Question

What are the main characteristics of born global firms? Evaluate the drivers of globalization that have allowed born global firms such as Instagram to internationalize at or near their founding. And, what advantages do you think a young company can gain by entering international markets soon after its founding?

Answer 1

Main Characteristics of born global firms are as follows:

1. These firms are driven by innovation and creativity, able to satisfy the demand of each market.
2. Strong emphasis on superior product & service quality with differentiation strategy
3. Knowledge driven organizational capabilities, backed by strong R&D function
4. Presence made across the industries to have the capabilities to cater
5. Global outlook of the management since day one
6. Ability to leverage the external distribution channels, logistics and other resources to cater the different markets.

The first driver of globalization is information & communication technology that has helped people interact, know and engage with each other. It has helped companies like Instagram to work since beginning to cater the global social media community. It helped Instagram interact with the users via mobile handsets and become popular in quick period of time. The second driver of globalization is the mutual interdependence, people using technology to interact each other and in different ways. Instagram provides all these benefits with its innovative business model and become a born global firm. The third driver is the workforce being global as people from one country, migrating to another country, is also spread the technology based products and services and demanding the same. It has created a market for companies like Instagram.

The following advantages can be gained:

1. It is still known and can surprise many established players with its innovation and capture the market.
2. A good and high value proposition among the consumers as a breath of fresh air on the basis of creative products that can serve their acute needs.
3. It will help in branding and company can create its own blue ocean and remain sole provider of the services for a long period of time.