Barriers to internationalization–a study of the pharmacy sector in trinidad and tobago


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Barriers to internationalization–a study of the pharmacy sector in trinidad and tobago

  1. 1. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 ISSN:2249-5347 IJSID International Journal of Science Innovations and Discoveries An International peer Review Journal for Science Research Article Available online through BARRIERS TO INTERNATIONALIZATION–A STUDY OF THE PHARMACY SECTOR IN TRINIDAD AND TOBAGO Sandeep Maharaj1, Balraj Kistow1, Avinash Ramnarine1, Reynold Baldeosingh1, 1Arthur Lok Jack Graduate School of Business, School of Pharmacy, The University of the West Indies, St. Sureshwar Pandey1, Ranabir Pal2 Augustine; 2Professor, Community Medicine, Sikkim Manipal Institute of Medical Sciences, 5thMile,Tadong,Gangtok, Sikkim, India. This study seeks to examine the barriers to internationalization ABSTRACT faced by the retail pharmacy sector in Trinidad and Tobago. The studyReceived: 13.04.2012 used a survey methodology designed to measure a firm’s willingness toAccepted: 17.06.2012 internationalize and to determine the barriers that pharmacies perceive as being major constraints in their efforts at moving beyond the borders*Corresponding Author of Trinidad and Tobago. Three hypotheses were put forward and tested. Of them, Hypothesis 1, which stated that finance was a major constraint, and Hypothesis 2, which stated that network connections were perceived as critical for internationalization were proven to be true. Hypothesis 3, that younger firms are more willing to internationalize, did not prove to be significant. The results show that while finance and networks are major barriers, age of the firms is not significant.Address: INTRODUCTIONName:Sandeep MaharajPlace:Arthur Lok Jack GraduateSchool of Business,The University of theWest Indies, St. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 366
  2. 2. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 The ageing population and increasing healthcare expenditures worldwide are pushing medical devices and INTRODUCTIONpharmaceutical companies to bring down product costs. Healthcare does not necessarily need to be administered in a largeinstitution or firm but occurs very often in Small and medium business enterprises (SME) and local environment. Forexample, clinics, laboratories, ambulances, pharmacies. SME have traditionally played a crucial role in the development ofnew products in the biotechnology and medical devices industry. These firms, due to their quick adaptability, ability to identifymarket niches, and considerable innovative potential form an important component of the healthcare industry worldwide(Buyer, 2009). Noteworthy SME in this sector include retail pharmacies which serve the important role of bridging the gapbetween the medical devices and pharmaceutical companies and the general public. As part of the SME sector, pharmaciesserve to provide a source of employment as well as contribute to economic productivity and income. In Trinidad and Tobago there are 253 registered pharmacies. With the exception of a few which are part of largerdepartment stores, most pharmacies in Trinidad and Tobago can be classified as locally owned SME. Many of thesepharmacies have a long tradition of providing high quality service to customers and have established long standingrelationships with customers by providing personalized care and service. To this end, many of the small pharmacies inTrinidad and Tobago have been able to withstand the competitive pressure of the larger players in the sector and are some ofthe more successful SME in the country. Additionally, Trinidad and Tobago has also been successful in producing a regularsupply of pharmacists to service the industry through the pharmacy training and certification program of the University of theWest Indies, School of Medicine. Notwithstanding their success at the local level, the pharmacy sector in Trinidad and Tobago has been very slow inmoving to locations outside of Trinidad and Tobago. Even though the potential benefits to be gained from the economies ofscale in purchasing can increase competitive advantage in the local market and improves income levels, few, if any localpharmacies have internationalized their operations. This paper seeks to investigate the barriers to internationalization of SME in the pharmacy sector of Trinidad andTobago. Firstly, the paper briefly defines the SME sector, after which the hypotheses are proposed for consideration andtesting. Using a small sample of pharmacies from throughout Trinidad and Tobago, a survey was administered to determinethe willingness of the owners of these pharmacies to internationalize, and a determination as to what constraining factors orbarriers, they perceive as being critical in keeping pharmacies from internationalizing. Small to medium enterprises can be defined in a number of ways. The definition is unique to each country (Ward et al,Defining SME2010) as well as different industries in the same country (Business Dictionary, 2010) and is usually based on the country’s orthe industry’s most current economic development. Therefore the way a country defines its SME’S may be subject to change inthe future. Statistics Canada defines an SME as any business establishment with 0 to 499 employees and less than $50 millionin gross revenues. In the US, any firm from a small home office to a large corporation may be called a SME. The InternationalChamber of Commerce (ICC) defines a SME as having 100 to 2000 employees (Business Dictionary 2010). The system used todefine small to medium enterprises in the European Union (EU) takes into account a business’s turnover rate in addition to itsbalance sheet (Ward et al 2010). This is essential for classifying businesses that will be able to benefit from EU programs orpolicies specifically designed for small and medium-sized enterprises (Europa- Summaries of EU legislation, 2007). EUMember States traditionally had their own definition of what constitutes an SME, for example the traditional definition in International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 367
  3. 3. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376Germany had a limit of 500 employees whereas in Belgium the limit was approximately 100 employees. Nevertheless, the EUhas recently started to standardize the concept (Wordiq 2010). Its current definition categorizes an SME as a firm with 50 to250 employees, an annual turnover of Euro 7 to 40 million, total assets of less than Euro 27 million, not more than 25 percentownership by a large corporation and/or annual balance sheet total of EUR 10-43 million (Eurofound, Small and Medium-sizedEnterprises,2007). In the EU, SME’s dominate and comprise approximately 99% of all firms, and employ between them about65 million people (Wordiq 2010). In Trinidad and Tobago, a small Enterprise is one with 6 to 25 employees, assets of $250,000 to $1.5 million andannual sales of $250,000 to $5 million; and a medium Enterprise is one with 26 to 50 employees, assets of $1.5m to $5millionand annual sales of $5m to $10 million (SME Development in Trinidad and Tobago 2010). SME, compared to big business, havea reputation for innovation. For this reason, and because of their difficulties in attracting capital, national and regionalfostering of SME commonly occurs (Wordiq 2010). Entrepreneurs’ perceptions of the barriers to internationalization will influence their decision on which markets theyHypothesischoose to enter and the level of international involvement. Morgan (1997) contends that the research about export barriershas tended traditionally to emphasize two forms of export barriers: first, the problems which discourage firms from engagingin export activities and, second, problems experienced by firms which have already initiated export operations. While withregard to the latter, barriers identified are often experiential in nature (Leonidou 1994); on the contrary, in non-exportingfirms, export barriers tend to be perceptual reflecting the decision makers subjective opinion and beliefs (Morgan 1997).Although, the first studies referring to perception of export barriers go back as far as the 60’s and 70’s (Bilkey 1978), the studythat exercised a major influence in a subsequent stream of research on the topic can be attributed to Rabino (1980). Therelevance of Rabinos (1980) study relies on the fact that he identified not only the actual problems facing exporting firms, butalso their perception as to why their peers did not export. Five major problems were considered in order of importance:paperwork, selecting a reliable distributor, non-tariff barriers, honoring letters of credit thus emphasizing financial constraintsand communication with customers. Hook and Czinkota (1988) found that while non-exporters placed great emphasis on problems associated withinitiation of export activity (e.g., difficulties in raising the initial investment, tariff and non-tariff barriers, and lack ofinformation about exporting), exporters were mainly concerned with operational issues (too much red tape, transportdifficulties, ill-trained personnel). In the early 2000s, there was an apparent reduction of interest in the topic, with fewerstudies appearing in the most relevant scientific journals. Among the fewer studies undertaken in this field, Shaw and Darroch(2004) found a number of significant differences in perceptions of barriers to internationalization across non-exporters, likelyexporters, and exporters. While the major barriers faced by non-exporters were firm size, limited market knowledge, limitedexperience, and limited financial resources among others, in the case of exporters and likely exporters the main obstacles werelimited financial resources, limited access to capital, lack of government incentives, and limited market knowledge. Studies relating to financial barriers include studies relating to general barriers of a financial nature (Burpitt andFinancial barriers to InternationalizationRondinelli, 2000; Campbell, 1996; Ward, 1993), issues of resource availability (Ali and Camp, 1993; Karagozoglu and Lindell,1998), cost of operating overseas (Rhee, 2002) and limited access to capital and credit (Ward, 1993). The barriers that are ofgreatest concern are those relating to limited financial resources and limited access to capital. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 368
  4. 4. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 In a study of SME’s conducted in Eastern European countries, Svetlicic et al (2007) found that compared to largerfirms, SME’s face larger financial and capacity problems. They found that when comparing barriers to the internationalizationof SME’s and large firms, SME’s are more vulnerable to barriers. This particularly applies to the lack of financial resources, forwhich the difference was the largest and statistically significant (Svetlicic et al 2007). In New Zealand limited access to finance is a big issue as younger firms are unlikely to have the same access to capitalfunds as more established firms (Kirpalani et al., 1987). This barrier could be preventing some entrepreneurial new ventures(ENV) from internationalizing as much as they might wish. The observation that only 11.8% of New Zealand ENVs haveexternal equity partners may be a reflection of this difficulty to attract capital investment in small firms. For small firms, thisproblem of access to capital and resources has been observed by a number of other researchers (Ali and Camp, 1993; Buckley,1989; Coviello and McAuley, 1999; Fillis, 2001; Karagozoglu and Lindell, 1998; Kirpalani et al., 1987). Not surprisingly,financial barriers are perceived as being greatest for the smallest firms (Ali and Camp, 1993; Karagozoglu and Lindell, 1998).The above literature forms the basis for our hypothesis, which states that access to finance would be the major barrier facedby pharmacies from Trinidad and Tobago in internationalizing process.Hypothesis 1: Access to finance is the major constraintplaced on pharmacies in Trinidad and Tobago in the process of internationalizing. Social networks can be defined as "interconnected social relationships that offer opportunities for, and constraints on,Social Networks and Internationalizationbehavior" (Brass et al, 2004). Networks consist of nodes (firms and people), referred to as "actors," and the set of tiesrepresenting the relationship between nodes. Networks can provide various benefits, including information (communication),affect (friendship), goods and services (work flow), and influence (advice) (Brass et al, 2004). Networks are an important source of social capital. Social capital is defined by the OECD as networks, together withshared norms, values and understanding that facilitate co-operation within and among groups. Firms can benefit from normsof co-operation and trust embodied in various types of intra-firm and inter-firm networks (The Well Being of Nations, OECD).Fukuyama (1995) contends that there are positive correlations between social capital and various indicators of economicperformance but these relationships are complex as there are a many variables involved. Through social networks, firms can gain access to and mobilize external resources in order to aid the initiation ofinternationalization. The mediation can provide the small firm publicity, contacts and legitimacy, resulting in firstinternational contacts and development of international business relationships. Zhou et al, 2007 argues that social networksplay a mediating role in the relationship between inward and outward internationalization and firm performance. Themediating mechanism is attributed to three information benefits of social networks: (1) knowledge of foreign marketopportunities; (2) advice and experiential learning; and (3) referral trust and solidarity. Using survey data from SME’s ofChina, they found some support for this mediating role of social networks in the form of ‘guanxi’ (the network of relationshipsamong various parties that cooperate together and support one another). The results imply that international businessmanagers should consider social networks as efficient means of helping internationally oriented SME’s to go internationalmore rapidly and profitably. Networks exist at various levels of analysis (Hoang and Antoncic 2003). Interpersonal networks focus on individualpeople as actors. Inter unit networks are networks between organizational work groups, such as divisions, business units, andsubsidiaries. Inter organizational or inter firm networks represent a level of analysis that focuses on organizations as actors. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 369
  5. 5. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376Examples of inter-firm networks include joint ventures, strategic alliances, joint programming, collaborations, businessgroups, consortia, relational contracts, and some forms of franchising and outsourcing. Networks can be described as either having “weak ties” or “strong ties”. Weak ties are those considered to be socialacquaintances, while strong ties are those such as the friends and family of an actor (Burt 1997; Kraatz 1998). Cranovetter(1973) gives some salient properties for identifying the strength of ties. There are namely the amount of time spent together,the emotional intensity, the intimacy, and the reciprocal services that characterize the tie. The more contact the SME has withothers doing business abroad, the more acquainted its decision makers will become with the process of doing businessinternationally. The more familiar the international market is to an individual the less risky it is perceived. As such it isexpected that the greater contact with international networks the greater the wiliness to enter the international market. Forthe purpose of this paper we hypothesize that the stronger the network ties between the entrepreneur and the actors in theinternational arena the more likely they would be willing to expand their pharmacy operations into an international location.Hypothesis 2: Firms with strong network ties abroad are more likely to the willing to internationalize. Child and Rodrigues (2007) argue that whether a firm was high-tech or not was not associated with earlyFirm’s Age and Internationalizationinternationalization. However, younger firms were more likely to have internationalized early in their life, which is consistentwith early internationalization being a rising trend among SME’s. The differences between international and domesticmarkets often mean the knowledge and capabilities that SME’s developed for domestic markets not directly applicable tointernational markets. SME’s need to depart from the existing routines and practices developed in their original markets anddevelop new knowledge about foreign markets and learn local practices (Lu & Beamish, 2006). Such a departure from existingpractices can be a difficult one because of the path dependence in the development of organization routines and practices.Once routines or practices are established, they are taken for granted and applied automatically in subsequent operations(Zucker, 1977). Therefore, organizational inertia in the form of established routines and practices could be barriers toorganizational learning which is essential for the success of internationalization. An internationalizing firm must unlearn oldroutines and practices before new routines and practices can be learned and established (Barkema and Vermeulen, 1998;Autio et al., 2000). Organizational inertia is often a function of firm age. The older a firm, the more established the routines andpractices, and the higher the level of organizational inertia (Hannan and Freeman, 1984). We therefore hypothesize that theyounger the firm, the more willing would it be to venture into the international arena. Hypothesis 3: The younger the firm themore willing would they be to internationalize. Data was collected using a standard questionnaire (Appendix 1) administered using face to face interviews for the METHODSpharmacies in Trinidad; and telephone interviews for the Tobago. A total of 30 pharmacies were surveyed during August2010. The health care sector in Trinidad and Tobago is divided into geographic regions and managed by Regional HealthAuthorities. There are five such regions in Trinidad and one on Tobago. Pharmacies were chosen so that that there wasrepresentation from all of the regions of the Health Authorities in Trinidad and Tobago. Table 1 shows the geographic spreadamong the various regions. The data collected was analyzed in SPSS, using descriptive statistics and chi square test forindependence. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 370
  6. 6. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 Table 1 - Number of Pharmacies Surveyed by Region Name of Survey Area Private sector medicine outlets 1. North Western Regional Health Authority 6 2. Eastern Regional Health Authority 7 3. North Central Regional Health Authority 6 4. Tobago Regional Health Authority 5 5. South Western Regional Health Authority Region 6 Total 30 None of the pharmacies had more than 40 employees counting all branches. On average there were 8 to 10 employees RESULTS AND DISCUSSIONS (FINDINGS AND ANALYSIS)per branch. Of the pharmacies surveyed 50% has been in operation for more than 10 years, 30% for between 5 to10 years and20% less than 5 years. Approximately 90% were set up as private limited liability companies, 7% were partnerships and 3%were set up as family owned entities. In relation to the number of branches, 70% had only one branch, while 20% had twobranches and 10% had either three or four branches.Sixty three percent of the pharmacies surveyed indicated that they had basic knowledge of the international environment as itrelated to pharmacies. This basic knowledge was largely limited to operational knowledge and some ideas of the regulationsand guidelines in setting up operations in an international location, mainly other Caribbean countries. Thirteen percent of thepharmacies indicated that they had an in-depth knowledge of the operational and regulatory requirement of the internationalenvironment. This knowledge was not limited to the Caribbean market but also to North America. Approximately one-quarterof the pharmacies (24%) indicated that they had no knowledge of the operational or regulatory requirement of the pharmacybusiness outside of Trinidad and Tobago. In relation to the willingness to internationalize, 40% indicated that they had no interest in expanding theiroperations abroad and were contented to service the domestic market. 57% indicated that they were interested in goingabroad but did not have any strategic plan towards internationalizing with the next 12 to 24 months. Only one pharmacy(3%) indicated that it was actively looking at the prospect of internationalizing its operations. Hypothesis 1 – Finance as a In term of the constraints to internationalization, as shown in Table 3, 57% of the sample indicated that limitedBarrierfinancial resources was the major barrier to internationalization. This provided further support for the first hypothesis, whichstated that financing is a major barrier for local pharmacies in expanding operations abroad. This finding is also consistentwith the literature in other countries thus supporting the notion that financing is a major issue where the internationalizationof SME’s is concern. Domestic competition was identified as the second major barrier at (26%) followed by the absence ofnetworks ties in international markets (13%). Not surprisingly, human resource availability was not cited as a majorconstraint as the University of the West Indies has a very successful pharmacy training program within its School of Medicine,from which a number of highly trained pharmacists graduate each year. These findings are also consistent with that ofSvetlicic et al (2007) who found that compared to larger firms SME’s are more heavily burdened with the barriers of financiallimitations and a lack of knowledge about the foreign market, even though these SME’s may consider themselvestechnologically competent. While SME’s may be able to easily overcome the knowledge barrier by hiring personnel with International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 371
  7. 7. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376international experience and fostering networks, the financial barriers are always more surmountable for SME’s as comparedto larger firms (Svetlicic, 2007). These results would be informative for government bodies charged with the mandate of promotinginternationalization as it could help to guide their policy action by helping firms to overcome these barriers especially as itrelates to financing. It would also be useful to delve further into the nature of the financial barriers so that specific policies canbe formulated to address them. An example of this is where some firms have difficulty raising finance while others may beseeking insurance. Hypothesis 2 – Network ties and Internationalization Table 2: Willingness to Internationalize Willingness to Internationalize Frequency Percent No interest 12 40.0 Interested but no action planned 17 56.7 Very willing 1 3.3 Total 30 100.0 Table 3: Constraints to Internationalization Constraints Frequency Percent Financial 17 56.7 Network 4 13.3 Competition 8 26.7 HR constraints 1 3.3 Total 30 100.0 Table 4: Network Connections and Willingness to Internationalize Willingness to Internationalize Total No Interested no Very willing Interest action Strong Connections Count 7 17 0 24 % of Total 23.3 56.7 0 80 5 0 1 6 Weak Connections Count % of Total 16.7 0 3.3 20 Total Count 12 17 1 30 % of Total 40 56.7 3.3 100 Pearson Chi-Square Value: 11.771, df: 2, p=0.003 Table 5: Years of Operations and Willingness to Internationalize Years of Operation Willingness to Internationalize Total no interested no action very willing less than 5 yrs Count 0 6 0 6 % of Total .0% 20.0% .0% 20.0% 5 - 10 yrs Count 5 4 0 9 % of Total 16.7% 13.3% .0% 30.0% more than 10 Count 7 7 1 15 % of Total 23.3% 23.3% 3.3% 50% Total Count 12 17 1 30 % of Total 40.0% 56.7% 3.3% 100.0% Chi-Square Tests; Pearson Chi-Square Value: 6.601, df: 2, p=0.16 International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 372
  8. 8. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 Relationships with actors in the international market have been identified as a major factor in fostering internationalmarket entry and expansion. Market orientation for local pharmacies considering globalization would include knowledgeacquisition of business practices, consumer needs, cultural preferences and competitive pricing in global target markets. Theinformation gathered has to be analysed (formally or informally) and shared with key stakeholders. A market-orientedcompany is likely to cope with environmental uncertainty in foreign markets, where its knowledge of those markets isenhanced (Armario, Ruiz and Armario, 2008). Without a sound market orientation strategy, which is impacted by experientialknowledge, the Trinidad pharmacies are constrained, thus resulting in delays in their global expansion plans. Trinidad andTobago pharmacies, as SME’s, may be challenged by the lack of experiential knowledge and market orientation relating to newmarkets. This can prove to be one barrier to globalization as when the learning curve for doing business in the new country, issteep, it can be prohibitive. Having strong networks in these markets can help to overcome this barrier. From the datacollected, 13% of the respondents indicated that the absence of network ties was a barrier to internationalization. Further to this, Pearson’s Chi-Square test for independence shows that there was a significance relationship betweenwillingness to internationalize and the strength of network ties (p = .003). Pharmacies with strong network ties were muchmore likely to internationalize than those with weak network ties. This result supports hypothesis 2, indicating that networkties are an important factor in SME’s internationalizing. Knowledge of other markets can be obtained from persons whom are trained or worked in foreign countries. In thecase of Trinidadian pharmacists, most of who are trained locally, experience from working in foreign countries is limited.Licensing, language, and work permit regulations reduce the opportunities for gaining experience in other markets. Withoutregional or international experience, local pharmacists may find the home market to be ‘psychologically safer’ thus the focusremains on competing locally. Since most local pharmacies are owned by pharmacists, the company is dependent onexperiential knowledge of the pharmacists for its globalization thrust. Geographic distance can also be an impediment toglobalization and the Trinidad pharmacy may choose to limit their expansion plans to home and similar countries. As a resultthese pharmacies may not be as confident to invest in North American, European, Asian or Latin American countries.These results would be informative for government ministries and other state policy making bodies as well as pharmaciesassociation that might be a position to make ties and establish link with related parties abroad. These groups can serve as aconduit to cause exponential growth in local pharmacies wanting to internationalize but lack the international linkage andavenues necessary to give information and knowledge. Callard and Prange (2008) contends that the way traditional internationalizers and born globals approachAge and Internationalizationinternationalization is different because the manner in which they establish, continue, and consolidate their foreign presencevaries. These differences in terms of age and speed of internationalization emphasize new ways of anchoring andsubstantiating their competitive advantage on the international scene, which is likely to entail performance differentials. Lu and Beamish (2006) suggest that the existence of routines and long held organizational practices work against afirm moving into the international market. These attributes then become deeply rooted in practices that are supportive of thedomestic market and SME’s become uncomfortable and unwilling to venture into the uncertain international market which isat odds with its ingrained practices. Zucker (1977) links these practices and routines to organizational inertia and see this as amajor barrier to internationalization as firms must now unlearn and change their practices to suit the new challenges of theinternational arena. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 373
  9. 9. Sandeep Maharaj et al., IJSID, 2012, 2 (3), 366-376 The results do not indicate that age was a significant factor in the willingness of pharmacies from Trinidad andTobago to internationalize. Chi-Square test of independence shows that there were no significant difference in means betweena firm’s age and its willingness to internationalize. This result is in contrast to the findings of Lu and Beamish (2006) whichfound age was a significant factor in a firm’s internationalization efforts. One factor which could explain these results is the level of domestic competition. All pharmacies had some level ofcompetition with their immediate vicinity. Twenty percent of the pharmacies had between 1 to 5 competing pharmacieswithin two kilometers of their business, while 43% had between 5 to 10 competing pharmacies within the same radius. In37% of the cases there were more than 10 other competing pharmacies within two kilometers of their business. Thus, in spiteof age, firms may have been forced to direct their attention to the domestic market. Clercq et. al.(2005) suggest that firms thatinvest in domestic learning activities, as opposed to international learning activities, may be less likely to internationalize.Having to focus their learning efforts on the domestic market could have affected these firms internationalization outlook.Another possible reason for age not being a significant factor in willingness to internationalize could be due to the nature ofthe operations. While the pharmacies are legally organized as limited liability companies, many are in fact managed as familyrun operations. Family-run firms very often lack ambition and determination to expand their operations abroad, contentingthemselves with manageable company and market size apart from any other obstacles. The incidence of ownership andmanagement in decision making and family-determined management also hinder internationalization (Svetlicic, 2005). There seems to be little intention on the part of pharmacies in Trinidad and Tobago to take their operations outside of CONCLUSIONthe country at this time. The results indicate that while many are interested on going abroad financial, networking anddomestic competition are posing significant constraints to achieving internationalization. Financial barriers remain a majorimpediment for SME’s given the size of the investment necessary to internationalize many SME’s are unwilling to bear thefinancial risk of failure, as failure can be detrimental to their domestic operation. Consistent with the literature, networkconnections remains a strong and vital motivator for firms to be willing to internationalize. It is recommended thatgovernment and the pharmacy boards use their influence to create and foster network connections for pharmacies that mightbe inclined to internationalize but lack the network connections to gain knowledge and information about the overseasmarket. In cases where networks may be weak, years of operation did not significantly affect the willingness tointernationalize. This is inconsistent with the literature but could be attributed to the unique circumstances in the domesticmarket and family orientation of the pharmacies in Trinidad and Tobago. One of the major limitations of this paper was thesample size. This resulted from time and financial constraints. It would therefore be worthwhile to include a larger segmentof the pharmacies throughout the country. Further research into the impact of other factors such as domestic competition andownership structure on the willingness to internationalize needs to be addressed. These all need to be done with specificfocus on the Trinidad and Caribbean type economies.1. Ali, A.J. and R.C. Camp, R.C.(1993). The Relevance of Firm Size and International Business Experience to Market Entry REFERENCES Strategies. Journal of Global Marketing 6 (4), 91–108.2. Armario, Julia M., Ruiz, David M., and Armario, Enrique M. (2008). “Market Orientation and Internationalization in Small and Medium-Sized Enterprises”, Journal of Small Business Management, 46(4), 485 – 511. International Journal of Science Innovations and Discoveries, Volume 2, Issue 3, May-June 2012 374
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