For much of the history of modern business, entrepreneurial ventures were inherently local during their early years. Most startup companies today, however, consider overseas expansion from their inception.1 Several developments have facilitated the trend. Technological progress — including the development of fast, low-cost telecommunications connections and the advent of the Internet — plus international airline competition and lower cross-border shipping costs for goods make it seem temptingly easy for startup companies to venture abroad.2 Yet it requires a lot of management bandwidth and experience to do things right.3 Entrepreneurs and their managers often underestimate the cost of an expansion move to foreign shores and, more critically, lack a clear conceptual framework for international expansion. Too often the results are haphazard decision making, insufficient intracompany communication and even financial disaster.
Many entrepreneurs behave reactively, expanding abroad in response to stimuli rather than according to a thoughtfully crafted strategy. Granted, it is hard for a company to develop a clear international expansion plan when its business model and organization are new, untested and still evolving. But there are some topics and dimensions with which entrepreneurs should be familiar. Over recent years, I have studied entrepreneurial ventures in more than 20 countries, many of which had expanded across borders. Examining why some of these ventures failed while others succeeded,... To read the complete article, login or sign-up using the form below.
Get a premium subscription today to read this and all MIT Sloan Managmeent Review articles.
More Info.
Buy this article. Purchase one or more copies of this article as a PDF.
Subscribe today to read the most recent articles and the current issue of MIT Sloan Management Review.
Upgrade to premium
Current Subscribers: Do you subscribe to MIT Sloan Management Review? Register for online access.
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription—access to the entire archive of articles.
