-125. Doi: 10.1016/S0969-5931(96)00041-8
Neubert, M. (2018). The impact of digitalization on the speed of internationalization of lean global startups. Technology Innovation Management Review, 8(5), 44-54. Doi: 10.22215/timreview/1158
Neubert, M., & Krogt, A. V. D. (2017). Lean internationalisation of high-tech firms. International Journal of Teaching and Case Studies, 8(2-3), 133-150. Doi: 10.1504/IJTCS.2017.086679
Oviatt, B. M., & McDougall, P. P. (2005). Defining international entrepreneurship and modeling the speed of internationalization. Entrepreneurship theory and practice, 29(5), 537-553. Doi: 10.1111/j.1540-6520.2005.00097.x
Paul, J., & Mas, E. (2019). Toward a 7-P framework for international marketing. Journal of Strategic Marketing, 1–21. Doi: 10.1080/0965254X.2019.1569111
Pfeffer, J. (2001). What's wrong with management practices in Silicon Valley? A lot. To prevent high turnover, burnout and loss of employee commitment, learn to avoid four practices that are undermining some high-profile companies. MIT Sloan Management Review, 42(3), 101-103.
Preece, S. B., Miles, G., & Baetz, M. C. (1999). Explaining the international intensity and global diversity of early-stage technology-based firms. Journal of Business venturing, 14(3), 259-281. Doi: 10.1016/S0883-9026(97)00105-5
Qian, G., & Li, L. (2003). Profitability of small‐and medium‐sized enterprises in high‐tech industries: the case of the biotechnology industry. Strategic management journal, 24(9), 881-887. Doi: 10.1002/smj.344
Sabokro, M., Masud, M. M., & Kayedian, A. (2021). The effect of green human resources management on corporate social responsibility, green psychological climate and employees’ green behavior. Journal of Cleaner Production, 313, 127963. Doi: 10.1016/j.jclepro.2021.127963
Saghebi, S., Alizadeh, A., Mohammadzaheri, M., & Habibisenobari, T. (2019). Relationships of managers’ entrepreneurial perception and internationalization speed in small and medium-sized enterprises (SMEs). Journal of Global Entrepreneurship Research, 9(1), 1-19. Doi: 10.1186/s40497-019-0151-9
Shanklin, W. L., Ryans, J. K., & Ryans, J. C. (1987). Essentials of marketing high technology. Lexington books.
Spence, M., & Crick, D. (2006). International opportunity recognition and commercialisation among born global firms: an explonary study. Doi: 10.20381/ruor-1704
Suh, Y., & Kim, M. S. (2014). Internationally leading SMEs vs. internationalized SMEs: Evidence of success factors from South Korea. International Business Review, 23(1), 115-129. Doi: 10.1016/j.ibusrev.2013.03.002
Wach, K. (2015). Entrepreneurial orientation and business internationalisation process: The theoretical foundations of international entrepreneurship. Entrepreneurial Business and Economics Review, 3(2), 9-24. Doi: 10.15678/EBER.2015.030202
Wu, S. D., Erkoc, M., & Karabuk, S. (2005). Managing capacity in the high-tech industry: A review of literature. The engineering economist, 50(2), 125-158. Doi: 10.1080/00137910590949887
Zahra, S. A. (1993). A conceptual model of entrepreneurship as firm behavior: A critique and extension. Entrepreneurship theory and practice, 17(4), 5-21. Doi: 10.1177/10422587930170040
Zhou, L., & Wu, A. (2014). Earliness of internationalization and performance outcomes: Exploring the moderating effects of venture age and international commitment. Journal of World Business, 49(1), 132-142. Doi: 10.1016/j.jwb.2013.10.001
Zucchella, A., & Servais, P. (2012). The internationalisation process of small-and medium-sized firms and the liability of complexity. International Journal of Entrepreneurship and Small Business, 15(2), 191-212. Doi: 10.1504/IJESB.2012.045204
 

Files

Share

How to cite

Statistics