Many new entrepreneurial ventures (NEVs) choose to enter the international market early in their life cycle. The NEVs usually focus on a very narrow niche. Is market orientation a success factor for NEVs in the international market? And if so, how does it differ depending on cultural context? A 2008 study by Brettel, Engelen, and Heinemann set out to answer these important questions.
NEV founders often lack the proper business background and therefore focus most of their attention on the product rather than on the market. NEVs, as they develop innovations, focus more on their product (inward focus) and not enough on the consumer and the market (outward focus). In order to expand their growth and overall performance, NEVs must shift some of their focus to the consumer and the market.
There is a positive performance impact caused by market orientation. NEVs tend to focus on an innovative product or technology, but shifting this focus towards adopting the product or technology to the relevant customer’s needs and differentiating the product from the competitors’ will support growth and enhance performances.
The cultural context was found to be extremely important. The products and/or technology developed by the NEV are usually designed to provide specialized solutions to a narrow market niche. But the local narrow niches are naturally limited, and in order to optimize their potential, NEVs must seek rapid internationalization. Strategies that were proven to be successful in their country of origin often prove to be less successful in other markets. Since the market orientation was found to be very important, NEVs must make certain changes to their product to make it better suited to the cultural characteristics of the international markets in which they compete.
In conclusion, this research showed that NEV owners often focus too much on the product and not enough on the consumers. The researchers concluded that NEVs entering the international market must recognize the importance of market orientation and the cultural context of the international markets in which they compete.
Source: Brettel, Malte, Andreas Engelen, and Andreas Heinemann. “Antecedents of Market Orientation: A Cross-Cultural Comparison.” Journal of International Marketing. 16.2 (2008): 84-119. Print.