Environmental Factors Influencing the Internationalisation of a New Venture in the German Pork Industry: a Case Study

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Environmental factors influencing the internationalisation of a new venture in the German pork industry: A case study

By George ten Kate

University of Groningen
Faculty of Economics and Business
June 2012

Gerbrand Bakkerstraat 51
9713 HC Groningen
Student number 1565095

This paper offers exploratory insights into the ways in which environmental factors influence the internationalisation of a new low-technology firm, two topics that are largely understudied in the field of international entrepreneurship. By analysing data and literature, the influence of market conditions, industry characteristics and global niche market opportunities are examined, using a
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Research Question
Although a big part of German exports consist of low-technology products, almost all research about factors influencing internationalisation of new ventures, has been done focusing on companies that operate in the high-technology industry. The environment in which these firms operate is very different from the environment in which low-technology firms operate. High-technology firms face high R&D costs, short product life cycles and mostly operate in niche markets (Knight & Cavusgill, 2004). These conditions are very different for low-tech firms (Evers, 2010). Here, R&D costs and product life cycles play no significant role. Since studies about new venture internationalisation are so heavily grounded in the high-tech sector, little is known about the factors that affect the internationalisation of firms in the low-tech sector. This raises the possibility that past findings do not generalize equally well to all economic sectors (Zahra & George, 2002). Furthermore, little research has been done about how environmental factors influence new venture internationalisation, and more research is necessary to find out how these factors influence early internationalisation (Fernhaber, 2007). Environmental factors are factors that a firm cannot control, and that are part of the external environment they operate in (Zou and Stan, 1998). These factors can have a significant push and pull effect on new ventures to internationalise

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