University of Salford: Factors Impacting Business Internationalisation

This research proposal explores the factors impacting the internationalization of small-scale businesses, particularly those based in Australia. It investigates the challenges these businesses face when entering global markets, such as competition from larger enterprises, cultural differences, and financial constraints. The study aims to identify key factors influencing internationalization, including market research, customer understanding, capital requirements, and infrastructure. It reviews relevant literature on internationalization concepts, theories like the Uppsala model and mercantilism, and strategies like multi-domestic, global, and transnational approaches. The methodology will employ a positivism research philosophy, focusing on objective data collection and analysis to examine the feasibility of global expansion, identify essential factors, and recommend strategies to overcome challenges, ultimately benefiting Australian small businesses seeking to expand internationally.

RESEARCH PROPOSAL
Factors impacting small-scale business for
Internationalisation
And once you have defined the factors, then what? What will
the results of the applied research be used for/applied to?
Research Proposal
By
Abhaya Sharma
Student ID: 00447833
University Of Salford

1
RESEARCH PROPOSAL

2
RESEARCH PROPOSAL
Table of Contents
1. Proposed title...............................................................................................................................3
2. Rationale for the study.................................................................................................................3
3. The context of the study..............................................................................................................3
4. Research objectives.....................................................................................................................4
5. Research Question.......................................................................................................................4
6. Literature review..........................................................................................................................5
6.1 Concept of internationalisation..............................................................................................5
6.2 Reasons small businesses take internationalisation strategy.................................................5
6.3 Theoretical framework of internationalisation......................................................................6
6.4 Factors that can influence internationalisation......................................................................7
6.5 Strategies to take by small businesses for internationalisation..............................................8
7. Methodology................................................................................................................................9
7.1 Research philosophy..............................................................................................................9
7.2 Research approach.................................................................................................................9
7.3 Research design...................................................................................................................10
7.4 Data collection process........................................................................................................10
7.5 Sampling technique.............................................................................................................11
7.6 Data analysis........................................................................................................................11

3
RESEARCH PROPOSAL
7.7 Research Ethics....................................................................................................................12
8. Foreseen limitations...............................................................................................................12
9. Research Timeline.................................................................................................................12
10. Proposed structure of research.............................................................................................13
Bibliography..................................................................................................................................15

4
RESEARCH PROPOSAL
1. Proposed title
Factors impacting small-scale business for Internationalisation
2. Rationale for the study
In recent time, small business enterprises are facing the issue of going global as in
international market; they are facing stern competition against the large market giant. Before
entering the international market, the small business enterprises should do the market research
where they can understand the situation of entering the market. Understanding the international
customers is needed to tap into the expertise creating the blueprint of the products development
and marketing strategy (Vahlne and Johnson 2017). The factors like unfamiliar cultures in the
international market and the physical distance among the places are creating issues for the small
business enterprises. In addition, small businesses need to learn about the prospective customers
and the customer base of the organisation (Brandenburg and De Wit 2015). Small businesses of
Australia shares almost 44% of the employment and in the foreign market, it can help to enlarge
the business. The small business enterprises have been facing the issue of globalisation efforts of
report, communication and track to impact heavily on the foreign market. Small business is
facing the issue tariffs and export fees. The small businesses have small capital and financial
planning is necessary in order to go global. This study aims to find out the factors that influence
Australia based small businesses on internationalisation.
3. The context of the study
This research will recognise the ways through which the small business enterprises can
penetrate to the global market. In a previous time, it was easier to expand the business at the

5
RESEARCH PROPOSAL
global scale (Knight 2015). In recent time, the domestic market is becoming saturated and in
numbers of competitors is increasing by leaps and bound. Domestic market can boost the short-
term sales and many of the foreign companies are entering the domestic market making the
market red ocean for the small business enterprises. Therefore, the organisations can bring
innovative product concept in order to be global. With the advent of globalisation, it has become
very easy to reach the global market; however, organisations are facing the issue of entering the
global market considering some of the factors. Small businesses need to draw up the budget of
the internationalisation and they can make partnership in order to enter the international market
(Piekkari et al. 2014). This study will try to focus on the factors like capital requirement, product
specification market analysis and infrastructure to recognise the optimal situation for the small
business enterprises for making the global expansion.
4. Research aim and objectives
The aim of the research study is to explore the factors contributing in the
internationalization of the small scale businesses and to find out the most important factors
promoting the businesses to go global.
The objectives of the study are:
 To examine the feasibility of small-scale businesses in going global
 To recognise the factors essential for making the international expansion
 To find out the challenges facing by Australian small business enterprises in
internationalisation
 To recommend some possible strategies for going global

6
RESEARCH PROPOSAL
5. Research Question
1. What are challenges facing the Australian small business enterprises in
internationalisation and how can they be addressed?
2. What could be some possible recommended strategies for going global of small business
enterprises?
3. How can the potential outcome of the research benefit the small scale businesses in
Australia to go global?
6. Literature review
6.1 Concept of internationalisation
Internationalisation of the business is the process of enhancing the involvement of the
organisation in the international markets. The organisations must have an idea of international
culture while trading in the international market. The organisations mainly appreciate the values,
behaviour, beliefs and business strategies of various international markets in order to be able to
internationalise successfully (Islam 2017). In addition, small business and entrepreneurs also
have an ongoing concern for maintaining the quality of the products and services, innovation and
commitment for corporate social responsibility.
6.2 Reasons small businesses take internationalisation strategy
Small businesses want to have first-mover advantage and it is basically penetrating into
the market and gaining all the advantages of being the first to be there. The small businesses are
trying to be able to be the first in a new market as early adopters get a competitive advantage, as
there are limited competitions. Small businesses can gain the growth as the small businesses start
locally and they grow from the foundation. Internationalisation increases sales in consecutive

7
RESEARCH PROPOSAL
manners and it helps to increase the customer base (Menzies 2017). The small businesses can
have a small home market and by expanding the business internationally, it can have large
international market through expansion from the very beginning. Additionally, small home
market means the short supply of the customers and internationalisation provides large
profitability along with long-term security to the small businesses (Cavusgil and Knight 2015).
Expanding to the global market helps the small business to have greater economies of scale.
6.3 Theoretical framework of internationalisation
Mercantilist theory
Mercantilism theory as developed during the 16th century and it is one of the oldest
theories of internationalisation. As stated by Vaggi and Groenewege (2016), a country's wealth
can be determined by the amount of its gold and silver it is having. The school of Mercantilist
theorists believed that countries must increase its hold of gold by increasing its imports and
exports. The country needs to focus on trade surplus that is the value of the exports needs to be
greater than the value of imports. The country needs to avoid the trade deficit. Adam Smith
coined the word Mercantilism and he proposed that the economies always try to enrich the
wealth by restraining the imports and inspire the exports. Free trade can benefit both parties, both
exporters and importer. In a country like Germany, Singapore and Japan follow this theory and
small businesses are following neo-mercantilism theory. As opined by Burns (2016), in neo-
mercantilism theory, small businesses maximise the benefits to the interest of higher prices for
products traded abroad, the stability of supply and stability of price.

8
RESEARCH PROPOSAL
Uppsala model
The Uppsala model is a theory of internationalization, which describes the way the firms
over time intensify their activities in foreign market. In this model, the key focus is on the
process that the firms follow while expanding in the international market. This theory is based on
the learning of the firs and their evolutionary view points. It is derived from the behavioural
theory, described as the evolution of the nature of the firms according to the nature of the
customers and markets in the country of expansion (Forsgren 2015). The firms first gather
knowledge about the crucial factors in the target market before actually entering the market and
after entering, they gather further knowledge and evolve accordingly not only to capture the
market, but also to sustain in that market. According to Vahlne and Johanson (2013), this theory
states that once the internationalization process is started, it will proceed regardless of the
direction of the strategic decisions taken by the firms.
Monopolistic Advantage Theory
Stephen Hymer illustrates in this theory that the firms make use of their exclusive and
specific assets to earn higher returns, which the competitors cannot replicate (Pitelis and Teece
2018). He highlights that the direct foreign investors get some extra benefits as monopolistic or
proprietary advantage in the expanding market, which the local firms do not have. These could
be technological innovation, superior knowledge of technology, production technique, marketing
technique, finance or management or economies of scale (Knight and Liesch 2016). This makes
the foreign investor is a monopolist in the expanding market. The businesses that want to expand
in the international market must try to gain a monopolistic advantage in any such area, which

9
RESEARCH PROPOSAL
will be beneficial for them to enter the new market along with retaining the existing market. The
multinational firms mostly try to use this approach while expanding in the international market.
6.4 Factors that can influence internationalisation
Small business enterprises can face the issue of an external factor of global financial
crisis as internationalisation needs solid financial ability. The issue of the global financial
condition should be addressed within the context of the global scenario. According to Cavusgil
and Knight (2015), a global financial crisis can change the monetary system; therefore the direct
expansion of the brand cannot be possible. The global financial crisis began in 2008 and after the
crisis; small business enterprises got tons of opportunities. Moreover, the small business
organisations can face the factors of the infrastructure of the business in the domestic market as
well as the international market. The infrastructure of the business supports the government
support and industry condition of the country. Organisations can be pulled into becoming the
exporters as the other organisations in the same industry have established the relationship in the
foreign market. As opined by Burns (2016), many of the knowledge-based organisations reach
the competitive advantage due to the infrastructure factors as they have achieved the competitive
advantage by following mutually supportive interaction. The congenital factors of psychic
distance and entrepreneurial spirit of small business enterprises create an impression of the
internationalisation strategy. The small business enterprises are influenced by external and
internal situations and stimuli. The entrepreneurs may have a difference of knowledge and it is
the key to make a judgement and coordinate resources to make a strategic decision.
6.5 Strategies to take by small businesses for internationalisation
Multi-domestic strategy: The organisations need to sacrifice the efficiency for
emphasising the responsiveness to local needs within the markets. As opined by Alden and

10
RESEARCH PROPOSAL
Nariswari (2017), in multi-domestic strategy, organisations try to gain the local responsiveness
through customising both marketing strategy and the product offering to match the national
condition. For instance, Heinz takes local preferences in some of the international spheres.
Global strategy: The organisations can use global strategy when it sacrifices the local
needs within each of the markets to favour of emphasising efficiency. Global strategy gains
economies of scale by giving the same products and services to each market. Minor modification
is done in order take the global strategy. For instance, Microsoft takes the global strategy as it
offers similar products in each part of the world.
Transnational strategy: This is a middle ground between multi-domestic strategy and
the global strategy (Menzies 2017). The organisation does a balance between the local
preferences and desire of efficiency within the various countries. McDonald's does the
transnational strategy as it offers a different kind of food products to the same brand name.
7. Methodology
7.1 Research philosophy
Research philosophy is the belief through which the data about a subject is gathered, used
and analysed for the research purpose (Lewis 2015). There are mainly three types of research
philosophy; realism, interpretivism and positivism.
In this research, the researcher will select positivism research philosophy. Positivism
research philosophy takes the factual knowledge that is gained through the observation.
Positivism philosophy collects the data through the scientific process. The researcher will collect

11
RESEARCH PROPOSAL
the data based on internationalisation factors of small businesses and the collection and
interpretation of the data is the objective way. Positivism research philosophy depends on mainly
quantifiable observation and it leads to the statistical analysis. The researcher will concentrate on
facts of the small businesses’ internationalisation.
7.2 Research approach
The research approach is the procedure and it consists of the stages of broad assumption
about detailed data collection method, interpretation and analysis (Taylor et al. 2015). There are
mainly two types of approaches, inductive approach and deductive approach.
In this research, the researcher will select the deductive research approach, as there is
sufficient amount of existing literature present about internationalisation. Deductive research
approach does generalisation from the general to the specific. The logic is about deductive
inference and the researcher will deduce the concept from the existing theories. The deductive
approach will be helpful to collect the data and to evaluate proposals. The researcher will start
from the theories and they will find compelling the test and its implication with the data.
7.3 Research design
The research design is the systematic process of collecting the data (Mackey and Gass
2015). The research design is mainly three kinds, exploratory, explanatory and descriptive
research design.
The researcher will adopt the exploratory research design for this study. The factors,
promoting and discouraging internationalization of the small scale businesses will be explored in
this study and through the research, the researcher will put forward general insights about the
situation. The researcher will not be generating any new theory from the study, or offer any