Theoretical analysis of Out2Bounds Flashcards
What is the into to the theory section
Out2Bounds internationalisation provides a good example of how theory and practice in IB work together. The company’s global pathway can be best understood through a combination of multiple established IB theories. Most notably the Uppsala model, Network theory and the born global perspective, these frameworks can explain the reasoning behind out2bounds decisions and help assess the effectiveness of its approach.
What framework resonates with the firm the most
The Uppsala model, a case of incremental market commitment
Who developed Uppsala model and what is it ?
Johanson and Vahlne 1977, they state that firms start with markets geographically and culturally close. This helps gain knowledge and resources which can then facilitate expansion into further away markets
How to relate this to Out2Bounds, Uppsala
-First phase of expansion was into CEE, where shared business practices, cultural proximity and geographical closeness helped reduce risk
Relate Uppsala to phase 2 of expansion
-Only after they had solidified themselves in CEE did they company feel comfortable enough to expand into more diverse markets
What philosophy was used by the company
Out2Bounds employed a “test and learn” philosophy as it used low commitment and short-term techniques to trial a new location before expending huge amounts of capital and committing full time
Final sentence in Uppsala paragraph
From this it is clear that their strategy aligns with the Uppsala model as it focused on gradual learning and increasing resources before a full global expansion.
Explain the network theory
It compliments the Uppsala model, emphasizing that firms internationalise not just through internal capabilitirs but by leveraging interpersonal connections and institutional networks
How does this relate to Out2Bounds
-Rather than attempting to enter markets through joint ventures, the company sought a network of clients, partners and collaborators to help drive both.
What is an example of the Network theory
Their partnerships with global universities and the introduction of entrepreneurship programmes. Again helping the company gather valuable knowledge of multiple different business environments and helped develop a sense of cultural competence, building trust in regions they are not physically present.
What were their networking platforms used
Attending conferences and tech events in the UAE, The UK and Germany helped strengthen relationships and insights on market knowledge
How to link all to network theory
By focusing on networking instead of capital intensive entry modes, Out2Bounds was able to expand in a cost effective way, all while maintaining a lean operational model, particularly valuable for a startup form a smaller economy such as Bulgaria
