Internationalization of Small, Computer Software Firms : Entry Forms and Market Selection

Internationalization is often described as a gradually developing process of involvement and form of entry in which firms gradually target more distant markets. This article examines the entry forms and market selection of five small Norwegian computer software firms. Data were based on interviews and site visits. A firm's network relationships were found to determine which forms of foreign entry they choose and, to some extent, which markets they enter. Software presents a more complex pattern than for physical products when considering agents, distributors, and licensing. Firms in this study referred to their partners as agents, distributors, or both. These firms were less concerned with the category of partner, than for competency, solidity, and ability to generate sales. It was also found that the relationship between firms' international experience and market selection is limited. Firms may adopt one form of entry in one market, and a different one in another market that is very similar. It is suggested that software company managers must balance resource allocation between expanding their network and focusing on establishing new relationships and customers. Overall, the study shows the complex international network relationships among firms. (TNM)