Tho D. Nguyen and Nigel J. Barrett
Executive Summary
In general, firms in transitional markets are confronted with a lack of knowledge about foreign markets for international business activities because of their limited resources for conducting international marketing research. Previous research has discussed the Internet as an abundant data source and in terms of its cost effectiveness and speediness. Unfortunately, a significant factor that affects international business behavior is not data; it is experiential knowledge. In this article, Nguyen and Barrett argue that firms are not equal in the competitive advantages they gain from knowledge obtained from the Internet. Only firms that are able to use the Internet to collect data effectively and efficiently and are able to internalize the data and transform them into more useful levels of knowledge can gain this source of advantage.
Nguyen and Barrett develop a model that explains the process by which firms use the Internet to collect data, evaluate its relevance, and internalize it within their existing knowledge for international business activities. The model also incorporates the roles of market and learning orientations in firms’ utilization of the Internet and internalization processes. Using a sample of 306 firms engaged in international business in Ho Chi Minh City, the major business center of Vietnam, Nguyen and Barrett test their model and find positive relationships among Internet utilization, information relevance, knowledge internalization, and foreign sales intensity. As is hypothesized, Internet utilization affects information relevance, which plays a significant role in knowledge internalization and leads to a higher level of foreign sales. In turn, when the level of foreign sales increases, firms use the Internet more frequently. In addition, Nguyen and Barrett find that market and learning orientations underscore firms’ Internet utilization and knowledge internalization.
Nguyen and Barrett’s findings have several implications for top managers and managers who are responsible for international business activities in transitional markets. To use the Internet as a source of knowledge for international business activities, managers should bear in mind that the knowledge offered by the Internet is primarily in the form of data, the lowest level of knowledge. Nguyen and Barrett believe that knowledge internalization is essential, and firms are advised seek this to improve their performance in foreign markets. Furthermore, managers should nurture market and learning orientation approaches to foster the utilization of the Internet and knowledge internalization.
Biography
Tho D. Nguyen is a research fellow, School of Marketing, University of Technology, Sydney, and University of Economics, Ho Chi Minh City. He received his PhD from the University of Technology, Sydney. For many years, his teaching, research, and consulting activities have been in the areas of internationalization and branding. He has extensive experience in conducting market research for multinational companies in the Asian region during the past 15 years. His current research includes studies of the impact of the Internet on the internationalization of firms and branding in transitional markets. In addition to Journal of International Marketing, he has recently published in Asia Pacific Journal of Marketing and Logistics and Journal of Customer Behaviour.
Nigel J. Barrett is an assistant professor and head of the School of Marketing, University of Technology, Sydney. He received his PhD from the University of New South Wales. For many years, his teaching, research, and consulting activities have been in the area of international/global marketing, with a particular focus on the internationalization of organizations in the Asian region. He has extensive experience in conducting market research for Australian companies in the region during the past 20 years. He has published widely in the area, and his current research includes studies of branding and the impact of the Internet on the internationalization of firms in emerging markets, including China, Vietnam, and Thailand. In addition to Journal of International Marketing, he has recently published in Asia Pacific Journal of Marketing and Logistics and Journal of Customer Behaviour.
Journal of International Marketing, Vol. 14, No. 2, June 2006
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