DOI: http://dx.doi.org/10.1065/lca2002.12.103 - - - Background - - - Small and medium sized enterprises in developed regions, as well as larger Southern firms are more exposed to risk in regards to allocation decisions. This includes expenditures on fixed assets, R&D and environmental management, as well as the choice of suitable markets for the product or service at hand. For either type of firm, the consequences of not selecting, or timing, suitable markets can lead to bankruptcy. - - - Objectives - - - This paper examines means for SMEs to expand internationally given the current fiscal climate, and rapid advances in certain enabling technologies. The goal is to identify a set of criteria which smaller firms can use to globalize which reduce risk and increase access to capital. - - - Methods - - - Case studies are presented of a European Start-Up as well as a century-old Latin American firm, both in the water-treatment sector. The similarities in the risk-reward profiles are used to identify some key strategic guidelines for enterprises wishing to be, selectively, multinational. - - - Results and Discussion - - - Selective multinationality is an immediate plan for international expansion which identifies the most appropriate markets, independent of their proximity to the firms production base or headquarters. At the base of selective multinationality, is the goal to impose the firms product in regions of high growth, high selling price and low risk of price dumping. Therefore, this requires the to resist the temptation to expand to markets based on merely geographical proximity. The globalization strategy should be established, along with environmental management, from the outset of the creation of the firm. It will be shown, herein, to be a key driver in the valuation of High Tech industrial SMEs, in particular those with high risk-high reward tradeoffs. Selective multinationality can best be implemented if the firm in question has a technology which addresses unmet needs in niche markets, where there is an expanding customer base focusing on client relationships and cost effectiveness, and where the multinationals enter from outside the sector via resellers. It will be demonstrated to be effective for startups from developed regions, as well as SMEs from developing/emerging countries, to both of whom the consequences of sub-optimal resource allocation can risk the future of the firm itself. Therefore, SMEs can, with appropriate planning and the integration of marketing and environmental strategies, become, selectively, global firms, with better credit access and sales growth, concomitant with lower risks. The High Tech industrial SME will succeed better if, from the outset, they behave like the organization they want to become, with globalization a key element of strategy, from the business plan foreword. Two case studies are presented, one documenting the water sector and the other the cost savings possible by integrating environmental management into the firm"s strategy. |
