Our findings reinforce prior criticism of BG literature which focussed almost exclusively on the initial internationalisation of BGs, to the exclusion of other phases of their development (Melen and Nordman 2009).
BGs in the pre-start-up/venture creation phase of development (TravelWear), were found to face challenges notably different (Gabrielsson et al.
Our findings extend this and reveal that BGs take advantage of this pre-start-up phase to varying degrees, by exploring ideas, assessing opportunities and locating resources, and that this has important implications for their post-founding performance objectives.
The findings of the study reveal that BGs progress through this phase at different speeds depending, in part, on the strategic decisions made by their owner/managers (discussed in depth below).
Measures of overall effectiveness are relevant in the early international entry-development phase, as BGs invest heavily in new processes, employees, products and markets.
In their international growth/consolidation phase, we observed BGs seek to recoup their investment through sustained financial success.
Building on this, the current study examined the role of internationalisation speed in determining the rate at which BGs are able to progress through the phases of their development.
Furthermore, BGs often operate in niche (specialised) markets, and in highly technical industries, where they introduce unique and innovative products.
Thus through the early international entry-development phase, BGs endure the considerable strains of rapidly entering multiple foreign markets, and the need to repeatedly educate potential customers about the product.
While some BGs were found to internationalise into culturally similar markets to ease challenges associated with differing languages and business systems (TravelWear, WebSource, SysTrain, and GamePlay), others followed their networks into markets with unfamiliar business cultures (DeviceDesign, GlobalHome, and InDesign).
As prescribed by the IP model (Johanson and Vahlne 1977), the challenges associated with difference and uncertainty do, in some cases, encourage BGs to expand initially into psychically close markets.
We confirm that initial selection of psychically distant markets indicates a long-term perspective, whereby BGs pursue the operational performance and overall effectiveness outcomes that will eventually result in financial performance.
By comparison, when BGs are attracted initially into psychically distant markets by their networks and opportunity identification, they tend to spend a longer period of time in their early international entry-development phase.
First, our data confirm that BGs in different phases of development prioritise different performance objectives.
Finally, we use the above analysis of the findings to suggest the following propositions to compare and contrast early international entry/development phase of BGs that initially enter psychically distant markets with those that initially enter psychically close markets.