Research Article Analysis
The article’s authors sought to explore the existing determinants towards international expansion, particularly in academic startups. The research focused on determinants such as presence of public commuting means, technological capabilities as well as the parent universities’ research yardsticks (Okamuro & Suzuki, 2017). Moreover, the research utilized a survey data of about 448 academic startups already been established in Japan. Using the ordered logit model, the authors of this article established that most academic startups are normally inclined to expand their businesses in international markets as opposed to expanding locally. Furthermore, the article found out that the presence of strong determinants such as public support and strong technological capabilities forced most startups to establish their businesses in geographical regions having high ration as far as exporting small firms or those having an excellent research population (Okamuro & Suzuki, 2017).
Identifying the problem
This research was focused on identifying the determinants that force many businesses to expand their businesses internationally and how they benefit from such ventures (Okamuro & Suzuki, 2017). There are many reasons that force businesses to expand globally or to internationalize their businesses. However, the main reason for internationalization is to seek new market opportunities where businesses will be able to sell their products and services all year round (Pollak, 2011). This mostly involves drawing up effective strategies of dealing with highly specialized products or services that cannot be typically accessed without the process of internationalization.
Therefore, in this case, there is an increased international expansion of technologically based universities, which has resulted to increased academics startups. It is important to note that before businesses expand their business activities in the international scene, they spend significant amount of time in ensuring that they are well established in domestic markets (Baker, 2012). This is an important prerequisite, as it tends to solidify business foundations as well as improving their balance sheet. However, it is worth mentioning that critical determinants such as advancement in information and communication technologies coupled with current globalization process in world economies play crucial parts in forcing many businesses to conduct their business activities beyond their domestic markets by establishing themselves overseas (Mognetti, 2003).
In addition, positioning and learning advantages of younger firms as opposed to other older firms in new business markets and therefore, globalization are other strategic determinants that make earlier start ups a viable choice. The article points out that a survey was carried out in Italy. The reading established that approximately 60% of the universities conducted their business undertakings in other nations. Moreover, more than half of the academic startups that were surveyed indicated that they had already begun engaging in processes of international expansion or had already done so. The survey also established that more than 80% of the academic startups indicated that they had a strong interest in expanding their businesses internationally (Okamuro & Suzuki, 2017).
Why this is the underlying problem
This is an underlying problem of discussion because the research seeks to explore factors that shape orientation of startups as far as international business expansion is concerned. Previous case studies including empirical studies had established that most managers of internationalized ventures tend to posses both overseas and manufacturing experiences. Besides, they also place high value towards innovation as well as product differentiation as compared to domestically operated business ventures (Okamuro & Suzuki, 2017).
It is also worth noting that investors are crucial during business operations and more particularly during business expansions. In this regard, since they provide venture capital, they have significant impact as to whether business ventures have the capacity to expand internationally or not. This is particularly true as most internationally based venture businesses provide access to opportunities as far as initial public offering is concerned as well as to foreign customers (Ansoff, 2015). As far as academic business startups are concerned, a vast domestic network has the capacity of providing businesses with orientations of venturing their business operations in the international market. However, this competitive advantage is not applicable to very old business ventures that are small.
Relate the research to the problem
Today, there is an increase in academic entrepreneurial activities in the business environment. However, as mentioned in this article, the establishment of academic startups has proved to be one of the most binding and riskiest types of entrepreneurship. However, despite such demanding nature of such business venture, there is an increase in the number of established international startups by university researchers. The commercialization processes involved in academic research that typically develops startups is prudent as it permits for aggressive employment of university-based processes (Enen, 2011). In this regard, academic ventures at initial stages become optimal points as far as commercializing inventions that are technologically based. Moreover, commercialization of university-based research is increasingly becoming fruitful in sectors, which have various companies thereby effectively supporting and protecting patents of technology (Okamuro & Suzuki, 2017).
Defining how the problem could help with solutions
The first major determinant of the orientation is directed or aimed towards development of business operations internationally is technological capabilities ventures (Okamuro & Suzuki, 2017). This is because companies that have proved to be innovative tend to have an easier process of trading in goods and services across international borders as opposed to those companies who do not invest in innovative activities. In addition, it is important to have competitive advantages over other firms already operating in foreign countries as such aids in reaching the target market. This essentially means that it is important for businesses to invest in high-quality technology typically protected through patents as that will contribute towards the exchange of technological skills with other international businesses (Okamuro & Suzuki, 2017).
Ansoff, H. I. (2015). Corporate strategy: An analytical approach to business policy for growth and expansion. New York: McGraw-Hill.
Baker, J. C. (2012). International business expansion into less-developed countries: The International Finance Corporation and its operations. New York: Routledge.
Enen, J. (2011). Venturing abroad: International business expansion via joint ventures. Blue Ridge Summit, PA: Liberty Hall Press.
Mognetti, J. F. (2003). Organic Growth: Cost-Effective Business Expansion from Within. Chichester: John Wiley & Sons.
Okamuro H. & Suzuki S. (2017). Determinants of Academic Startups’ Orientation toward International Business Expansion. Journal of Administrative Science. 2017, 7(1), 1; doi: 10.3390/admsci7010001
Pollak, P. (2011). Fine chemicals: The industry and the business. Hoboken, NJ: J. Wiley & Sons.