Gabrielsson_2004_International-Business-Review

Globalizing internationals: business portfolio

and marketing strategies in the ICT field

P. Gabrielsson, M. Gabrielsson*

International Business, Helsinki School of Economics, P.O. Box 1210 (Lapuanankatu b),

FIN-00101 Helsinki, Finland

Abstract

The Information and Communication Technology (ICT) companies originating from small and

open economies (SMOPEC), such as Finland, face the tremendous challenge of moving from the

international to the global arena and developing global marketing strategies. Earlier studies have

merely recognized the phenomena and postulated preliminary assumptions about the behavior of

globalizing internationals. In the ICT field, all the major globalization drivers—be they changes in the

macro environment, industry globalization, or pressure for increased internal efficiency—point in only

one direction: globalize or die. Limited managerial and financial resources are often the challenge for

companies originating from small and open economies. The study received preliminary empirical

support from the ICT field that globalizing internationals select only one or at most a few of a large

number of unrelated international businesses for globalization. As globalization matures, they further

seek growth through related diversification. Implementation at the business unit level seems to require

a change in marketing strategies; both the broadness of the marketing offering and the degree of

standardization were found to evolve as globalization proceeds. At the beginning of the globalization

process, a more focused marketing strategy was selected, which was then broadened as globalization

proceeded. Moreover, the marketing strategy was increasingly standardized in respect to products, but

also to a certain extent for brands and channels. The article develops a framework and propositions that

are examined with the multiple case-study method. It also suggests further empirical testing with a

survey study. Finally, it draws both theoretical and managerial conclusions that are expected to be

particularly useful for ICT companies from SMOPEC countries, but interestingly also for the US

companies that are competing fiercely against globalizing internationals.

q 2004 Elsevier Ltd. All rights reserved.

Keywords: Globalizing internationals; Business portfolio; Marketing strategies

International Business Review 13 (2004) 661–684

www.elsevier.com/locate/ibusrev

0969-5931/$ - see front matter q 2004 Elsevier Ltd. All rights reserved.

doi:10.1016/j.ibusrev.2004.10.001

* Corresponding author. Tel.: C358 9 431 38 670; fax: C358 9 431 38 880.

E-mail address: [email protected] (M. Gabrielsson).

http://www.elsevier.com/locate/ibusrev

P. Gabrielsson, M. Gabrielsson / International Business Review 13 (2004) 661–684662

1. Introduction

In the information and communication technology (ICT) industry, the pressure to

globalize existing international business is great. The information and communication

technology cluster consists of a large number of different companies, ranging

from manufacturers to service providers. The focus in this research is on the ICT

equipment manufacturers, including network infrastructure, mobile phones, and

component manufacturers. In these sectors, all the major globalization drivers—be they

changes in the macro environment, industry globalization or pressure for increased

internal efficiency—point in only one direction: globalize or die. Both huge benefits and

risks are involved (Yip, 1989).

As ‘globalizing international’ is a relatively new concept describing a particular

globalization approach, we will first define it. A globalizing international is a company

that has first internationalized its businesses within home continent after the domestic

period and only then started to globalize outside its home continent (Luostarinen &

Gabrielsson, 2002, pp. 5–6). Although, globalizing internationals account for only a rather

small proportion of the ICT companies, their importance for the SMOPEC from which

they often originate is huge. The term SMOPEC (small and open economy) refers to

countries like Finland or Sweden, Denmark, Norway, and Austria. Take for instance the

Finnish company Nokia, which in 10 years has developed from a European challenger into

a globally leading telecommunications terminal and infrastructure manufacturer with net

sales of over 31 billion euros in 2001, out of which over half is derived outside its home

continent of Europe from over 130 countries. The impact of Nokia on the Finnish economy

is huge, as it represents one-fifth of the Finnish economy’s total exports (Ali-Yrkko, Paija,

Reilly, & Yla-Anttila, 2000, p. 10). Or then the telecommunications infrastructure

manufacturer Ericsson, which is very important for the Swedish economy. Both of these

companies first developed several international businesses and then focused on

telecommunications in the 1990s. For academicians, practitioners and government

policy-makers it would be valuable to better understand the factors behind their

transformation from international to global status and whether another company from the

same or another country could possibly replicate their achievement. This understanding is

also expected to be useful for companies from larger countries, such as the USA, when

planning their strategies against globalizing internationals.

The internationalization process of companies has been widely studied (Johanson &

Vahlne, 1977; Luostarinen, 1979). The prevailing knowledge of internationalization as a

process focuses on firms in the early phases of internationalization (Melin, 1992, p. 104).

Research has also focused on both multinationals and existing global companies.

Recently, the globalization process of small and medium-sized companies in particular has

become of interest to researchers. Oviatt and McDougall (1994) have suggested that some

companies may be international from inception, without proceeding through the

conventional phases. These companies, which are often referred to as ‘born globals’

deviate from the ‘globalizing internationals’ examined here, which have first

internationalized their business and only then entered the globalization stage (Luostarinen

& Gabrielsson, 2002, pp. 5–6). Surprisingly, little research has been done on the

globalizing internationals, except for a few studies (see Gabrielsson & Gabrielsson,

P. Gabrielsson, M. Gabrielsson / International Business Review 13 (2004) 661–684 663

2003a). Globalizing internationals need a well planned global strategy to be able to

leverage their potential fully. The managerial challenges to these companies are huge.

Although they may have adequate resources, they are often distributed between many

international business portfolios. The challenge lies in divesting many of the current

businesses, selecting the right businesses to be globalized, and then developing the

marketing programme to meet the new global customer requirements.

In the above discussion, one area where little research has been conducted was

identified. It can be stated in the form of the research problem as follows: How can

international ICT companies from small and open economies meet the huge globalization

challenge of moving from the international to the global arena and developing global

marketing strategies? After the research problem has been defined, the research questions

may be formulated as a partial solution to the research problem as follows: (1) How is the

business portfolio developing during globalization? (2) How do the marketing strategies

change while international ICT companies globalize?

The main objective of this research is to examine the development of corporate and

business level strategies during the transformation of the ICT companies from

international to global. The article focuses on the business portfolio selection, the level

of broadness of the marketing strategies (products, brands, channels), and their degree of

standardization for globalizing internationals in the ICT equipment-manufacturing field.

Pricing is not examined in this study, although it is an equally important marketing

parameter, because it was difficult to obtain the necessary empirical data. The paper first

develops a theoretical framework and propositions based on an analysis of existing

literature. Then it progresses to an empirical examination of Finnish ICT companies and

uses multiple case study methods to analyze them. Theoretical contributions, managerial

implications and future research suggestions will also be drawn.

2. Theoretical review section

2.1. International business development towards global

Many ICT companies originating from Finland and other SMOPEC countries have

internationalized their activities at an early stage and are now in the process of globalizing

or have recently globalized their company. During internationalization, these companies

often developed a diversified business portfolio. At that stage, the major concern was

related to the structure of their business portfolio. When globalization started at the end of

the 1980s and in the 1990s, these companies often selected one or a few strategic

businesses to be globalized (see Luostarinen, 2001, p. 33). Next, the theoretical literature

related to this development from international to global is reviewed.

The development of the internationalization process has been thoroughly examined by

Johanson and Vahlne (1977) and Luostarinen (1979) who depict it as a stepwise process

where companies proceed towards higher foreign market involvement. These models

describe the internationalization process as a gradual development taking place in specific

stages over a relatively long time. Moreover, they are similar in that they are based on the

theory of the growth of the firm (Penrose, 1959) and the behavioral theory of the firm


(Aharoni, 1966; Cyert & March, 1963). In addition, several researchers have focused on

the early stages of internationalization or specific industries (Bilkey & Tesar, 1977;

Cavusgil, 1984; Hansen, 1981; Johanson & Wiedersheim-Paul, 1975). However, due to

the focus on globalizing internationals these early models will not be discussed further in

this work.

There has also been presented criticism of the stepwise orderly development of

internationalization (Andersen, 1993; Leonidou & Katsikeas, 1996; Turnbull, 1987). In

this context it is important to distinguish between target country level and company level

internationalization pattern. The company level can be seen as a sum of the target country

patterns. The evidence from the SMOPEC countries demonstrates that at the company

level the mainstream pattern of internationalization can be found (see e.g. Luostarinen,

1979). However, it can be questioned whether the target country pattern is similar in each

country as companies do learn from operations in other countries (see e.g. Andersen, 1993,

pp. 220–223).

The globalization process, however, has been studied less. A pioneer in reviewing the

development of different kind of MNCs was Perlmutter (1969), who argued that the

management attitudes or orientation toward foreign country operations are crucial. Bartlett

and Ghoshal (1987) have found that multinational companies face a need for new

multidimensional strategic capabilities and suggested that many companies in the ICT

field seek simultaneous global efficiency, national responsiveness, and worldwide

learning. Yip (1989, pp. 29–30) has argued that globalization proceeds in three stages,

which are development of the core strategy, internationalization of the strategy, and

globalization of the strategy. Also, Craig and Douglas (1996) have found that global

market expansion develops in three phases in addition to the domestic phase; these are

initial market entry, local market expansion, and global rationalization. When examining

the development of globalizing internationals this latter model becomes particularly

suitable. However, in order to avoid negative associations with the word ‘global

rationalization’, we prefer to use the word ‘global alignment’.

The process starts with the international market entry phase (1), in which the

company’s strategic thrust is to expand geographically to the international markets to

achieve scale advantages. In the following phase (2), which is called the international

market penetration stage, the company starts to look for new growth potential and

expansion in countries where a base has already been established. The idea is to build on

existing structure and assets established in each market to achieve scope advantages by

spreading administrative overheads (Douglas & Craig, 1989, pp. 51–55). Product lines and

variants may be developed to meet local market requirements and marketing strategies

may be adapted to the local environment. This also enables penetration into new customer

segments that were not reached earlier.

The global alignment phase (3) is characterized by the adoption of a global orientation

in strategy development and implementation. Global expansion and worldwide integration

become a key principle in strategy formulation. Attention focuses on global efficiency

without losing local responsiveness. The strategic thrust of the company is to find

synergies from operating on a global scale and to take maximum advantage of the

multinational nature of its operations. Global alignment includes improving efficiency in

its worldwide operations and also developing a global strategy that identifies the market


segments and customers to be targeted in world markets. Opportunities in identifying

segments that are regional or even global become interesting (Douglas & Craig, 1989,

pp. 55–57). The global strategy offers an opportunity to serve better these selected

customers and to further utilize scope advantages in extending the product offering into

higher value-added activities and to leverage both global brands and channels more

effectively (Yip, 1989, pp. 32–34).

The conversion of a business from international to global takes place in several stages

and a distinctive strategy is applied in each stage. It is important to understand the relation

between geographical market expansion towards global (see Ayal & Zif, 1979;

Luostarinen, 2001) and the above-described phases of global market development

strategies (Douglas & Craig, 1989). The measures based on geographical market

expansion have been found particularly useful in studies conducted in Finland and other

SMOPEC countries. Hereby, globalizing internationals, often established before 1985, can

be considered global when over 50% of their sales are derived outside their home

continent from many foreign countries (Luostarinen & Gabrielsson, 2002, pp. 5–6). These

measures can always be criticized for being too simplistic. However, this is also their

strength when we used them merely for selection of the case companies and not for

purposes of case comparison or performance measurement. See Fig. 1.

2.2. Development of the marketing offering scope

The globalizing internationals need to consider the implications of globalization for the

scope of their specific marketing mix strategies, for instance their product, channel and

branding strategies. It seems obvious that these strategies are under pressure to change for

at least two reasons. First, as the ICT companies in their international phase have entered

and penetrated their target markets, both geographically and with respect to customer

segments (Ayal & Zif, 1979), in the global phase they need to turn their attention to

achievement of global integration benefits across countries (Yip, 1989). Second, as their

Fig. 1. Stages in the globalization of ICT companies. Source: Gabrielsson, 2004, p. 21.


product portfolio is under considerable pressure to change from many international

businesses toward those selected for globalization, the product development and

marketing resources need to be reallocated. We will therefore turn later in this article to

an examination of the proposed change in the narrowness or broadness of the marketing

scope (Porter, 1985, pp. 53–55), with particular focus on the number of products and

brands offered and channels used.

The research related to use of narrow versus broad scope in marketing strategies has

been relatively limited (see e.g. Porter, 1985, pp. 53–55). It has mainly centered on the

concept of using simultaneously different product strategies (Gabrielsson, 2004, p. 49),

branding strategies (Chen & Paliwoda, 2002) or channel strategies (Gabrielsson,

Kirpalani, & Luostarinen, 2002). This has brought important results indicating that the

multiple use of strategies usually increases during internationalization. In these earlier

studies, standardized and adapted products have been found to co-exist, corporate and

product brands have been combined to reinforce each other, and direct and indirect

channels have been used in parallel. Moreover, it is important to understand the broadness

of product assortment, brand architecture, and channel coverage.

2.3. Standardization versus adaptation debate

The debate concerning whether to standardize or to adapt the product and marketing

mix elements has gone on for a long time and does not seem to be close to any conclusive

theory or practice. The earlier work goes back to the 1960s when Buzzell (1968) studied

the standardization of international marketing strategies and the obstacles associated with

them and Keegan (1969) the product and communication strategy. Most of the articles that

have appeared since 1960 have been of a purely theoretical nature and empirical evidence

is rare except for a few works, mainly on MNCs operating in developing countries (see,

e.g. Boddewyn, Soehl, & Picard, 1986; Chang, 1995; Hill & Still, 1984; Ozsomer, Bodur,

& Cavusgil, 1991) and studies focusing on consumer preferences and segmentation (see,

e.g. Keillor, Hausknecht, & Parker, 2001; Verhage, Dahringer, & Cundiff, 1989).

Also, the issue of whether standardization is feasible still seems to be unresolved. The

most far-reaching interpretations have been presented by Levitt (1983), who has argued

that emerging global markets provide opportunities to market standardized products

across the globe, ignoring regional or national differences. Although increased use of

especially product standardization has been supported in the literature (Boddewyn et al.,

1986; Ozsomer et al., 1991; Sorenson & Wiechmann, 1975; Walters, 1986; Whitelock &

Pimblett, 1997), the empirical evidence is scarce except for a few studies mainly on MNCs

(Sorenson & Wiechmann, 1975). The proponents of the adapted approach to global

marketing contend that as customer and institutional characteristics differ significantly by

area, some geographic adjustment is needed for successful competition (Simmonds,

1985). An important distinction should be made between standardization of marketing

programs, emphasized by earlier literature, and standardization of managerial processes,

put forward by some more recent studies. The focus in process standardization is on the

marketing philosophy, principles, and technology applied in the planning and preparing

of marketing programs. The conclusion in many of the studies is that it is far

easier to standardize the marketing planning process than the content of the program


(Walters, 1986). Recent studies on large companies have indicated that standardization of

marketing strategies may have performance implications (Zou & Cavusgil, 2002), which

therefore increase the importance of this dimension.

3. Theoretical framework and propositions explaining business portfolioand marketing strategies

We now turn our attention to examine what factors affect global product and marketing

strategies when an ICT Company globalizes its activities. This is triggered by a number of

drivers that cause the company to change its strategies on corporate, business and

functional levels. In Fig. 2, we present a framework explaining the development of

business portfolios and marketing strategies.

3.1. Macro environment and ICT industry-related globalization drivers

A number of macro and industry environment-related factors are driving the ICT

companies to globalize. The small size, openness and peripheric location of the domestic

market is expected to push Finnish and other companies originating in SMOPEC to

globalize their business. On the other hand, the large size and openness of the global target

markets appear to pull companies to globalize their activities (Luostarinen, Korhonen,

Pelkonen, & Jokinen, 1994, p. 14). The large global target markets are especially

important for the ICT companies. Due to the often-high R&D costs, it is of the utmost

importance to spread these over a large number of markets, as the home continent is

increasingly too small and companies need to market the products globally on all

continents (see also Govindarajan & Gupta, 2000, pp. 277–279). The ongoing global trade

liberation and regional integration into different trading blocks around the world

is expected to further decrease trade and investment-related restrictions (Doz, 1991,

pp. 18–23; Yip, 1989, p. 38). Moreover, technological advances are expected to drive

globalization (Levitt, 1983, p. 92).

Fig. 2. Conceptual framework. Source: Adapted from Gabrielsson, 2004, p. 124.


In the high technology industry in general and in the ICT companies in particular, it

may be assumed that the globalization drivers are especially strong for a number of

reasons. Firstly, the market need is becoming more similar across countries, and global or

at least regional customers and channels are often present (see also Alahuhta, 1990,

pp. 9–19). Secondly, in high technology and in the ICT field in particular, competition is

very intense and companies often operate on a worldwide scale. Thirdly, the increasing

technical standardization in the industry speeds up the globalization process in the

telecommunications industry (Haikio, 2001, pp. 72–73). Moreover, the latest development

in the ICT industry has meant that global competition has increased both vertically and

horizontally. This has increased the importance of co-operation in the horizontal direction

(see Gabrielsson & Gabrielsson, 2003b, p. 131).

The Finnish globalizing internationals have often first internationalized within the

European market. It was only in the late 1980s and particularly in the 1990s, that the macro

and ICT industry started to change and the globalization drivers forced them to focus their

business portfolio and make their marketing strategies increasingly global.

3.2. The global strategic levers and resources

Strategic levers can be identified as the source of competitive advantage in the global

market. Douglas and Craig (1989) introduce economies of scale, economies of scope and

synergies as important levers.

In the international entry stage, economy of scale is an important source of competitive

advantage. A company often leverages its domestic production base and in this way

reduces average unit costs thanks to increasing production volumes. When the company is

in the international penetration stage, it expands within the selected geographic markets

through an adaptive product and marketing strategy and by introducing new product lines.

The emphasis shifts at this stage to achieving economies of scope by leveraging the

established contacts and knowledge of local markets. New products can often be

introduced via the same sales channels, thereby bringing huge cost benefits (Douglas &

Craig, 1989, pp. 51–55).

In the global alignment phase, the company starts to co-ordinate and rationalize its

operations on a global basis to achieve benefits from synergies. Skills or assets that are

transferable, such as management competence, brands, and product knowledge, may be

leveraged globally (Douglas & Craig, 1989, pp. 55–57). Global and regional level of co-

ordination of product- and marketing-related requirements becomes important. These

competencies and processes may bring a more sustainable competitive advantage

than market-related advantages like economies of scale and/or scope. Recent

findings, however, indicate that process and competence-related advantages are also

vulnerable and may result in obsolete knowledge due to change in the underlining factors

(Christensen, 2001).

Improved co-ordination and a more integrated product and marketing strategy will

often lead to economies of scale. Centralized product development, production, and

marketing will eliminate duplication and increase efficiency. In ICT companies,

investment on R&D and product development is often high and it is therefore extremely

important to spread the development cost over the maximum volume of sales from global


markets. From the product point of view, this often means decreasing the number of

product lines and country variants. Hence, limited resources can be put into developing

key products. Global brand dominance has been seen as especially important in fighting

global competition. Also, it has often been found that the cost advantages are less durable

compared to the brand and distribution advantages (Hamel & Prahalad, 1985).

The resources and capabilities are also expected to affect global marketing strategies

(see, e.g. Wernerfelt, 1984). For example, it may be assumed that companies with

resources related to global product development skills, modular product platform

understanding, mass manufacturing capabilities, and global co-ordination capabilities of

different national product requirements will select a highly standardized product strategy

when justified by the external environment.

3.3. Corporate and business level strategies

An international ICT company needs to answer the following questions on corporate

level in the context of determining its globalization strategy: What businesses to select for

global market expansion? How diversified/related should the business portfolio be during

globalization?

Earlier research has developed the dimensions of corporate strategy (Ansoff, 1987, pp

109–110) and strategic alternatives for global companies (Luostarinen, 2001, p. 33). Based

on this research, the following business portfolio strategies for globalizing internationals

may be proposed: (1) Global Focus Strategy; global geographical expansion in a single or

dominant business area with current product technology and market segment, (2) Global-

Related Diversification Strategy; (2a) Global geographical expansion in a related market

segment but with a new product technology and (2b) Global geographical expansion in a

related product technology area but offering this to new market segment(s), (3) Global

Unrelated Diversification Strategy; Global geographical expansion to unrelated market

segments and utilizing unrelated product technology.

Geographical market expansion outside the home continent changes the way ICT

companies plan their marketing strategies at the business unit level. In addition to home

continent, they must also take into consideration the requirements of the global markets.

Most of the sales come from outside the home continent at the global stage, and therefore

cannot be ignored. Another important aspect to consider is the phase of global market

development. The strategic thrust in the international market entry and penetration stages

is to adapt the offering to the local country demands, while the focus shifts in the global

alignment phase to seeking global integration benefits, while satisfying minimum local

market requirements.

3.4. Propositions development

Having first examined the macro environment and ICT industry globalization drivers,

the strategic levers and resources, and the corporate and business level strategies of the

ICT companies originating from SMOPEC countries, it is time to examine the evolution of

the business portfolios and marketing strategies closer and postulate propositions

regarding development during globalization.


In the framework, three strategies for globalizing internationals on the corporate level

were developed: the global focus strategy, the global-related diversification strategy,

and the global-unrelated diversification strategy (see Ansoff, 1987, pp. 109–110;

Luostarinen, 2001, pp. 33). The business portfolio is expected to develop during

globalization in the ICT companies. It may be assumed that a global-unrelated

diversification strategy (alternative 3) as a growth strategy is difficult for ICT companies

from SMOPECs to pursue, as resources, be they financial or managerial, are often limited.

Also, the global-related diversification strategy (alternative 2) demands considerable

financial and managerial resources, yet less than alternative 3. Moreover, a recent study of

20 large Swedish multinational companies found a strong pattern of product focusing in

the process of diversifying into a large number of markets (Bengtsson, 2000). Hence, it

may be assumed that ICT companies will select a global focus strategy (alternative 1) as

the primary corporate level globalization strategy. The product businesses requiring low

adaptation and having high-expected benefits from globalization are the most attractive

product businesses to be initially globalized (Gupta & Govindarajan, 2000, pp. 46–47).

However, as growth slows down in the ICT industry, global-related diversification is most

likely to be used increasingly to sustain growth. The following proposition may be

postulated (see also Luostarinen, 2001, p. 33).

Proposition 1. Globalizing internationals select one or a few from a large number of

unrelated international businesses for globalization. As the globalization matures, they

often seek further growth through related diversification.

The scope of the marketing offering is expected to develop during globalization in the

strategic business units selected for globalization. Next, development of the scope will be

examined for product, brand, and channel strategies. The marketing literature provides us

with a good framework for closer examination of the scope of the product strategy. Kotler

(1984, p. 471) has introduced two concepts that are of importance for this study when

describing the broadness of product strategies: (A) the width of product assortment (or

number of product lines) and (B) the length of product lines (or number of product items in

a line). The international ICT companies can be expected to first broaden the total number

of their products as they penetrate the markets in the international stage and then focus on

selected products as they enter the global alignment stage (Douglas & Craig, 1989,

pp. 54–57). However, as globalization matures, it is expected that a broader related

product assortment will be developed (Gabrielsson, 2004, p. 312).

Turning to the scope of branding, Aaker and Joachimsthaler (2001) have suggested that

there are basically two alternatives for global branding: a house of brands or then a

branded house. In a house of brands an independent set of product brands are used, each

maximizing the impact on the market. In contrast, in a branded house alternative, a single

master brand is used to span a set of offerings. In addition, descriptive sub-brands may be

used to offer some flexibility to market requirements. International ICT companies may be

expected to increase the number of brands during the entry and penetration stage and then

coordinate the branding strategy when entering the globalization stage more tightly

(Douglas & Craig, 1989). In the mature phase of globalization they can again be expected

to start broadening their branding scope, as resource constraints are withdrawn. Further,


they are expected to continue strengthening their brand recognition and to introduce sub-

brands under their master brands if product–market diversity so requires.

The scope of the channel strategies may be mapped by the broadness of different channel

strategies, e.g. direct and indirect, and sub-alternatives: direct personal selling, direct

e-commerce, indirect distributors, resellers and retailers. However, the intensity/ selectivity

(or channel depth) of the number of outlets per each channel type should be also considered

(Mallen, 1977, pp. 71–87). In dynamic markets, such as ICT, usage of multiple channel

alternatives may be called for (Anderson, Day, & Rangan, 1997, pp. 63–67). It can be

expected that international ICT companies when entering and in particular penetrating

target countries’ customer segments increase their channel coverage by both broadening

their channel strategies to include multiple ones, for instance, indirect and direct channel

strategies, and also by intensifying their channel coverage by increasing the different sub-

types and number of channel outlets used (see also Gabrielsson et al., 2002, pp. 76–78).

While, in the early part of the global alignment stage due to resource constraints, they need

to focus on selected channel types that provide fast geographic expansion. Hence, it is easier

for the manufacturer to have completely satisfactory relationships with a few middlemen

than with many in a given area (Mallen, 1977, p. 83). It is expected that during the maturing

of the global phase a broader channel coverage is called for in order to sustain growth. At an

earlier stage, this increase in channel intensity could harm channel goodwill, but when the

manufacturer gains global power and brand recognition along with general growth of the

market size, this becomes a minor concern (see e.g. Gabrielsson et al., 2002, pp. 81, 88).

The examination of the scope of the marketing strategy may be summarized as follows.

In the international phase, the ICT companies often develop a diversified marketing

offering. When starting globalization, the companies are expected to select a

focused/narrow product assortment, and then later develop a broader product assortment,

broader channel coverage and broader brand architecture as globalization matures. The

following proposition may be stipulated.

Proposition 2. Globalizing internationals will develop from a diversified marketing

offering in the international stage to a focused marketing offering when starting

globalization and then develop a broader marketing offering (product assortment, brand

architecture and channel coverage) towards the global stage.

We now turn to an examination of the influence of the globalization of ICT companies

on marketing strategy standardization. In the international penetration stage, the

globalizing internationals penetrate deeper into the existing international market base

by utilizing adaptive product and marketing programs and developing country-specific

product lines and variants. Hence, they achieve considerable economies of scope by

leveraging existing customer and country-related capabilities. Also, the process

standardization is relatively low, as specialized processes are needed to meet the

country-specific product and customer requirements. On the other hand, in the global

alignment stage the marketing programs are coordinated on a global or regional scale and

global segments are addressed with standardized products, brands and channels.

Furthermore, the product management processes, brand, and channel management

processes are standardized and yield considerable global benefits (Gabrielsson &


Gabrielsson, 2003a). This is expected to be the case with many companies in the ICT-field

originating from a SMOPEC.

The globalizing internationals may standardize the product to some extent at all of the

product levels: core benefit of the product or service, tangible product and augmented

product (Kotler, 1984, pp. 462–464). In the ICT area, the core product benefit includes

issues like performance, technology, and the main functional features. These kinds of

benefits are standardized in a high technology area by developing a common product

platform that is then adapted to market requirements through modularity and interchange-

ability of certain parts. The importance of understanding the product platform level

strategies in the high technology area has been emphasized by many authors (McGrath,

1995, p. 39; Sawhney, 1998). The tangible product is what the customer sees and

experiences, including hardware, software, features, design, packaging, and brand label.

The tangible product is often increasingly standardized in many ICT companies. This is

common in for example electronic component manufacturers. Moreover, the augmented

product includes warranty, delivery, installation and other services that may also offer

opportunities for standardization. It is rare that all these levels are standardized, but due to

the free movement of goods and travel, there is, for example, considerable pressure to

standardize warranty terms. Also, the product management processes may be standardized

(Gabrielsson & Gabrielsson, 2003a, p. 114). We may identify a number of different product

management processes that may benefit from standardization in globalizing internationals,

including for instance, customer input for new product requirements, the interlinked R&D

centers and their product development process, the product launch process and product

positioning processes (see e.g. Yip, 1992, pp. 85–88, 122–125).

Branding strategy is a key element for globalizing internationals and an essential part of

communication. Keegan (1969) suggests that standardization of the communication

decision is related to the similarity of the need satisfied. We may identify the following

approaches for the globalizing international. First, when the product need is similar in both

the domestic and international markets, standardization of the content of the

communication is a feasible alternative. Second, if the product function or need satisfied

differs, adaptations to the communication will be required. Thirdly, if the conditions of

product use also differ, then the product itself may have to be adapted. In the international

penetration stage, the company adapts communication and the brand to the market to

expand effectively to local markets (Douglas & Craig, 1989, pp. 51–55). As the ICT

Company starts to globalize its operations, it may often find that it has to rationalize its

brand portfolio consisting of multi-domestic brands and develop or expand the selected

strong international brands into global ones (Gabrielsson & Gabrielsson, 2003a,

pp. 111–112). Also, the standardization of the brand management processes across

countries, regions, or the whole globe should be considered. This would allow for the

globalizing company to benefit from brand management systems or brand leadership

(Aaker & Joachimsthaler, 1999) when the local circumstances require adaptation to

respond to individual needs.

The channel strategy is important for globalizing companies. It has also been regarded as

one of the most difficult marketing mix elements to standardize. Earlier research has found

the division into channel design (content) and management (process) useful in dealing with

this aspect (Rosenbloom, Larsen, & Mehta, 1997, p. 53–56). The following conditions offer


opportunities for standardization. First, when the distribution functions performed are

similar across countries the channel design can be standardized. Second, when the business

culture is similar, standardization of channel management processes is feasible. The

management processes offer more opportunities for standardization than channel design

alone (Rosenbloom et al., 1997, pp. 53–54). To conclude, the globalizing internationals may

harmonize the channel programs across markets and respond to the increase in global

distributors and resellers. This usually includes channel member selection procedure, terms

and conditions and global management of large chains or customers. On the basis of the

above examination, the following proposition may be developed.

Proposition 3. Globalizing internationals evolve within the strategic business unit from

utilizing adaptive marketing (product, brand, channel) strategies in the international stage

towards highly standardized strategies as they globalize.

We will next turn to the empirical analysis and examination of the above three

propositions with respect to selected Finnish ICT companies that fulfilled the criteria set,

that is first developing into an international company before eventually globalizing their

activities.

4. Empirical research, data gathering and analysis

4.1. Research methodology

To examine the above-developed propositions, case research methodology was

selected. The overall research process utilizes many of the techniques of multiple case

study design, data collection and analysis proposed by Yin (1994). However, it also uses

principles presented by Eisenhardt (1989) regarding the process of building theories from

case study research, the techniques used in processual analysis (Pettigrew, 1997), and

snow ball sampling (Patton, 2002, p. 237).

The following four Finnish ICT equipment companies were selected for this study:

Nokia Mobile Phones (NMP), Nokia Networks (NET), Salcomp and Tecnomen.

Altogether 14 interviewees participated in the study, so that 3–4 executives were

interviewed from each case company, most of them several times during the years 2002–

2003. Typically, the interviewees were CEOs, managing directors or senior vice presidents

of marketing, and the interviews lasted from two to four hours. One of the case companies

(NMP) globalized starting from the mid 1980s, before the others. In contrast, the other

three cases (NET, Tecnomen, Salcomp) globalized during the 1990s and at the beginning

of the current century. In Table 1, the selected case companies are presented together with

some key criteria for the selection.

4.2. Case description and analysis

4.2.1. Corporate strategies of globalizing internationals

The corporate strategies and their development during globalization will next be

examined. NMP and NET case companies both belong to Nokia Group, the business

Table 1

Case companies and selection criteria

Company/

strategic

business unit

Field Established Globalization

degree% in

2001a

Nokia Mobile

Phones

End user terminals

manufacturer

Nokia established in 1885. Terminal

production started in 1963

52b

Nokia

Networks

Telecommunication

infrastructure

manufacturer

Nokia established in 1885. First telecom

equipment deals in 1965

49c

Salcomp Mobile charger

manufacturer

Salcomp established in 1973. Manufacturing

of power supplies started in 1982

68

Tecnomen Telecommunication

systems manufacturer

Kyro established 130 years ago. Tecnomen

established in 1978 and became part of Kyro in

the mid 1980s. In 2001 Tecnomen demerged

52

Source. Annual reports and information provided by case companies.a The globalization degree is the share of sales outside home continent.b The actual globalization degree is bigger for NMP because European sales also include sales in Africa and the

Middle East in Nokia’s annual reporting.c The actual globalization degree is bigger because European sales also include sales in Africa and Middle East

in Nokia’s annual reporting.


portfolio selections of which are next examined. Nokia Group had 12 unrelated businesses

in 1989 including consumer electronics, cables, machinery, electrical wholesale, rubber,

chemicals, paper, power, floorings, information systems, mobile phones, and telecommu-

nications. The strategy had been to grow aggressively in European markets through

business diversification, which was believed to offer protection against economic

fluctuations. By the end of the 1980s, the company was struggling to maintain growth in

these areas and was highly resource-constrained. It decided to focus on the

telecommunication area as this was seen as an attractive segment due to its global growth

potential. The vision stated by the CEO and President Jorma Ollila in 1992 included four

elements: telecom, global, focused, and high added value. The non-core businesses not in

line with this vision were divested from its business portfolio during the 1990s. The Nokia

Mobile Phones and Nokia Networks were selected for global expansion. Towards the end

of the 1990s, it established the Nokia venture organization, which was to diversify into

related fields within the mobile communication area. Recently, Nokia established two new

strategic business units called the Nokia Enterprise Solutions Group that focuses on

corporate solutions and the Multimedia Group that will focus on bringing multimedia to

consumers. This can be seen as further diversification into related fields.

The Salcomp case company was established in 1973 by Salora. Later, in the early

1980s, Nokia acquired Salora including Salcomp. Salora consisted of a number of business

fields including TVs, monitors, TV/satellite receiver components, power supplies, and

chargers. All these businesses had entered international markets. As Salcomp started to

globalize, the other businesses were sold or discontinued. As Nokia focused on

telecommunication, Salcomp was then further divested from Nokia and it became part

of a private equity group, EQT in Sweden. EQT holds more than 20 companies in a variety


of industries, such as telecommunications, engineering, medical devices, service

outsourcing, and technology and consumer products.

Tecnomen was established in 1978 and it became part of Kyro Corporation in the mid

1980s through acquisition. When internationalizing Kyro had diversified to a number of

unrelated fields, including paper and board, sawmill operations, energy production, safety

glass machines, tempered glass, and telecommunications (Tecnomen). It decided on a

focused strategy in the mid 1990s and first divested the paper-related businesses. Later,

towards the end of 1990s and early in this decade, Kyro narrowed its focus to safety glass

machines and divested all but the safety glass and power businesses from its portfolio. In

this process, Tecnomen was also separated from Kyro Corporation in 2001, when it

became an independent company listed on the Helsinki Stock exchange.

Based on the above case descriptions and examination of the corporate level portfolio

strategies, we now turn our attention to Proposition 1 (presented in Section 3.4). Indeed,

globalization required focusing on one or a few strategic business units that had the highest

global growth potential. Also, it could be seen that in the mature stage of globalization, the

companies also started to seek global growth through related diversification. It can be

concluded that Proposition 1 was supported. This was especially evident for Nokia Mobile

Phones and Nokia Networks. An interesting additional finding was that the divested

strategic business units, such as Salcomp, also developed into global businesses under new

ownership. So also did our fourth case company Tecnomen after its divestment from Kyro.

Also, early signs of efforts by them to seek further growth through diversification into

closely related fields were noted.

4.2.2. Development of the marketing scope

The development of the scope of the product, brand, and channel strategies during their

globalization will next be described.

NMP had a number of separate terminal product lines targeted at different standards in

the world and it also produced network equipments, private mobile radio systems, and

pagers. At the end of 1980s, NMP focused entirely on terminal manufacturing and the

unrelated lines were transferred to NET. Moreover, in the early 1990s, the terminal-related

product lines were brought together under centralized functional management. As the

company globalized further, the number of product lines was increased and the scope

broadened, first from business users to consumers and then in the late 1990s from voice

centric telephony to new areas like games, music, and imaging. In addition to own brands,

NMP was a private label and OEM manufacturer 10 years ago. For example, in 1993,

NMP still sold the phones under Nokia, Technophone, Mobira, and numerous Original

Equipment Manufacturer (OEM) brands. To increase brand recognition, Nokia decided to

focus on a single branding strategy, Nokia. Now Nokia is among the leading brands in the

world. Lately, Nokia has introduced a luxury brand called Versus, which is targeted to rich

persons. NMP has used indirect sales channels from the beginning. Due to the fast growth,

it would not have been possible to build a sales channel to consumers of their own. NMP’s

direct customers are operators and distributors that then sell the product further to point of

sales outlets. The first such channel members were the telecommunications specialists.

Later, consumer electronic chains and mass retailers have also started to sell the products

to end-users. Although NMP does not own or directly participate in sales to the end users,


they actively support the point of sales by providing support to the retail outlets. According

to the executives interviewed the big change in channel development is the widening of

channel coverage during globalization. NMP has achieved a wide coverage in all the major

retailers, including telecommunications specialists, consumer electronics shops, mass

retailers, and car radio/office equipment shops.

NET’s global entry was made by focusing on the GSM standard in the early 1990s and

providing core elements for these systems such as switches, base stations, and

transmission equipment. As it globalized, it gradually expanded from conventional

network-infrastructure-related product lines to providing packet data networks, appli-

cation servers, multimedia platforms, content machines, and service-enabling equipment,

to mention only a few areas. NET has also used the Nokia brand during globalization,

although it has mainly been the responsibility of NMP to build the brand. As stated by an

executive in an interview: ‘The Nokia brand is a tremendous strength when selling

infrastructure in 2003 compared with the situation in the early 1990s when such a brand

was not established.’ NET sells the infrastructure equipment directly to operators. The

consolidation and globalization development of NET’s customers is a big change. There

have emerged 3–5 major operators that operate on a global scale. The direct channel was

used until recently when a dual channels strategy was introduced, in which for example

wireless LAN products are sold indirectly while other core products are sold directly.

Also, ‘hybrid channels’ are used in some cases in which the sales promotion is direct, but

delivery is handled by a local partner in the country (see Gabrielsson et al., 2002, p. 78).

Also, Salcomp had a large number of product lines at the end of the 1980s, ranging from

power supplies for industrial solutions to office solutions, mobile phone chargers, and

different types of subcontracting. It focused on switch mode mobile phone chargers and

entered the global markets with these. Later, in the globalization process, it expanded first

to linear chargers and then also to other personal handheld device chargers. Salcomp has

used the Salcomp name all the time in the type label of the products, but accepts the brands

of mobile phone manufacturers on the plastic housing of the chargers. Over the years, the

Salcomp brand has developed into a well-known brand for their customers, i.e. mobile

phone manufacturers. In the early days, Salcomp used indirect channels to deliver its

products to international markets. Later, when expanding to the global markets, the switch

mode chargers were sold directly to mobile telephone manufacturers. This customer base

has developed gradually from one mobile phone manufacturer to include almost all

leading mobile phone manufacturers in the world. Recently, the customer base has also

been widened by targeting other personal handheld device manufactures (cordless

telephones, handheld computers, shavers).

Tecnomen had a number of product lines at the end of the 1980s in telecommunica-

tions, industrial automation, and data collection systems. It decided to focus on

telecommunication in the early 1990s and then gradually expanded the number of

product lines to five when globalization intensified. Tecnomen has consistently used the

same brand, Tecnomen, for its customers. It has also developed sub-brands for services

such as voice zone, mail zone, fun zone and time zone. This approach was implemented

when the numbers of products increased at the end of the 1990s. In end user interfaces,

Tecnomen’s brand is not visible as these are branded according to operator requirements.

Tecnomen in turn used one domestic customer (Tamglass) and other indirect sales channel


partners to enter the international markets and then shifted into building a direct sales

presence when globalizing the business. Recently, in addition to direct sales to operators,

indirect channel partners (e.g. Siemens and Nokia) market the products as part of their

total network deals. Also, increasingly hybrid channels are used in which the partner

performs some functions and Tecnomen performs others directly.

Cross-case analysis shows that the case companies had a large number of diversified

product lines in their international phase. A few were selected for global expansion. As

globalization advanced, the number of product lines and products in each line were

increased. However, these were highly related, offering synergies across product lines. All

case companies developed their branding strategies during globalization. The emphasis

was, however, on increasing the brand recognition among their customers instead of on

developing the number of brands used. The main pattern seen in the development of

channels during globalization is the widening of the channel coverage. On the basis of the

above description and examination, it can be concluded that the companies have

developed from a diversified marketing offering in the international stage into a focused

one as globalization began. The further the globalization proceeded, the broader the

product assortment and the broader the channel coverage became. Hence, it can be

concluded that Proposition 2 (presented in Section 3.4) was partially supported. It received

strong support in connection with product and channel dimensions. Branding strategies

deviate from this development. The scope of the brand architecture did not expand to

include multiple master brands, except in case of the luxury brand Versus of Nokia Mobile

Phones. Instead of diversifying resources into development of multiple brands, the global

companies from Finland continue to focus on development of brand recognition for their

master brand. Parallel master brands or sub-brands are used only in exceptional cases,

when the increased product market diversity so requires. Furthermore, it was noted that the

importance of increasing brand recognition was especially apparent in NMP, which

developed products for consumers.

4.2.3. Standardization of marketing strategies

NMP products have become more standardized across countries as the company has

progressed from the international entry and penetration stages towards the global

alignment stage. The most important change was the introduction of common product

platforms at the beginning of the 1990s for all digital standards: GSM, TDMA, and

CDMA. The products have also become very similar with respect to design across

countries. Nevertheless, small adaptations are made in the colors and user interfaces of the

phones to meet national language requirements. It was found that the company has

evolved from a localized product strategy approach during the 1980s (region specific

platforms and products) first to a modified one (global product platforms) and then towards

a standardized product strategy (product platforms, product lines, and individual products

very similar globally). In the international stage, three different brands were use. The case

company aligned these at the beginning of the 1990s and developed the Nokia brand into

one with worldwide-recognition. With respect to channels, the company has consistently

used the indirect channel strategy. Consolidation and globalization of operators have

meant that the channels have also to certain extent become more global and thus more


standardized. Nevertheless, country specific differences still force the company to adapt

their particular channels on the basis of local conditions and available members.

Nokia networks entered and penetrated Europe in the 1980s with the NMT standard.

The spread of GSM enabled Nokia networks to expand to Asia in the beginning of the

1990s and also to the USA at the end of the 1990s. The company’s focus on GSM and now

recently on the 3G standard has enabled it to align strategies worldwide since the

beginning of the 1990s. The products have become very similar across countries using the

DX 200 platforms and in future the new IP-based platforms as well. The product strategy

has evolved from a localized one towards a globally standardized one with similar product

platforms, product lines, and individual products across countries. The Nokia brand has

been used worldwide all the time. NET’s focus when entering the international markets

was on the newly established local operators, but this has now shifted to large

regional/global operators, which have emerged as the result of consolidation development

in the field. The globalization of operators has had a big impact on NET, which has aligned

its organization to serve global customers by establishing teams that deal with the major

global customers and channels.

Tecnomen entered and penetrated the international markets at the end of the 1980s and

the early 1990s. It used a localized product strategy in which it tailored industrial

automation systems to its customers. During the 1990s, it has realized that a more

standardized approach is beneficial and as a result a modified product strategy has been

implemented that uses globally standardized product platforms and modularity to a great

extent. Adaptations are still made for customers and countries in many of the deliveries.

They use the Tecnomen brand for their products worldwide, but since their operator

customers provide the service under their private label in their marketing, the end user

interface varies from country to country in some products. Tecnomen brand is

standardized at business-to-business level, but final services are sold under operator

brand to end-users. The channel strategy was local-operator driven in the early 1990s, but

became more standardized as global partners were increasingly used to deliver

Tecnomen’s products to various customers around the world. These channel practices

vary from country to country to some extent. However, the use of global partners can be

seen as a development towards more standardized channels as products are spread through

these to a number of countries.

Salcomp entered the international markets with a highly adapted product strategy

making fully localized electronic modules for its customers. At the end of the 1980s and

the early 1990s, it developed mobile phone chargers and evolved towards standardized

product platforms in its products. The products are still customized to some extent as to the

enclosure and also part of the electronics, but these are developed from standard platforms.

Hence, it can be seen that Salcomp has shifted from a localized product strategy to a

modified one. Global product platforms are used, but other levels of the product are

adapted. Salcomp brand is visible in the manufacturer type label, but customer private

labels are often used in the enclosures/type labels, and branding is thus modified based on

customers. Salcomp has consistently targeted leading mobile phone manufacturers with a

standardized channel strategy. As these business customers have become global also the

channels used by Salcomp are increasingly uniform across the globe.


Turning to the cross-case analysis, one can conclude that the product strategies have

evolved towards more standardized ones. One case company had developed from a

localized to a modified strategy and three cases had developed from a localized to

a standardized product strategy. Also, with respect to brands, the development is towards

more standardized brands across countries, except for Salcomp, in which the brand is

modified to customer requirements. In channels, standardization is often limited to

processes and actual channel members are local or regional players. Nevertheless, the

emergence of global operators and other industrial channels has offered an opportunity to

standardize the channel to a certain extent. Similarly, the use of co-operation partners to

distribute the products provides scope for channel standardization. On the basis of the

cross-case analysis, it can be concluded that standardized products are increasingly used

during globalization. Also, to a certain extent, standardized brands are used, but not

consistently from market to market. The channels are the least standardized element,

although some indicators of early development towards more standardized channels across

countries were found. Proposition 3 (presented in Section 3.4) therefore received only

partial support, which was derived from the product dimension in which the evidence from

all case companies supported the respective part of the proposition.

4.3. Synthesis and discussion of the results

The above empirical data, analysis and results are next synthesized, and then their

quality and generalizability are examined.

The cases have been examined with respect to the evolution of the businesses portfolio

strategies, and development of marketing scope and standardization of the strategic

business units during globalization. It was found that the companies select one or a few

from a large number of unrelated strategic business units for global market expansion. As

globalization matures the companies increasingly diversify into related fields. Thus,

Proposition 1 was supported. The examination of the evolution of the marketing scope in

strategic business units resulted in the realization that they develop from a diversified

marketing offering to a focused one when globalization began, but that the marketing

offering broadened again as globalization proceeds. The branding strategy was found to be

less disposed to this development and ICT companies from Finland were found to stick

with a single global brand if possible. Proposition 2 was only partially supported, since

evidence was found for product and channel dimensions, but not related to branding.

Furthermore, the standardization of the marketing offering was seen to increase, especially

for product strategies, but also to some extent with regards to brands and channels during

globalization. The standardization of brand and channels was, however, considerably less

than for products across countries. As a consequence, it was concluded that Proposition 3

received only partial support, which derived from the product dimension.

We now turn to an examination of the quality of the research. The multiple case study

research design and replication logic proposed by Yin (1994, pp. 44–50) were followed to

enhance the validity and reliability of the results. For instance, the transcribed interview

summary was circulated to the interviewees for comments and in most cases they were met

in person a second time to verify that no mistakes had occurred. A second person

always crosschecked the interpretation, analysis and in particular the ‘chain of logic’ for


the evidence. Furthermore, key informants and industry experts commented on case drafts

and preliminary findings to enhance reliability and validity, to mention just a few of the

techniques utilized.

Next, the generalizability of such results is examined. Yin (1994, p. 36) has proposed

that the purpose of case studies is ‘analytic generalization’, in which the results are

generalized back to some broader theory, contrary to statistical generalization to

population. Furthermore, Stake (2000) argues that the purpose of case studies is

‘naturalistic generalization’. By acquiring a full and thorough knowledge of the particular,

and as readers recognize essential similarities to cases of interest to them, they can use the

results in the context of their interest as applicable. In this research, we followed the

multiple case study research design and the replication logic proposed by Yin (1994,

pp. 44–50) to enable generalization of the results mainly back to theory. In addition, we

provided the reader with a detailed description of the cases in order to enhance their

understanding of them and enable management to compare the case companies and

circumstances in which they operate with their own.

Moreover, due to the fact that this study was limited to the globalizing internationals in

the Finnish ICT equipment-manufacturing field and since the studied companies represent

about two-thirds of the Finnish ICT equipment exports (Ali-Yrkko et al., 2000, p. 48), the

results are expected to be particularly useful in understanding the development in this

sector. However, a potential flaw may inherit from the significant role Nokia plays in the

Finnish ICT-industry. The generalizability may be reduced due to the fact that Nokia is the

owner of two of the case companies and one case company is a former Nokia owned. Yet,

further analyses showed that no major differences existed between those cases with Nokia

background or without this background. In addition, the study results are expected to be

most relevant for companies originating from SMOPEC countries. To the extent that the

conditions are similar in other industries and countries, the results may be generalizable

beyond the companies studied. However, despite this conclusion, one should be cautious

about generalization beyond the above-presented industry and country of origin scope. It is

up to future research to prove whether such generalization is possible.

5. Conclusions

The internationalization process of firms has been studied extensively during the past

three decades by the Scandinavian researchers (Johanson & Vahlne, 1977; Luostarinen,

1979), whereas globalization has gained less attention. Research has often been conducted

on multinationals originating in the USA and on existing global companies. An unanswered

question has been that of how can international companies from small and open economies

meet the huge globalization challenge of shifting from international to global and

developing global marketing strategies? This study, which focuses on Finnish ICT

companies, seeks to shed some light on this by suggesting that business portfolio strategies

and business level marketing strategies need to be changed during globalization. The study

has several theoretical and managerial implications for academic researchers, business

practitioners, and policy-makers and it opens up a possible stream for future research.


Four theoretical contributions were identified. First, this research is among the first

studies to empirically examine globalizing internationals, i.e. companies that first

internationalize and then globalize. Earlier studies have merely recognized the phenomena

and postulated early assumptions of their behavior (Gabrielsson & Gabrielsson, 2003a;

Luostarinen, 2001). Second, the study received preliminary empirical support from the

ICT field that the globalizing internationals will select one or a few from a large number of

unrelated international businesses for globalization, which earlier conceptual literature

had suggested (see Luostarinen, 2001). The selection process was based on an evaluation

of the globalization potential of the various business units as suggested by earlier research

(Gupta & Govindarajan, 2000, pp. 46–47). As globalization matures, the globalizing

internationals seek further growth through related diversification. Also, an interesting new

finding was that the divested units often developed into global businesses. Third, research

related to use of a narrow versus a broad scope in marketing strategies has been relatively

limited (Porter, 1985, pp. 54–55). This study has supported and brought important new

results indicating that marketing strategies change during globalization (Chen & Paliwoda,

2002; Gabrielsson, 2004; Gabrielsson et al., 2002). The business unit level marketing

scope of the globalizing internationals developed from a diversified marketing offering to

a focused one when globalization began, but the marketing offering broadened again as

globalization proceeded. In contrast, the branding strategy was found to be less disposed to

this development and ICT companies from Finland were found to stick with a single brand

if possible. Fourth, recognizing that the product strategies become more standardized

across countries during globalization of the company is important (see Douglas & Craig,

1989; Yip, 1989). With respect to brands, the results were somewhat incoherent as some

cases moved towards more standardized brands across countries while others continued

using customer brands, which then resulted in country-based variation. Furthermore, it

was noted in line with earlier research that channel strategies are among the most difficult

marketing parameters to be standardized (Rosenbloom et al., 1997).

Based on the above theoretical findings, four major managerial implications can also be

drawn. First, the study suggests that globalizing companies must first identify the frame of

their business environment, resources, and strategic levers. Based on an external and

internal analysis, the implications of the globalization approach for the business portfolio

and marketing strategy should be considered. This study provides a framework and

propositions for transformation of international businesses into global ones. Second, the

globalization of a strategic business unit is so demanding in respect of required managerial

and financial resources that the implication for corporate level management is that only

one or a few strategic business units may be selected for global entry. As total sales are

derived increasingly from one or a few strategic businesses during globalization, the

importance of strategic business unit level decision-making seems to be increasing. As a

result, the corporate and strategic business unit decision-making also becomes highly

interlinked. Third, the marketing strategy dimensions that were important for the

globalizing internationals were identified: scope and standardization of the marketing

programme. The study pinpoints that the need for broadening of the marketing scope

during globalization is related merely to product assortment and channel coverage.

Furthermore, the standardization of the marketing mix was found to be the most vital with

respect to products.


The study also provides a fruitful starting point for four interesting future study areas.

First, it would be interesting to test the developed propositions in a large international

survey in ICT or some other similar field. The survey methodology would allow increased

generalizability of the results presented in this research. Second, it would be interesting to

compare the results of the marketing strategies of globalizing internationals found in this

study with the research on born globals (see, e.g. Luostarinen & Gabrielsson, 2004; Oviatt

& McDougall, 1994). This might yield interesting findings on differences in marketing

strategies of these two globalization approaches (Gabrielsson & Gabrielsson, 2003b).

Third, the framework developed is also expected to be useful for studying the development

of business operation modes and strategies of globalizing internationals in depth. Finally, a

deeper understanding of co-operation with different value network members could bring

interesting findings. For example, how co-operation partners could be used for adapting

products and the marketing offering based on country and customer needs, while the

producer could focus on a relatively standardized offering.

Acknowledgements

The authors acknowledge the Jenny and Antti Wihuri foundation for their financial

support.

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