SME internationalization A critical analysis of van Cronenburg’s entry mode choice on the US market on the basis of its competitive advantages

Details

Supervisors

Coeurderoy, Régis ; Lejeune, Christophe

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion

Abstract

In 2014, van Cronenburg, a high potential niche player in the architectural hardware industry, faced a challenge familiar to many entrepreneurs: choosing the right entry mode for their international expansion. Providing a deep-dive into SME internationalization, this thesis aims to understand which factors influence the entry mode choice for an SME on the basis of van Cronenburg’s entry in the US market as a case study. To this end, a literature review assesses elements like key characteristics of SMEs, drivers to internationalization, barriers to entry, possible entry modes and finally, different models and theories developed over the past decades. The resource-based view (RBV) emerges as one of the most well-developed models, although there is still room for empirical scholarly research. The practical part of this thesis aims to fill this gap by providing a detailed and empirical case study of van Cronenburg’s entry mode choice. Therefore, the question guiding this research is the following: What were the reasons for van Cronenburg’s entry mode choice on the US market, and how did its competitive advantages influence this decision? From this research, several insights emerge. • Van Cronenburg opened a subsidiary for sales and service delivery (keeping the production in Belgium), because of the need for proximity to the client. Their customer-centric approach and wish to provide the best service for a complex product, requires the possibility to go on-site and meet clients face-to-face. • The competitive advantages arise as having played a crucial role in the entry mode choice. • The results of the RBV analysis coincide with van Cronenburg’s decision to establish a subsidiary. A recommendation for the company even emerges from the RBV, divulging the potential of a future manufacturing facility in the USA. However, while the RBV explains the factors behind this entry mode decisions, it fails to elaborate on how the decision is made on the field, where following the right entry mode can be hindered by a lack of resources or opportunities. Van Cronenburg’s analysis reveals that some vital enabling factors and actors for this decision are not sufficiently or explicitly reflected in the RBV. In conclusion, while additional research should be done on applying the existing models on SMEs in particular, the RBV appears to be an accurate tool for predicting the entry mode selection.