Exporting Theories | Dorothy Angeles

Summary

This video explores various theories of exporting, focusing on the role of business innovators in the export process. It covers the aggressive, risk-tolerant behaviors of exporters, the diffusion of innovation theory, knowledge development in foreign market commitment, pre-export behaviors, and the stage hierarchy approach. These theories highlight the incremental nature of decision-making in export strategies and emphasize how company history, market knowledge, and innovation drive international expansion. Through case studies and models, the video provides insights into how firms assess and navigate the challenges of entering new global markets.

Takeaways

• 😀 Exporters are aggressive, competitive, and high-risk takers who view export opportunities as strategies for entering new markets or initiating internationalization.
• 😀 Younger companies are more likely to innovate and export, while older companies tend to focus on solving internal problems before considering exporting.
• 😀 The Export Behavior as Marketing Innovation Theory emphasizes that export behavior is driven by the company's willingness to take risks in unfamiliar markets.
• 😀 The Diffusion of Innovation Theory, derived from small businesses in Nebraska, connects the decision to export to a company's age and their innovation and risk-taking tendencies.
• 😀 Exporting decisions often result from a series of small, incremental choices rather than a single large decision, as highlighted by the Knowledge Development and Increasing Foreign Market Commitment Model.
• 😀 The Pre-Export Behavior Model emphasizes four factors influencing export decisions: firm goals, awareness of export opportunities, product type, and the company’s history and expansion attempts.
• 😀 Companies experiencing innovation problems often look to international markets as solutions, making export a strategic response to internal challenges.
• 😀 The Stage Hierarchy Approach models export behavior as a series of stages in the company's lifespan, influenced by factors like market growth and new market expansion.
• 😀 The Stage Hierarchy Approach suggests that a firm’s desire to innovate and export increases over time as the company matures and gains experience.
• 😀 The theories presented provide diverse perspectives on why companies decide to export, from risk tolerance and innovation to incremental decision-making processes.
• 😀 Exporting is viewed as a long-term strategy for growth and profit, with companies gradually increasing their commitment to foreign markets as they grow and innovate.

Q & A

What are the key exporting theories discussed in the script?

The script discusses five key exporting theories: 1) Export Behavior as a Marketing Innovation, 2) Diffusion of Innovation Theory, 3) Knowledge Development and Increasing Foreign Market Commitment Model, 4) Pre-Export Behavior Model, and 5) Stage Priority Approach.

How does the Export Behavior as a Marketing Innovation theory define exporters?

According to the theory, exporters are described as aggressive, competitive, and risk-tolerant individuals or companies. They view exporting as a strategy for entering new territories or initiating internationalization despite the risks of potential losses.

What does the Diffusion of Innovation Theory focus on in the context of exporting?

The Diffusion of Innovation Theory, based on a study of 35 small businesses in Nebraska, emphasizes the motives and biographical factors that influence business owners to decide on exporting. It suggests that younger companies are more open to risk-taking and innovation, while older companies tend to focus on problem-solving before considering exporting.

What role does the age of a company play in the Diffusion of Innovation Theory?

The theory suggests that younger companies are generally more willing to take risks and innovate, which encourages them to pursue exporting. In contrast, older companies are more cautious and prioritize addressing internal problems before considering internationalization.

What is the central idea behind the Knowledge Development and Increasing Foreign Market Commitment Model?

This model, based on a study of Swedish firms, suggests that exporting and internationalization are often the result of incremental and small decisions, rather than large, impulsive ones. It highlights that companies commit to exporting as a way to increase long-term profits and gradually build knowledge and experience in foreign markets.

What does the Pre-Export Behavior Model focus on?

The Pre-Export Behavior Model examines the different pre-export behaviors businesses exhibit before deciding to export. It identifies four key factors: the company's goals, product type, awareness of export opportunities, and the company’s history and past attempts at international expansion.

How does the Pre-Export Behavior Model explain the decision to export?

According to the Pre-Export Behavior Model, a company's history and experience are crucial factors in deciding whether to export. Companies facing innovation problems or looking to expand beyond their domestic market are more likely to consider internationalization.

What does the Stage Priority Approach theory suggest about export behavior?

The Stage Priority Approach views export behavior as a staged process, with companies progressing through various levels of export involvement. This progression is influenced by variables like the firm's growth stage and their desire for new market expansion.

What type of businesses was the Stage Priority Approach based on?

The Stage Priority Approach was based on a study where questionnaires were mailed to several small and medium-sized firms in Wisconsin. These firms were analyzed to understand their export behavior at different stages in their development.

How do the theories presented in the script relate to the long-term strategy of companies?

The theories discussed all emphasize the role of exporting as a long-term strategy for growth and internationalization. Whether through risk-taking, incremental decisions, or addressing internal issues, companies view exporting as a way to expand their market reach, increase profitability, and build expertise in global markets.