Carr, Chris

Kontinen, Tanja

Witt, Alessa

2018-01-25T13:36:44Z

2018-01-25T13:36:44Z

2015-11-24

Current theoretical insights into firm internationalisation have mainly focused on large American multinationals or on smaller early internationalising firms. Global niche players, often competing alongside or even complementary, have been less researched. They, like larger players, often strive to go global and dominate their market segments simply to survive and endure processes of global consolidation and often it is necessary to achieve top global positions. One such successful global niche strategy variant is ‘Global Hidden Champions’ (GHCs), which are low profile, global top three under US$ 5 billion firms, mainly found in Germany (Simon, 2012). The question becomes pressing: how do GHCs reach world market leadership? This study seeks to identify through which internationalisation paths and associated market entry modes 30 GHCs investigated from Germany and Britain reached global dominance and the specific competitive advantages without which such strategies would not have succeeded. This thesis takes an evolutionary historic perspective by distinguishing enduring with less-enduring GHCs, established at various points in time between 1838 and 2007. A qualitative multiple case study approach is used based on 30 cases, 15 from each country. The abductive stance facilitates deductions of existing theoretical frameworks, whilst also allowing exploratory new themes to emerge. Structured and semi-structured interviews, combined with documentation, allow triangulation of findings and help minimise bias. Guided by the conceptual framework, data has been thematically coded, analysed and systematically explored, allowing several new themes to emerge. Not one single GHC was found pursuing the traditional Uppsala Model internationalisation path. Instead 43% were identified as Born Globals (BGs); 20% as Born-Again Globals (BAGs); but no less than 37% emerged as quite different hybrid internationalisers, which because of their quite distinctive traits, were denoted ‘Re- Born-Again Globals’ (Re-BAGs). The analysis involved innovative methodological analysis, which further clarified some partial overlap of BGs, BAGs, and re-BAGs with Uppsala Model features, yet decided differences in terms of tempo and direction. All three alternative paths led to top three global market leadership positions, depending on the GHCs context and historical circumstances. Nevertheless, recently established GHCs pursued BG paths, whereas more enduring GHCs almost all followed BAG and re-BAG paths. Younger British GHCs frequently embarked on early proactive paths, whilst their more enduring German equivalents pursued more belated internationalisation routes. History emerged as pivotal. BAGs and re-BAGs were both distinguished by critical incidents which, in all 17 cases, shifted strategies on to much more proactive internationalisation paths. German GHCs, though, shifted primarily in response to technology advances, whereas British GHCs typically responded to specific management appointments. Literature on accelerated internationalisation paths, such as in relation to BGs, remains unclear on commitments beyond trade. Yet, 90% of GHCs deployed substantial foreign direct investment (FDI), in addition to mere trade activity. Initially, German GHCs grew organically focusing on neighbouring markets. In contrast, British GHCs often used acquisitions and targeted more global, in particular, Commonwealth markets. FDI thus emerged as a crucial addition to export activity in all three alternative paths followed by BGs, BAGs and re-BAGs enabling them to sustain leading global market positions. Yet, such paths were in turn contingent upon competitive advantages. GHCs from both countries complied remarkably closely with 6 out of 8 of Simon’s (2009) identified theoretical HC Model traits: being ‘leadership with ambitious goals’; ‘innovation’; ‘high-performance employees’; ‘closeness to customer’; ‘globalisation’, and ‘focus’. More in depth, albeit exploratory, analysis further uncovered the critical role played by ‘visions and values’ and ‘brand’, leading to a new tentative theoretical GHC Model. This new Model, moreover, recognises a virtuous cycle of market leadership advantages from which more enduring GHCs particularly benefitted. It also integrates comfortably with Teece’s (2014) model of dynamic capabilities, extending his framework by including market leadership approaches and more precise competitive advantages of the GHC Model, alongside more specific concepts relating to entrepreneurial orientation. In summary, this study contributes to the knowledge of how both long-standing and newer German and British GHCs conquer global markets by unveiling their specific and successful internationalisation paths, market entry mode choices and their underlying competitive advantages.

http://hdl.handle.net/1842/26039

en

The University of Edinburgh

Witt, A., and Carr, C. (2013). A critical review of hidden champions and emerging research findings on their international strategies and orientations. In G. Cook and J. Johns (Eds.), The Changing Geography of International Business (pp. 95-113). London: Palgrave Macmillan.

Witt, A. (2010). Internationalisation Strategies of Hidden Champions. Hamburg: Management Laboratory Press.

hidden champions

global niche strategy

Born Globals

Global hidden champions: the internationalisation paths, entry modes and underlying competitive advantages of Germany’s and Britain’s global ‘top three’ niche players

Thesis or Dissertation

Doctoral

PhD Doctor of Philosophy