The channel strategies of born globals - Sustainability of using MNC as a channel

Abstract

The Channel Strategies of Born Globals – The Sustainability of Using MNC as a Channel

Objectives of the study The goal of this study is to examine the channel strategy alternatives of born global companies and the sustainability of using MNC as a channel. The research question is: How to ensure the sustainability of using MNC as a channel?

Summary Born globals usually lack the managerial and financial resources required for globalization. It is suggested that in order to overcome the challenge of scarce resources BGs should utilize the large channels of MNC as system integrators / distributors to enable resource efficient and rapid globalization. When using MNCs as a channel the BGs risks becoming overly dependent on their partner MNC. Also the risk of prolonged dependency relationship exists. In order to ensure the sustainability the risks of channel partnership between the BG and the MNC need to be resolved. The empirical part of the study was based on a multiple case study methodology. Four case companies were included in the study. Theoretical framework was built base on a review of existing literature, which also guided the empirical part of the study.

Findings and conclusions The main objective to collaborate with MNC is to overcome the resource constraint faced by the BG case companies and the desire to speed up the globalization process. Also economies of scale are gained. The risk of channel dependency was recognized both in the literature review and in the company interviews and it was seen critical that other additional sales channels should be used. The strategic relationships between BG’s and MNC’s should be mutually beneficial and generate added value for both parties in order to ensure sustainability. Overall careful planning is seen to be the key to sustainable relationship between the born global and multinational corporation providing the large channel.