SME Internationalization as a Puzzle of Cultural and Bilateral Distances: Using the Eisenhardt Approach

Abstract

Small and medium-sized enterprises (SMEs) have recently been discovered to function as catalysts for globalization. However, despite the increasing interest in the internationalization of SMEs, doing business in another country offers its own unique set of challenges that must be overcome if an SME’s international venture is to be successful. For sectors where operational efficiency is necessary and there are added pressures due to cultural differences in consumer behaviour (e.g., fast-food chains), managing the operations process is essential for ensuring success and growth. Furthermore, the export of the conventional business model becomes complicated because of the significant variations in brand localization requirements across nations, which force businesses to make significant changes to cater to local client preferences. Given this scenario, how can an SME identify and adjust the critical barriers towards deciding and acting on foreign market entry and exit?

To answer this question, we looked for a theoretical sample (case) of a business that successfully entered and operated in some markets and exited from others within the same period. In this investigation, we examine the Russian pizza company Dodo Pizza’s exodus from China and the UK as compared to their successful operations in Kazakhstan using Eisenhardt’s comparative case methodology. We use each country’s operations as a case in this research and apply Eisenhardt’s comparative case methodology to identify and theorize the factors of national context essential to the organization’s actions and outcomes in a given country.