Dissertation

Leeds University
Business School
Networks and SMEs Rapid Internationalization:
I Like Local Case Study
Abenet Tamrat
The University of Leeds
Leeds University Business School
Dissertation supervisor: Surender Munjal
Month and year of submission: August 2015
Word count: 11,666
This dissertation is submitted in part fulfilment of the requirements for the degree of
MSc International Business

Leeds University
Business School
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Networks and SMEs Rapid Internationalization: I Like Local Case Study Abenet Tamrat
MSc International Business Dissertation 1

Acknowledgements
I wish to thank all those who have supported me in completing this project and throughout my
year abroad at Leeds University. The support and encouragement I have received is truly
appreciated.
Ø Sanne Meijboom and Indrakshi, Wangu from I Like Local
Ø My dissertation supervisor Surender Munjal
Ø Personal tutor Jeremy Clegg
Ø Professor Elizabeth (Yi) Wang
Ø Fellow MSc colleagues and friends
Ø My previous colleague and friend Travis Handfield
Dedication
________________________________________________________________________
Every challenging work needs self-effort as well as guidance of elders, specifically those who are
very close to our heart. I wish to dedicate the completion of my dissertation for my Master’s of
Science degree to my family and especially to my mother- Yeshi Tolessa.
Your Son,
Abenet (John) Tamrat


Abstract
_____________________________________________________________________________

Today global markets are more competitive than ever and small medium enterprises have joined
in on the international scene by overcoming traditional obstacles. Traditional theories and
frameworks of networks are general enough to encompass and explain some of the basic
behaviors and actions of SMEs active in rapid internationalization but further studies and
framework will need to be established to gain a better understanding of how SMEs can best
utilize networks in their pursuit of rapid internationalization.
This is a single case study implemented through a qualitative analysis from interviews to
examine, I Like Local’s network and the ways it interacts and utilizes these relationships to
internationalize. Results show that traditional process of utilization of networks is not always
implemented as prescribed from theories and frameworks. I Like Local usage of social media and
Internet based search engines play a vital role in finding, establishing and developing network
partners. The findings show that although individual actors in the network my not have as much
influence alone, as a group they can impact the internationalization of I Like Local.


Table of Contents
Acknowledgement 1
Dedication 1
Abstract 2
Table of Content 3-4
List of Figures 5
Chapter 1 Introduction
v 1.1 Overview and Introduction 6
v 1.2 Research Question 7
v 1.3 Research Approach 7-8
v 1.4 Research Motivation 8
Chapter 2
v 2.1 Firm Background 9
Chapter 3 Literature Review
v 3.1 SMEs International Development 10
v 3.2 Uppsala Model 10-11
v 3.3 Network Based Approach 11-12
v 3.4 Procurement of Knowledge through Networks 12-14
v 3.5 Network Relationships 14-15
v 3.6 Network Ties 15
v 3.6.1 Social Network Roles in Country and Institutional Context 15-16
o 3.6.2 Strong Ties vs. Weak Ties 17-18
o 3.6.3 Managers Implications 18-19
v 3.7 Literature Review Summary 19
Chapter 4 Research Methodology
v 4.1 Research Methodology Approach 20
v 4.2 Research Instruments 20-21
o 4.2.1 Interviews 21-22
o 4.2.2 Secondary Data 22
v 4.3 Limitations 23


v 4.4 Research Design and Strategy 23
v 4.5 Analysis Structure 23-24
Chapter 5 Findings
v 5.1 Research Question Findings 25-29
v 5.2 Research Approach Findings 29-31
Chapter 6 I Like Local Result Analysis
v 6.1 Influential Actors in the Network
o 6.1.a Pre-Existing Business and Social Relationships 32
o 6.1.b Development of Newly Formed Relationships 32
o 6.1.c I Like Local Position Within Network 33-32
v 6.2 I Like Local Usage of Networks 33-
o 6.2.a Business vs. Social Network Usage 33
o 6.2.b Strong vs. Weak Network Usage 34
o 6.2.c Formal vs. Informal and Country (Institutional) Development
Context 34-35
v 6.3 Additional Factors 35-36
Chapter 7 Discussion (Case Study) 37-39
Chapter 8 Conclusion 40
Appendices 41-49
References 50-53


List of Figures
________________________________________________________________________
Figure 1: Degree of Internationalization of the Industrial System
Figure 2: Rapid Knowledge Development Model
Figure 3: Country Institutional, Social Network and New Venture Internationalization Speed
Figure 4: Strengths and Weaknesses of Theory Building from Cases
Figure 5: I Like Local Network Analysis Model
Figure 6: I Like Local Position in Network and Interactions with Network Groups


Chapter 1. Introduction
________________________________________________________________________
1.1 Overview and Introduction
Traditionally firms such as Multinational Enterprises (MNE’s), once dominated the whole
international markets. MNE’s were the only ones capable of competing on an international scale
due to financial constraints and smallness, keeping Small Medium Enterprises (SME’s) limited to
local markets.
The combination of globalization and technological advancement has led to the consequent rise
of small enterprises (SME) rapid internationalization, changing the international business
landscape. The swift changes, have opened up opportunities for SMEs to internationalize faster
and faster (Knight and Cavusgil, 2004). Traditional impediments to internationalization are no
longer a major limitation to rapid internationalization for SME’s (Freeman, Susan, Edwards and
Schroder, 2006).
Many factors have contributed to the rapid internationalization of SME’s but one key element
identified is, networks. Management’s ability to understand the networks their firm operates
within and identify how to utilize networks, in their pursuit of international growth, play a vital
role in the firm’s strategy (Andersson and Wictor, 2003).
This phenomenon has intrigued and challenge researchers frameworks and theories of
internationalization (Rialp et al., 2005). SME’s ability to leverage their networks capabilities to
overcome “resource poverty” in their pursuit to rapid internationalization (Freeman, et al., 2006).
This was once restricted to only multinational enterprises, with the resource and finances
capabilities required to succeed. Thus, leading to further research into internationalization factors
influencing rapid internationalization and the development and expansion of the international
entrepreneurship literature (McDougal and Oviatt, 2000; Weerawarden, Mort, Liesch and Knight,
2007).
Previous studies such as the Uppsala Model and the Network Approach have been referenced, to
explain the rise of SME’s in the international markets. As international markets and globalization
become more dynamic, researchers and SME’s will seek to gain superior understanding on how
they can utilize their networks effectively as they internationalize rapidly.


The study will take a deductive research approach, examining the literature review of Uppsala
Model, Network Approach and the Rapid Knowledge Development Model frameworks. As a
company based research project the focus of this study will be on I Like Local and it’s utilization
of its network and the implications found in relation to networks and accelerated
internationalization.
Qualitative research methods will be utilized through in-depth interviews of I Like Local founder
and a previous intern of I Like Local. The interviews will be analyzed through the literature
review findings concerning, SME’s accelerated growth to international markets through the
network, in an effort to further build our understanding of network interactions affect on
international of SME’s.
Networks play an important role in internationalization of firms, yet there is still limited research
on network roles in the internalization of firms. Future research suggestions point to a creation of
a new framework will need to come from a combined theoretically explanations and modern
frameworks (Rialp, Rialp and Knight, 2005).
1.2 Research Question
Explore I Like Local internationalization strategies through a network framework.
• What are the behavioral activities of firms engaged in actively building networking
capabilities?
• What networks is I Like Local engaged in and how do they contribute to its
internationalization?
1.3 Research Approach
This study aims to advance the understanding of the impact networks have on rapid
internationalization of SME’s through a case study of I Like Local. The research problem will be
approached by:
• Identifying network relationships which have supported internationalization of I like
Local


• Discover and find behaviors and actions taken to increase and leverage networking
capabilities contributing to rapid internationalization.
1.4 Research Motivation
I am interested in investigating how exactly SMEs are able to rapidly internationalize. I find it
very intriguing seeing small firms expand to international markets rapidly and competing in a
traditionally MNE dominated market. Through this research study I will pursue to further my
understanding of this phenomena and contribute to how I Like Local can better utilize and expand
their networks as they internationalize.


Chapter 2. Background
_________________________________________________________________________________________________

2.1 Firm Background
The focus of the research will be on I Like Local, which has been chosen as it presents an ideal
firm to investigating the rapid internationalization of SME’s. As a recent start up I Like Local has
expanded rapidly to offer its service to many different location. As a service based website firm, I
Like Local gives a unique perspective to rapid internationalization of SMEs.
Most research studies have not looked at network and rapid internationalization through service
firm lens, instead looking at technology and knowledge intensive SMEs. Further investigation of
the firm’s story can highlight the activities and behavioral characteristics of SMEs who achieve
rapid internationalization and contribute to advancing how others SMEs can best leverage and
utilize their networks.
All the activities offered by I Like Local are driven and set up with a clear purpose. Their guiding
principles are to connect, engage and empower. Connecting travelers with local individuals in the
community of developing destinations, engaging the travelers to see beyond the surface of the
countries they visit, instead immerse themselves to the local culture and people. Most importantly
the activities must be beneficial to the community and the locals in the community (see appendix
1) (I Like Local, 2015).


Chapter 3: Literature Review
___________________________________________________________________________________

3.1 SMEs Internationalization Development
Network capabilities of SME’s have been acknowledged as one of the important factors leading
to rapid internationalization but no new framework has been created to address how networks
impact internationalization. The Uppsala model and the further revised model of the network
approach have been the most cited frameworks and theories concerning a network perspective of
The Uppsala model has gone through numerous modifications in an effort to address the changing
backdrop of the market landscape but still contends as one of the more relevant frameworks
around with it’s addition of the network approach (Rialp, et al., 2005). Networks play a
significant role in internationalization of firms, yet there is still incomplete research on network
roles in the internalization of firms, especially addressing service firms. A new framework will
need to come from an amalgamation of theories and contemporary frameworks (Rialp, et al.,
2005).
3.2 Uppsala Model
The original Uppsala model emphasized precautious growth to further away markets, paired with
low commitment entry methods to gain more market knowledge, before increasing the firms
commitment to the market (Johanson and Vahlne, 1977). This provided a useful explanation in
understanding the internationalization process of firms who followed their stage progression
model (Johanson and Vahlne, 1977).
Some of the big criticism of the Uppsala model has been due to the rise of firms, who skip some
of the stages within the model and seek out rapid internationalization, compared to established
development patterns of firms (Forsgren and Hagström, 2007). Firms in the service industry have
been pointed to as examples of such firms who forego the incremental stages to
internationalization (Johanson and Vahlne 1990; Johanson and Mattson, 1989).
Johanson amended the Uppsala model with the introduction of the Network Approach, to further
illustrate on the internationalization of firms. Further clarifying, internationalization as an activity
that is continuously established, developed, maintained and dissolved with the intention of the


firm’s aims and purposes. Underlining the importance of the firm’s relationship within its
network even further (Johanson and Vahlne, 2009).
3.3 Network Based Approach
The network approach model considers the firms business environment as an interaction of
external actors that make up the firms networks (Johanson and Mattson, 1988). Due to this
interconnectedness, firm’s internationalization intensity is influenced based on their, network
capacity, which than can be used in determining the firm’s internationalization ability (Johanson
and Mattson, 1988).
Johnson and Mattson explanation of the four-market position of the firm are explained within the
context of Single European Market (SEM) but can be adapted to other relevant networks in
classifying the firm’s market position (Johanson and Mattson, 1989). The interconnectedness of
firms operating within the context of their networks is expressed through the network approach
model. As actors interact, new knowledge is created as an outcome (Johanson and Vahlne, 2009).
This leads to further interdependence, increased productivity, resources dependencies and
strengthening of the network further (see figure 1) (Johanson and Mattson, 1989).
Figure 1. Degree of Internationalization of the Industrial System adopted from (Johanson and Mattson, 1989).
As these activities take place the firm’s knowledge base becomes further extended (Johanson, and
Vahlne, 2009). However, network relationships are also affected by outside factors that can
Network
Governance

Actors

Resources

Exchange

Relationship

Exchange

Relationship

Actors
Actors

Resources

Resources

Interdependence

Interdependence


weaken or strengthen the network, further emphasizing the intricacy of network theory as a
general application of firm’s internationalization process.
In this framework the firm’s place in the network is an important indicator in its
internationalizing ability. The two factors in evaluating the firm’s position are; degree of
internationalization of the firms network and the degree of internationalization of the firm. These
two elements can than be used to identify the four market position of the firm (Johanson and
Mattson, 1989).
Johanson and Mattson, 1989 recognized the four positions of the firm: the early starter, late
starter, the lonely international and the international among others. These four positions are not
stationary but continuously developing and changing (Johanson and Mattson, 1989) the network
can therefore sway the internationalization capability of firms, as the firm is surrounded in a
system comprised with many actors (Johanson and Vahlne, 2009).
Other researches (Ruzzier, M., Hisrich, R.D., and Antoncic, B. 2006; Bell, 1995; Zain and Ng,
2006; Ojala, 2009) have also confirmed a firm’s relationships influence the speed, market
selection and entry modes of internationalization for SMEs (Coviello and Munro, 1995; 97).
Thus, signifies the network approach as an ideal framework in comprehending
internationalization of SMEs.
Although, the network approach is a suitable model it doesn’t fully explain the phenomena of
SMEs internationalization, studies (Bell, 1995). Covillo and Munro (1997) suggest the
amalgamation of the Uppsala model and network approach could offer a more comprehensive
framework of analysis. Johanson and Vahlne (2009) furthered this concept through a knowledge
development model encompassing networks, trust, pre-existing relationships and the acquisition
of knowledge from the development of network relationships.
3.4 Procurement of Knowledge through Networks
Johanson and Vahlne (2009) contended that the stages model does not capture the phenomena of
rapid internationalizing of SMEs; their revised network approach model is seen as a better
framework but also doesn’t effectively explain the rise of rapid internationalization. The network
model emphasis of incremental learning, trust and commitment based on current relationships,
overlooks the role pre-existing relationships can have.


They address this gap in their model of rapid knowledge development by identifying important
key factors such as: relational trust, inter-firm partnership, tacit knowledge and absorptive
capacity in their elaboration of the knowledge development model (see figure 2) (Johanson and
Vahlne, 2009).
Figure 2: Rapid Knowledge Development Model Adopted from (Johanson and Vahlne, 2009)
The model shows that both established and newly formed business and social network contribute
to the acquisition of tacit knowledge, leading to the development of new knowledge for SMEs
undergoing accelerated internationalization (Johanson and Vahlne, 2009). An emphasis is made
on the vital role trust and relationship plays, with relationships taken both as a social and
economical exchange. In light of this, there is clear evidence supporting the relationship
development as the most efficient and reliable channels in increasing tacit knowledge, further
acknowledge in other studies (Coleman, 1988; Williams, 2001; Dixon, 2002; Cousins and
Menguc, 2006; Coviello, 2006; Johanson and Vahlne, 209).
The Johanson and Vahlne (2009) stress the importance of time-based variability of
internationalization process. To further support this they refer to Jones and Caviello (2005) paper
on conceptualizing an entrepreneurial process of behavior in time. This paper views
internationalization within three dimensions: time and place, mode of entry, and location of
P2

Established

Business

and
Social

Networks

Newly

formed

business

and
social

networks

Relational

Trust

Inter-‐firm

Partnership

Tacit

Knowledge

Absorptive

Capacity

Development

of
knew

Knowledge

Relational

Trust

Inter-‐firm

Partnership

P1
P3

P4
P4

P5

P5
P6

P7


operation (Jones and Caviello, 2005). The knowledge models focus on rapid knowledge growth
in creating international relationships, leading them to conclude that internationalization is
therefore an outcome and not necessarily the driver (Johanson and Vahlne, 2009).
The authors underline the importance of technological knowledge firms and how cultural and
institution barriers are less of a concern for them than other SMEs (Johanson and Vahlne, 2009).
Focused on this premises the authors don’t adequately address the causation in increased
knowledge sharing. This can be linked to technological advancements and convergence of
markets, due to technological innovation in communication channels for gathering and sharing
information becoming more readily accessible.
This model also overlook the mangers and decisions makers awareness of the international
process thus, neglects that the rapid development and acquisitions of knowledge as a pro-active
behaviors to internationalization by SMEs. Other studies have also added to highlighting positive
associations between knowledge intensity and rapid internationalization (Oviatt and MacDougall
2005), in addition to links between a firm’s low degree of resistance and rapid
internationalization (Autio, Sapienza and Almeida, 2000).
3.5 Network Relationships
Network approach to internationalization looks through the lens of a firm’s relationship with the
various actors such as; suppliers, competitors, governments and customers (Chetty and Holm,
2000; Johanson and Mattson, 1988). Thus, forming and creating relationships in the business
network becomes a mode of progressing internationalization. Three activities are highlighted in
this progression; international extension through the development of relationships, international
market penetration through increase of commitment, and international integration through
incorporation into international networks (Chetty and Holm, 2000).
Johanson and Mattson (1988) concluded their network approach by forming the four
internationals: The Early Starter, Lonely International, Late Starter and International Among
Others (see appendix 2), with the assumptions of firms seeking out resources necessary for
internationalization from their networks position.
In summary the network approach further highlights the role business relationship can have in
increasing internationalization by introducing the network as an opportunities to harness


relationships in acquiring needed resources and information (Johanson, & Vahlne, 2009).
Coviello (2006) further states in his findings the significance of a firm’s need to cultivate
business relationships to advance the firm’s internationalization speed. Interestingly enough,
Coviello (2006) indicated evidence of social ties playing a role in the early stages of SMEs
development, with gradual transition to business network ties.
3.6 Network Ties
Researchers have identified and extensively written about business network (Chetty and Holm,
2000; Johanson and Mattson, 1988; Johanson and Vahlne 1989; Freeman, et al., 2006; Coviello
and Munro 1995; 97), while overlooking the role social and/or relational network have in
internationalization until recently (Rialp, et al., 2005; Ellis, 2011).
In recent years social networks have gained tractions as researches began to take look at the role
of networking not only from a western perspective (Johanson and Mattson, 1988; Johanson and
Vahlne 1977) but also from eastern and emerging markets (Kiss and Danis, 2008; Zhou, Wu, and
Luo, 2007).
Previous studies and models such as the Uppsala Model and Network Approach encompassed the
social network under one roof, as business network (Johanson and Mattson, 1988; Johanson and
Vahlne, 1977). In this regard, they tend to overlook the important role the entrepreneur and
decisions makers social context play, in facilitating the firms internationalization.
Usage of social network and business network can be distinguished through country and
institutional void context (Kiss and Danis, 2008). Studies has shown social networks can play a
vital role in accelerating internationalization by providing the opportunities and facilitating the
internationalization process for SMEs (Chetty and Holm, 2000; Ellis, 2011; Jones and Coviello,
2005; Kiss and Danis, 2008; Zhou et al., 2007;).
3.6.1 Social Networks Roles in Country and Institutional Context
Kiss and Danis (2008) study explores the role social networking plays in varying country and
institutional contexts. In their findings they identified emerging markets heavily dependent on
social networks compared to countries and institutions in developed markets found in the west
(see figure 3).


Figure 3. Country Institutional, Social Network and New Venture Internationalization Speed Adopted from (Kiss and
Danis, 2008)
The figure above further illustrates, networks and their usage is heavily influenced by the external
environment the firm and entrepreneurs operate in. Countries with low-level institutional
development indicate managers utilize strong social connections (ties). Conversely, weak social
connections should be developed in high-level institutional development (Kiss and Danis, 2008).
Johanson and Mattson (1998) network approach hints at the gradual interactions within the
network as an enabler for internationalization. While Johanson and Vahlne (2009) rapid
knowledge development model takes it further with the inclusion and recognition of social
networks and the relevance of pre-existing relationships held by firms and entrepreneurs. Both of
these studies discounted the significance institutional development of the market, in the formation
of; networks and the usage of weak and strong ties as an influencing feature in the speed of
Network ties, are seen as the trust, confidence, predictability, intimacy and time commitment,
active in social and business networks (Sharma and Blomstermo, 2003; Kiss and Danis, 2008).
Relationships and network ties are very unique and difficult to duplicate, allowing SMEs access
to information and knowledge that can present firms with market opportunities, other wise
unknown to them (Burt, 1997; Sharma and Blomstermo, 2003).
Strong
Ties

………………………………
Weak
Ties

Country
Institutional
Context

Low
Level
of
Institutional
Development

Country
Institutional
Context

High
Level
of
Institutional
Development

Speed
of

Internationalization


3.6.2 Strong Ties vs. Weak Ties
Strong ties show a close relationship with consistent interactions, providing advice, discovering
opportunities, trusted referral and access to market knowledge out of the reach of managers and
firms (Kiss and Danis, 2008; Burt, 1997). Strong ties can be the foundation to speeding up
internationalization and overcoming resource poverty associated with SMEs (Zhou et al., 2007).
More importantly strong ties can offer the capabilities to internationalize (Zahra et al, 2000) and
support the manager and firm in gaining legitimacy and buy-in, in the new markets (Kiss and
Danis, 2008; Zhou et al., 2007). Although, strong ties do come with a transaction cost of, time
and commitment in information sharing with partners, leading to development of similarity of
knowledge base with partners (Sharma and Blomstermo, 2003).
Strong ties play a greater role in the founding and growth stage of firm (Kiss and Danis, 2008).
Firms will look to leverage their existing ties (strong ties) instead of creating and adding new ties
(weak ties) (Sasi and Arenius, 2008). In their study Sasi and Arenius (2008) recognized the
internationalization development of SMEs in two phases:
“According to our case evidence, we find that it is useful to divide the internationalisation process
into two phases: early internationalisation, which is aimed at gaining access to global business;
and subsequent international growth” (Sasi and Arenus, 2008 pg 408)
In light of these two phases it is more advantageous to utilize strong ties in the first phases rather
than invest in creating new weak ties. To be successful in the second phase, the firm will need to
re-adjust their ties and expand out, by increase their weak ties. As firms develop their
relationships in the second phase, they will need to resist the urge to get stuck with their strong
ties, as they can become limiting factor in the future (Sharma and Blomstermo, 2003; Sasi and
Arenus, 2008).
Weak ties have much less transaction cost compared to strong ties due to less time and
commitment needed to maintain, yet still offer a variety of information to managers and firms
(Oviatt and McDougall, 2005; Kiss and Danis, 2008). Sharma and Blomstermo (2003) point to
the benefits of weak ties as; new knowledge, greater freedom, and less restrictive. Oviatt and
McDougal (2005) claimed establishing weak tie contacts internationally could have positive
impact in international opportunity awareness, further increasing the speed of internationalization.


Weak ties can further be linked to Johanson and Vahlen (2009) knowledge development model,
weak ties serve to expand and expose the firm’s to new knowledge. This exposure can further
increase the knowledge reservoir, tacit knowledge and increase firms absorptive capabilities,
(Johanson and Vahlen, 2009) a key factor in SMEs ability to recognize and go after
internationalization opportunities accessible to them (Sharma and Blomstermo, 2003).
Both strong and weak ties have positive influence on the internationalization process of SMEs.
Kiss and Danis (2008) study furthered this finding by capturing the role strong and weak ties have
is dependent on the institutional market and country development indicators. Their study shows
us that institutional development moderates the type of network tie usage is effective in that
environment (Kiss and Danis, 2008). These findings can be impactful in how managers and firms
view their network relationship, considering no only the type of networks (business vs. social) but
the network intensity (network ties) they can look to exploit in their internationalization strategy
process (Carson, Gilmore and Rocks, 2004).
3.6.3 Managers Implications
Johanson and Vahlen (2009) contended that manager’s international experience could have a
catalyst effect in the growth and trust in the social and business network, impacting the
accelerated internationalization of the firm (Carson et al., 2004). Further, claiming the flow of
information and knowledge capacity can be influenced through personal social network, which
are difficult to control (Johanson and Vahlen, 2009).
Sasi and Vevica (2008) support and recognize the role social relationships have in
internationalization but point to, pre-existing relationships and the development of a systematic
process, in identifying and selecting network partners in pursuit of accelerated
internationalization as key factors. Managers seek to limit firm risk associated with entering new
markets by leveraging their social network to make effective decisions with limited time of
opportunity and information (Ellis, 2000, 2011; Carson et al., 2004).
Personal and business network ties enable mangers to make improved choices, while overcoming
search cost and information limitations faced by SMEs (Ellis, 2000, 2011; Coleman, 1988). As
managers look to utilize and expand their network ties (Andersson and Wictor, 2003), they need
to be aware of the cultural and country differences and what effect they may have in their
internationalization goals.


As Sasi and Vevica (2008) study shows, network relationships are formed and utilized in
different formats depending on the countries institutional development. By understanding the
context of that network relationships environment, managers can be better equipped in
recognizing which network ties and relationships they need to develop to match their
internationalization strategy.
3.7 Literature Review Summary
A review of the literature on network and rapid internationalization shows varying and somewhat
fragmented views. Researchers have pointed out to the need for a more holistic frameworks and
theories, which will need to bridge research from multiple disciplines. The Uppsala Model,
Network Approach and Knowledge Development Model have been re-focused and developed by
Johanson in an effort to give a general understanding of rapid internationalization through a
stages model progression through networks.
Other researchers have contributed in addressing some of the weakness of these frameworks and
theories in addressing; country and institutional context of networking, the relevance of pre-
existing relationships, pre-existing knowledge and experiences of managers, social ties and
informal and formal relationships. Future research will need to therefore, encompass many of
these factors in progressing our understanding of networks in internationalization processes
further.


Chapter 4: Research Methodology
_________________________________________________________________________________________________

4.1 Research Methodology Approach
Qualitative and quantitative methods are the main two methods used in research. In certain cases
a use of both qualitative and quantitative methods is called for. It’s important to consider the
objective of the research problem in considering which research methods is suitable for this
study.
Quantitative methods tend to be more analytical and objective approach that test theories and
frameworks through statistical application (Hussey J & Hussey R 1997). Qualitative methods are
more subjective and look to further examine in-depth research problem through reflecting and
understanding of the activities taken and the outcome achieved (Hussey J and Hussey R 1997).
Another way to view qualitative research is by the focus and purpose of the research carried out.
Merriam (2009) states that, “qualitative researchers are interested in understanding the meaning
people have constructed, that is, how people make sense of their world and the experiences they
have in the world” (p. 13).
Due to the nature of this study being a more explorative study to gain an insight on the process
and activities of network in relations to internationalization, a qualitative study would be the most
ideal methodology to apply. This study will be deductive and will look at the literature review,
theories and frameworks of network in internationalization and while looking at how network
actually operate in practice.
4.2 Research Instruments
The study will focus will be advancing understanding of networks impact on internationalization
of firms, thus best suited for a qualitative research. Although there are a variety of tools and
methods that can be used in employing a qualitative research, this study will use interviews
(email and Skype), secondary data, and information from Internet sources in compiling a picture
of the firm’s story and it’s network in a case study format.
A Case study of I Like Local will be implemented to test theory, since research outcomes will not
be used to generalize findings but to further advance our understanding of network relationship
on internationalization (see figure 5). A Case study “aims: to provide description, test theory, or
generate theory” (Eisenhardt, 1989, p. 535). Mainstream qualitative methods using case studies
are designed to the discovery and support of casual mechanism (Bennet, Andrew and Elman,


2006).
Figure 4. Strengths and Weaknesses of Theory Building from Cases adopted from (Eisenhardt, 1989).
Strengths Weakness
Likelihood of generating theory
Resulting theory may be too complex,
therefore in opposition to good theory which
should be simple
Emergent theory likely to be testable, can be
readily measured and hypotheses that can be
proven false
Narrow and distinctive theory not readily
generalizable
Resultant theory likely to be empirically valid
Difficulty in testing resulting theory/findings
for its predictive validity remains an issue
4.2.1 Interviews
Majority of qualitative data emerges through conversation and observation of people and their
interactions within their environments. Interviews, when applied correctly can enable the research
to access rich and in-depth data that may not be captured otherwise.
“Qualitative researchers typically study a relatively small number of individuals or situations and
preserve the individuality of each of these in their analyses, rather than collecting data from large
samples and aggregating the data across individuals or situations” (Maxwell, 1996, p. 17)
Interviews will allow for a more in-depth study of the firms and entrepreneur network usage in
advancing rapid internationalization. Kval (1996) further clarifies, “the purpose of the interview
is to obtain descriptions of the life-world of the interviewee with respect to interpreting the
meaning of the described phenomena” (pg. 5-6)
Interviews will be supplemented with relevant secondary data concerning I Like Local and
similar firms that operating in similar environments. Sanne Meijboom will be the focus of the
interviews, as the founder of the firm who’s own personal network are intertwined with the firms
network thus, a key factor in this study. In addition to Sanne, a previous intern, Indrakshi Wangu
and couple of the service providers on the I Like Local platform will be sought out to supplement
the interviews gathered from Sanne. These interviews will enable access to information that
would otherwise be very difficult to find in tracking a small firms network circle (Maxwell,
1996).


Due to time and location limitations, interviews will consist of emails, followed by Skype
interviews, which will be semi-structured and unstructured. Interviews will be recorded and
transcribed to better capture the content provided by the interviewee. The interviews will be
conducted through email correspondence with semi-structured questions (see appendix 4 and 5).
This format will be useful in exploring and understanding the background story of the founder
and the firm in relation to network usage and interactions. A Skype interview will be conducted
with a follow up questions and few self-prompt questions to further go in-depth, with the author
asking probing questions as needed to gain further understanding about the firms network and it’s
behaviors concerning internationalization. (Kyale, 1996)
The number of interviewers is very limited, partly due to the selection of a new start up firm. The
interview and information gathering conducted is not limited to only the just the Skype interview.
Consistent communication channels have been engaged and active through out the research study
from April to August. The most utilized communication medium used by the author, to
communicate with interviewees has been email correspondence, due to distance, time difference
and unreliable Internet access that have come up at times.
First contact conducted with Sanne was in early June to establish objective of research study and
gain a basic understanding of I Like Local operations. This was than followed by an email
interview questions the founder completed and finally followed up with an hour long Skype
Interview in July and 25 minute in August, which have been recorded and transcribed. Indrakshi
Wangu, was interviewed as a between the 1st
and 2nd
interview with Meijboom. Since there is a
limited amount of interviews conducted, they will be manually analyzed through a network model
established from literature review findings.
4.2.2 Secondary Data
Due to I Like Local years of operations being very recent, it limits the depth and varying
perspectives that can be collected about the firms and its story. Information from news articles,
publications and other relevant information will be used in providing supporting or differing
views on the implication of networks have on SMEs internationalization trajectory. Although, it
is a challenge collecting in-depth data, this also presents an opportunity to study the start and rise
of SMEs as they internationalize in real time, something that has not been explored in-depth in
network roles in internationalization.


4.3 Limitations
One of the limiting factors of this study will be the limited individual’s that can be used for
interviews. As a very recent start up I Like Local employees consist mainly of the founder and
various interns, volunteers and freelance workers. For the purpose of this study only individuals
who have worked or interned over four months for I Like Local will be considered for interviews.
This will allow the study to focus on those who have will know more of the detail of I Like Local,
it’s partners, therefore providing more useful information for the study.
In addition to interviewing Meijboom and Wangu, I have reached out to the I Like Local web
page developer for an interview and look to get in contact with some of I Like Local partners and
locals on the platform. I have not been able to get any responses back from the web developer in
participating in the study, contact has also been made with service providers but with limited
internet connectivity and lack of response within the time constraints in finishing the project has
meant these interviews were not able to be carried out.
4.4 Research Design and Strategy
This research study is of an exploratory nature to garner more understanding on a topic
previously researched but will be approached from a new angel. As most research on networks
and rapid internationalization of SMEs have been looked through and studied with knowledge
and technology intensive firms as the focal firms. This study will look at a service-based firm, I
Like Local. Service based firms have generally been overlooked in network theories and
frameworks such as the Uppsala, Network Approach and Knowledge Management Model.
The study of service firms can therefore present a new view of the many frameworks, theories
and findings discussed in the literature review. By studying the use of networks and their
implications to the internationalization of a start up service firm like I Like Local, this studies
finding can highlight the applicability of the mentioned theories and frameworks by researchers.
4.5 Analysis Structure
Based on the findings in this studies literature review, three factors have been identified in
analyzing I Like Local network (see figure 5). First component is to identify the influential actors
within the I Like Local network. This will encompass identifying the pre-existing (established)
and newly formed connections to the firm and the network position I Like Local is in (Johanson
and Vanhlen, 2009). Second is to examine I Like Local network usage through its business and


social networks, utilization of strong ties vs. weak ties and if these usages are different depending
on the country and market institution development (Kiss and Danis, 2008; Sasi and Vevica
2008;). Lastly is to study additional factors that impact the internationalization and network
relationships of I Like Local such as; founders’ international experience, work experience and the
firm’s vision. (Rialp et al., 2005)
Figure 5. I Like Local Network Analysis Model
This analysis will look to further build on the research that’s been reviewed through an in-depth
look into I Like Local founder and firms network. This research will focus into investigating and
identifying pre-existing network ties as well as newly formed ties in the development of the
firm’s internationalization, culminating in identifying the role various network ties played in the
success of the firm now and in the future.
InVluential
Actors
in

the
Networks:

•  Pre-‐existing
busines

and
social
networks

•  Newly
formed

business
and
social

networks

•  Firms
position
in

Networks

Usage
of
Networks:

•  Business
vs
Social

•  Strong
Ties
vs
Weak

Ties

•  Formal
vs
Informal

•  Institutional

Development
of

Foreign
Markets
-‐
Country

Development

Additional
Factors

•  Founders

International

Experince

•  Founders

Proffesional

Experience

•  Managerial
Vision


Chapter 5: Findings
________________________________________________________________________
5.1 Research Question Findings
Through the literature review it is evident that firms engage in activities that enable them to
further their network relationships, in achieving their aims and goals. The first question posed in
this research, looks to see the difference and similarities between theories and practice:
• What are the behavioral activities of firms engaged in actively building networking
capabilities?
In creating their activities, individual locals and NGOs who work with locals, provide activities
available on the I Like Local platforms, are an integral part of the business. Although they are a
key component they don’t heavily influence the speed and reach of internationalization as seen in
other research studies (Johanson and Mattson, 1989; Oviatt and MacDougall 2005).
This difference can be attributed to the strategic goals and vision set out for I Like Local by the
founder. I Like Local partners with local NGOs and Small Travel Agencies, with the view of
them being a good fit if, “they offer really unique [activities], how do they give back to the people
or how do they get involved in the local community” (Meijboom Skype Interview 1, 2015 pg. 4).
As a result, this limits the partnerships I Like Local engages in, to locally based partners who may
lack the capacity to contribute to the internationalization of the firm. I Like Local can best be
described as the lonely international within Johanson and Mattson (1989) four-market position
within their networks, in its network I Like Local is the international firm, already operating in
many countries, with access to a wider range of information and contacts (see Appendix 3).
Second question presented in the study engages in looking at the bigger picture and how the
individual and group actors contribute to I Like Locals growth.
• What networks is I Like Local engaged in and how do they contribute to its
internationalization?
Looking at I Like Locals network in a larger view, it can be split to three main network groups it
currently engages in; Partners and Locals, Clients and Funders and Investors (see figure 6).


Figure 6. I Like Local Position in Network and Interactions with Network Groups
*Future possible partners; Universities, Hotels, Airline Companies, and other organizations with complementary
services
The illustration above shows the interconnectedness and flow of interaction and communication
within I Like Locals network. I Like Local is central and controls most of the communication
flow, outside of bloggers. I Like Locals main mode of communication to it’s three network
groups flow through it’s newsletters, PR campaigns and social media platforms such as;
Facebook, Instagram, Blogs, Pintress, Twitter. I Like Local most utilized tool in forming,
connecting, and maintaining network relationships are channeled through virtual interactions
(emails, blogs, search engines, social media platforms).
Partners
and

Locals

NGOs

Local
Travel
Agnecies

Individual
Locals

Bloggers

*

Clients

Travellers

Women
25-‐40

Adventourus
seeking

unique
experiences

I
Like
Local

Bi-‐Monthly

Newletterr

Social
Media

Platforms

PR
Campaigns

Freelancers

Funders
and

Investors

Start
Up
Events


Clients and Freelancers, Funders and Investor groups, in turn can become contributing partners
through their relationship with I Like Local. This has been already occurring as some bloggers
become clients first, who use I Like Local platform and than blog about their experiences, giving
them more coverage and press with their followers. A freelance documentary producer became a
contributing partner by contacted Like Local to do a documentary on the local individuals
working within I Like Local platform:
“Last year I had contact with a couple of locals because a documentary maker was going to visit
them to make a videos and that was a really nice interactions. Let me see…around 10 locals in
different countries” (Meijboom Skype Interview 1, 2015 page 6)
I Like Local engage freelancers, Funders and Investors groups through start up events or they
reach out to I Like Local and become contributors:
“I really hope to meet interesting people and mainly looking for either partner who are an
extension, well providing an extension service than what we are offering so we can strengthen
each other or maybe to meet interesting people who would like to invest” (Meijboom Skype
Interview 1, 2015 page 8)
Partners and Locals encompass, contributing firms and individuals (bloggers, freelance, etc.) as
well as local individuals, who are on the I Like Local platform offering activities. These local
individuals would have their own internet access, speak English and know how to navigate I Like
Local website and booking process (see Appendix 1). These individuals also tend to run their own
website and or blogs about local places and activities, making them ideal partners. Indrakshi
Wangu, a previous intern at I Like Local further expands on the importance of that I Like Local
partners play:
“We cannot deny the importance of local individuals but to scale up it’s always better [I Like
Local is] tied with as many organizations, community based tourism organizations as possible.
This helps in providing more activities in one… So yes individuals are very good, organizations
give us more scalability and vital reach into the country. I think both are equally important, there
are some fantastic individuals that we have signed up with, that is where we originally started
from” (Wangu Skype Interview, 2015 pg. 5)
Local individuals who work directly with I Like Local or through NGO’s create the backbone of
the business and platform, thus further expanding the range of activities offered as well as
increasing the locations I Like Local operates in.


NGO’s act as intermediaries who work with local people and become “contact person through the
website, so in that case we don’t deal with the locals directly because they don’t have Internet
access and cant speak English well” (Meijboom Skype Interview 1, 2015 page 7). The partnership
with the local NGOs is a very ideal one for I Like Local as it allows them to keep their resources
and focus on scaling up their platform. Having to train how to use their website and the booking
process would be “so time consuming so therefore, in these cases that’s one of the reasons we
work with the NGOs because they know how we [operate]” said Sanne (Sanne Skype Interview
1, 2015 page 6).
The most preferred partners to work with for I Like Local tend to be individual locals directly or
NGOs who work with a group of locals with I Like Local paying NGOs to cover their cost as an
intermediary. After this I Like Local utilizes small travel agencies as partners but are selective in
choosing which agencies to partner with:
“For travel agencies we have a guideline. The main thing is that they are not commercial with a
group of twenty or fifty people going all together. We want very personalized experiences and if
they can cater to that than good, if they cannot, we do not think twice before saying no. So its not
that we have to be associated with travel agencies, we are more than happy to work harder and
find those people who are giving the same experiences with a smaller group, more authentic
experience is what we are looking for” (Wangu Skype Interview, 2015 pg. 4)
The agencies need to be local and small, with unique activities or complimentary services that go
well with I Like Local and are involved within the community. Due to this large agencies are not
sought after, as they tend to be profit driven, seek higher commission rates, not as integrated to
the local community, offer less unique activities and don’t align and match with I Like Local
objectives.
Bloggers are another important set of partners for I Like Local for multiple reasons. Some
bloggers have allowed I Like Local to gain more information of local hidden gems and activities,
connect them with individual locals to join the I Like Local platform:
“Bloggers were contacting me or I found them and we set up trips for them, so what they did was
they went out to do some of the activities and than started writing about it, so that way we got
more publications, since most of them were English speaking bloggers and…we would use them
for trust building “ (Meijboom Skype Interview page 2)
On the client side, bloggers have been a major player in I Like Local network in spreading the
news of the services offered and getting the name out to like-minded individuals who would


utilize the I Like Local website for their next travel adventure. Bloggers also play a role in
building the credibility and trust needed to attract local partners, as well as client trust to use their
services from it’s launch in 2014.
In the near future as I Like Local looks to grow and scale up, it will also look to expand its reach
through addition of actors in its network:
“It’s quite important to scale up to…and interesting party to partner with for example with, airline
company or hotel chains, that’s something we would like to do in the second half of this year and for
that it’s important to scale up and that way it’s much more interesting to partner with travel agencies
and NGOs because than we can offer more activities at the same time instead of a few activities
through individuals” (Meijboom Skype Interview page 10).
As I Like Locals operations and scale gets bigger, the actors in the network will begin to play an
even bigger role. In it’s current state I Like Local fits the description of the lonely international
within its network position but in the near future, with the possible additions of airline companies,
it can incorporate new actors in the network with international capacity. This can create synergies
and growth that might typical be seen in the Uppsala and Network Approach incremental stages
of growth through the utilization of network partners.
5.2 Research Approach Findings
• Identifying network relationships which have supported internationalization of I
like Local
Further investigation of Like Locals relationships which contribute to its internationalization,
shows that no one individual or organization has a large impact but rather it’s the culmination of
the groups of relationships. The impact the three identified groups (see figure 6) each support and
contribute to different part of the business.
NGOs and Individual locals provide the activities and services on which the I Like Local
platform is built on. While no one individual local or NGO have directly contributed to the
internationalization of I Like Local operations, together they indirectly impacted its
internationalization. They are able to do this by allowing I Like Local to offer a variety of
activities in various international destinations, build credibility and trust among locals to increase
activities and service providers on the I Like Local platform:
“So what happens is they constantly get to know what is happening on other fronts, in other
countries or how many new activities we have added on, how many new regions we have opened


up to. This also creates excitement, that yeah things are going in the right direction and than they
can contribute more and they also get motivated even further” (Wangu Skype Interview, 2015 pg.
3)
In turn I Like Local is able to also establish credibility and trust to clients who become consumers
of the service and products I Like Local individual locals provide through their platform, which
would otherwise most likely not be there. While NGOs, essential act as intermediaries between I
Like Local and groups of local individuals, small travel agencies are utilized more for exposure
and partnerships in increasing available activities on offer from the local travel agencies or I Like
Local platform.
• Discover and find behaviors and actions taken to increase and leverage networking
capabilities contributing to rapid internationalization.
Bloggers play a unique roles as clients and advocates of the firms, further creating exposure and
awareness of I Like Local activities to potential new consumers and activity providers. “When I
ask them how did you find out about I Like Local, the first customers mainly find out through a
blog they read for some publication and now they differ either through my own online
publication, or blog or search” (Meijboom Skype Interview 1 2015, pg. 1) Since most of the
bloggers ended up trying out I Like Locals service and really liked the concept, they gave I Like
Local more exposure and credibility and I Like Local “would use them for trust building”
(Meijboom Skype Interview 1 2015, pg. 2) The impact of bloggers is evident in its implications
countries like Netherlands and USA, I Like Local has actively pursued Public Relation (PR) and
marketing campaigns in, as well as reaching locals to increase the number of providers and
activities they have available.
Within the Netherland market, I Like Local biggest customers are women 25-40 age range and
adventurous travellers. PR campaigns have targeted magazines and publications that encompass
this target market. These magazines include National Geographic, Cosmopolitan, Grazia,
Columbus Magazine, and Travel Asia in the Netherlands. The PR agency used in the
Netherlands resulted in 50 to 60 publications in the magazines mentioned, creating more exposure
to their target market, as well as getting picked up by bloggers who than reached out, tried I Like
Local activities and published blogs covering I Like Local.
A PR campaign was also done in the USA, Forest Magazine, Travel & Leisure, and Jetsetter.
Compared to the Netherland campaign it wasn’t as successful, only getting around 10
publications and much less exposure. Sanne says “its difficult to tell what the reason, if its the


matter of quality of the agencies because they really had a different methods because I don’t
know the US market, PR market, so maybe they were doing it [how its done in the USA]”
(Meijboom Skype Interview 1 2015, pg. 2-3)
PR campaigns in combination with active involvement in start up events provide needed exposure
as I Like Local continues to grow. From its beginnings and in the future word of mouth, referrals
and recommendations play a greater role in the growth of the business and social media and the
Internet are the driving force at the heart of I Like Locals internationalization. Due to network
actors limited to local activities, I Like Local expands its network capabilities for
internationalization through the use of technological platforms rather than direct network actors.
Sanne describes the process of finding partners as I Like Local internationalizes:
“What we do is we search per country and see what comes up as soon as we fill in, community
based tourism, NGOs focused on community based tourism, NGOs focused on local
empowerment and than we see what kind of activities these NGOs are setting up. In cases we
think it might be interesting for them and for us we reach out to them.” (Meijboom Interview 2
page 2)
Contrary to literature review, I Like Local utilizes technological platforms rather than direct
network actors in connecting and growing their networks. Although, the process described by
Sanne can be seen to express a stage or incremental progression in I Like Locals
internationalization, which would follow Johansson Uppsala model of incremental progression,
gaining more market knowledge before increasing commitment. As a service firm it makes more
sense that I Like Local has to have some incremental stages of progression to new markets as it
involves providing a services, which has huge implications on the business performance.


Chapter 6. I Like Local Result Analysis
________________________________________________________________________
6.1 Influential Actors in the Network
6.1.a Pre-Existing Business and Social Relationships
Pre-existing business relationships don’t seem to be a major success factor in I Like Locals
network capabilities and its internationalization currently. While social relationships on the other
hand have played a role in the development and exposure of I Like Local:
“Yeah when we launched of course I used my own connections to build up my Facebook
likes, to promote that we were live, to share but I don’t think from my own network I got
the most customers” (Meijboom Skype Interview 1, 2015 pg. 1)
Although Sanne pre-existing social connections assisted in creating more exposure and assisted in
advising with the business development of I Like Local, they didn’t necessarily contribute
directly to gaining the clients and brining in profits.
6.1.b Development of Newly Formed Relationships
Methods of finding and creating new relationships and partners have stayed the same from the
inception of I Like Local to its current process:
“Search per country and see what comes up as soon as we fill in, community based tourism, NGOs
focused on community based tourism, NGOs focused on local empowerment and than we see
what kind of activities these NGOs are setting up. In cases we think it might be interesting for
them and for us we reach out to them. We only find them so far online by searching” (Meijboom
Skype Interview 1, 2015 pg. 2)
Utilizing the search engines Sanne looked for service providers in 8 countries and had the website
and services go live after 80 service providers were registered on the platform. Currently
operating out of Kenya, Sanne is able to use different channels available to her like, presentations
to local NGO networks and advertising in local newspapers, this is due to having greater insight
on the modes of channels most effective in Kenya and having a physical presence in the country.
6.1.c I Like Local Position Within Network
As the lone international among its partners in its network, no one individual actors heavily effect
I Like Local, instead the most influential actor for I Like Local is the technological platform on
which it relies upon heavily. These technological platforms are it’s website, email, search
engines, blogs, PR campaigns, newsletters and publications and social media (Facebook, Pintress,


Blogs, Instagram). It’s utilization and further integration of technological platforms plays a vital
role in attracting and retaining valuable service providers as well as customers.
6.2 I Like Local Usage of Networks
In recognition of I Like Locals role as a facilitator of a service it is not surprising to uncover that
the firms usage of its network is quite unique and different. As literature review tells us the
interactions and usage of networks by a firm can be window to identifying a firm’s capability to
internationalize. I Like Local interactions, can be viewed as limited or at the least not fully
utilized and more one sided at this current time. As Sanne expressed in her interview:
“Yeah sometimes they are contact us just to ask how is it going, or they post something on the
Facebook group page. Yeah but mainly it’s from our side and I think the reason is also because
their participation is free” (Meijboom Skype Interview 1, 2015 pg. 7)
Interestingly enough this can be evidence of the slow incremental growth I Like Local maybe
going through. Due to low number of bookings, user engagement and its current business infancy
stage, I Like Local interactions is more one way, concerning its business partners. It can be
reasonable to expect in the near future as the platform builds and usage increases, commitment
from partners will also increase and change over time, further aligning to an incremental growth
theories of firm’s expansion.
6.2.a Business vs. Social Network Usage
Since I Like Local is in its infancy stage of its business cycle it is still very reliant on the founder
and their capabilities. In this early stage Sanne is utilizing more of her social network to gain
information and advice in areas such as marketing and business development. Outside of
leveraging social connections to further grow the I Like Local platform, Sanne actively attends
start up events in Netherlands and more recently in Hong Kong to provide exposure, look for
opportunities for collaborations and possible business investors:
“I really hope to meet interesting people and mainly looking for either partners who are an
extension, well providing extension service than what we are offering so we can strengthen each
other or maybe to meet interesting people who would like to invest” (Meijboom Skype Interview
1, 2015 pg. 8)
As I Like Local grows the dynamics of business vs. social usage will most likely change, as it is
currently heavily relying on social network usage.


6.2.b Strong vs. Weak Network Usage
Sharma and Blomstermo (2003) study of strong and weak network usage concluded, it would be
more favorable to use strong ties in early stages of internationalization growth, with a
rearrangement to weak ties usage in following stages of internationalization. I Like Local have
done the opposite and it seems to have worked favorable for them, as they are operational in most
of Southeast Asia without the usage of strong ties.
The benefits of weak ties have been utilized by I Like Local to attain new knowledge and
information, through the use search engines, social media and personal contacts. As researchers
have pointed out (Johanson and Vahlen, 2009; Sharma and Blomstermo, 2003; Oviat and
McDougal) weak ties can have a positive impact in identifying international opportunities and
increasing the absorptive capacity of the firm.
The use of strong ties over weak ties could of potentially become a limiting factor to I Like Local
as that would tie the firm to its partners (NGOs, locals, community based tourism) through a
much more time consuming interactions. Due to their partners being already limited to local
reach, it was much more advantageous for I Like Local to utilize technological capabilities in
forming a wide variety of weak ties rather than limited amounts of strong ties. When I Like Local
starts establishing partnership with other international firms, this may change and favor the usage
of strong ties, as these relationships can be the foundation to speeding their internationalization
process.
6.2.c Formal vs. Informal and Country (Institutional) Development Context
Formal and informal communication methods tend to be dependent on the country aspects
similarly, to usage of social vs. business networking. I Like Local is an intermediary service
focused on unique traveling experiences and relationships with people, therefore more emphasize
is placed on informal communication, to get a more personable feeling across:
“I think we try to create personal experiences and that it doesn’t really matter if we are at a start up
event, even there we try to bring over the personal experiences…of course we have some formal
things like, we have business cards, we have presentations for investor but the layout is less
formal, it’s more about the experience… we always try to put an informal tone” (Meijboom Skype
Interview 2, 2015 pg. 4)
While the form of communication I Like Local chooses is more a strategic choice selected by the
firm, country and institutional development can have direct effects in how they reach customers


or service providers. Due to their activities being provided located in developing nations, I Like
Local is learning the difference in operations and availability of activity offering:
It’s not always the government that’s playing the role, I think in Malaysia they do. They started a
homestay program, even though we tried contacting many homestays they didn’t really reply… It
can be either lack of interest or using Internet sufficiently and Malaysia has a lot of very
commercial things and therefore is not a fit. Sometimes there is less activities not because there is
nothing, sometimes it’s too touristy that’s its difficult to find unique things (Meijboom Interview
1, 2015 page 10).
Institutional development in a country like, internet access can become a prohibiting factors in I
Like Local operations, as the platform runs and needs the service providers (or NGOs they work
with) to have access to their website platform. As an example, Meijboom pointed out Myanmar
and Burma were really difficult to operate for reasons like lack of activities available or the
monopolization of the tourist activities by large tourist agencies.
India and Thailand happened to be much more easier, with greater activity offerings and ease of
operations. Although not necessarily detrimental to success, insight to country development and
key institutions such as, the tourism industry, NGOs, community or government based tourism
initiatives can further assist navigating the challenges presented and how to overcome them in the
future.
6.3 Additional Factors
Sanne Meijboom has had previous professional and international experiences before she founded
I Like Local. She has lived in 5 countries and visited over 40, India was the first country outside
of Europe Meijboom worked in and gained international experience, followed by Brazil.
Speaking of her time in India Meijboom said:
“That experience, not the working but living in India gave me such an in-depth view on the life
their. It really was a fantastic time. I think the first 3 moths I didn’t really have an opinion about
what I thought about the country whether I liked it or I didn’t like it and suddenly their was a point
that I really started loving it” (Meijboom Skype Interview 1, 2015 pg. 11)
Meijboom direct professional experience in India may not have had a direct impact on I Like
Local but the international experience of living in a different country coupled with other
professional work experiences are factors to consider. Meijboom further states, “I think it helps
you build up an international network and you can partner with people and see where they can
help out” (Meijboom Skype Interview 1, 2015 pg. 11) concerning international experiences. In


the Netherlands Meijboom worked as a consultant to assist business streamline their operations
and activities. Although the work itself might not directly translate to skills used and needed in I
Like Local, Meijboom acknowledges:
“It’s not that I make use of this knowledge because it’s a different field of course but it gave me
like a certain way of thinking. I think it’s similar with University… it’s less important what you
have studied as it is the way you think…You start to learn a way of how to think, approach and
seeing things” (Meijboom Skype Interview 1, 2015 pg. 11)
Adding up Meijboom international and professional experiences it becomes easier to see the
vision she has set for I Like Local and how they have been impacted by her experiences. The
inspirations coming from her prior experiences of traveling around the world and having
extraordinary experiences with locals seems to have been the catalyst in starting I Like Local.


Chapter 7. Discussion (I Like Local Case Study)
____________________________________________________________
Technological advancements have changed how individuals and business interact with one
another, in response to an ever-increasing converging global market. SMEs who were once local
have jumped at the opportunity and lead the charge of the peer-to-peer sharing economy. The
sharing economy originally began with firms like Craigslist, EBay and Napster but has been
really driven by the new front-runners like Uber and Airbnb (Zhuo, 2015).
The new era in the sharing economies presents multitude of opportunities for consumers, while
offering market efficiency:
“Globally, the sharing economy’s size in five key sectors was approximately $15 billion in 2014.
It’s projected to reach $335 billion by 2025. The success of Uber, Airbnb and TaskRabbit isn’t a
fad -- it’s a new way of doing business.” (Zhuo, 2015)
As this new model catches on many new opportunities will be developed through the sharing
economies, one of these being I Like Local, founded by Sanne Meijboom and launched in 2014,
an avid traveler and entrepreneur. I Like Local is a variation of a peer-to-peer travel platform that
is focused on predominately in Southeast Asia currently (see appendix 3 and 4) with future
aspirations of expanding to Africa and South America (Zerly, 2015).
Currently I Like Local employs 6 people, has operations in 10 different countries in Southeast
Asia and offers 6 categories of activities for travelers (see appendix 6) (I Like Local, 2015).
According to I Like Local newsletter published in February:
“At the moment we have over 300 activities in 10 countries in Asia (a growth of 80% in
comparison when we started) and our host community grew to 130 people (80% growth) and
slowly we are receiving more and more bookings. Although this is not going very fast it was
expected as in the first year people need to get to know about you before they will start booking.
We do see more and more people visiting the site which is a good sign” (I Like Local News, 2015)
I Like Local matches travelers with a local in developing countries through their online website,
providing unique experiences, organized by local people in developing countries (I Like Local,
2015). By booking these local activities customers empower and stimulate locals directly, while
fully experiencing and interacting with the culture, food, people and locations they visit. I Like
Local offer a variety of activities; Homestay, Farmstay, Trek and Tour, Arts and Culture, Food
Experience and Volunteering (see appendix 6) (I Like Local, 2015):


Engagement and interactions between partners can signify the strength and the value of the
network relationship, therefore the lack of engagement and commitment from service providers to
I Like Local is worrying, if not effectively tackled in the near future. Meijboom points to the
small number of users currently on the platform, along with the free registration to the I Like
Local as the current reasoning behind the lack of engagement and interactions from service
provider.
This could most likely be a big part of the reason but it could be the lack of buy in to the platform
comes from miss communication or misunderstanding of the longer term benefits expressed to
service providers. The engagement of the service providers could be tackled by providing
opportunities of responsibility, regional or country specific meetings, activities and such.
Relevance and importance play a large part in engagement and this may be an area in need of
more development as it has been on the client and blogger side. Or even a serious consideration
of whether the focus of local partners should be predominately NGOs and community based
tourism organizations that can take on the role of training, developing and engaging directly with
the locals.
This would mean I Like Local has less direct contact with individuals as it focuses on creating
and scaling the platform. This can provide a more focused objective and make it easier and
streamline the service. If implemented correctly, I Like Local could and should emphasize
targeting organizational partners that align with them and build these partners up by creating an
inner network for the partners to interact and learn from one another.
This can benefit the service providers, which in turn benefits I Like Local. If managed and run
correctly this inner network can create the space for similar organizations to see what others in
different or same country are doing and provide insight to all those in the network otherwise
unavailable. This can further build trust, credibility and more engagement that can change the
current typical one-way communication to a more, interactive two-way communication between I
Like Local and service providers.
Currently technological platforms such as social media, website, blogs and search engines have
been an integral part of I Like Local in connecting and creating exposure. This has ideally worked
for some network groups than others. Effective use of technology may not be enough alone in
addressing this issue. Instead this may call for a new strategic approach to be developed, in


gaining the proper social and business interactions most suitable for each country to garner more
partnerships, commitment, and engagement from network partners in developing countries.
Creating multiple ways of engaging and interacting with different network partners will be need
to be addressed in the near future as a one fit all approach may be easier to implement currently
but not as a effective.
Airbnb, Uber and I Like Local are an example of the new trend of companies in the shared
economy age but I Like Local has the opportunity to be one of the first to succeed internationally
in developing nations. I Like Local looks to provide unique experiences to travelers, while
supporting local individuals and communities by providing them with extra revenue. This is a
great and useful concept that provides a win-win outcome for those involved in the exchange. To
reach the next level of success I Like Local growth will be dependent on the active engagement
and support it can muster from all of its network partners. As one of the first with such a concept
there is no road map for success, instead like many other trailblazers it will need to create its own
but take learning lessons from other peer-to-peer platforms like Airbnb and Uber as it grows its
network partners.


Chapter 8. Conclusion
_____________________________________________________________
The dominance of MNEs will continue to be challenged by SMEs as technological advancement
and networks began removing some of the previous obstacles laid in their path. As we continue to
see the rise of SMEs rapid internationalizing and competitiveness, we can further examine the
relationships network have in influencing and determining SMEs internationalization trajectory.
This study further broadens the spectrum of network relationship usage, as well as re-confirm
some incremental growth pattern do take place in service firms like I Like Local, who
internationalize very rapidly. Furthermore, this study expands on our understanding of network
partners and how they can be viewed in assisting the international growth of SMEs. I Like Local
is a unique case as it is a service firm and has expanded internationalized rapidly in an effort to
increase usage of its platform. Regardless, it will need to become more critical and intentional on
what network partners to focus on for different objectives and goals it sets.
There is room for future to further study, the start up, internationalization and maturity stage of
SMEs and how their usage of networks influences SMEs service firms internationalization. A
closer look can be emphasized between service firms leveraging online platforms for peer-to-peer
services and more traditional service firms and how they may differ in their usage of networks. It
would also be intriguing to examine the impact social media platform have in creating,
developing and establishing key network connection for SMEs using peer-to-peer platforms to
rapidly internationalize into developing countries.
Service firms Like I Local will continue to pose questions to researchers studying the role of
networks and rapid internationalization. Past studies and frameworks still continue to be debated,
refined and adjusted to further explain and make sense of SMEs process of internationalizing
using networks. Literature review theories on network and internationalization are readily
available but have become general and basic. A convergence of different fields will be needed to
gain better understanding of SMEs behaviors in utilizing networks, technology, and resources and
the impact it has on their internationalization trajectory.


Chapter 9 Appendices:
_____________________________________________________________
Appendix: 1 I Like Local Participation Guidelines for Service Providers
1
Participation Guidelines

Thanks for your interest in participating on the I Like Local platform. Below you will find
the guidelines for participation and specifics about the participation process.
1. The principles & guidelines
I Like Local is set up with a clear vision and three main principles and guidelines.
These principles are:
1. Connect: connecting travelers with locals in developing countries on a personal
basis, which means:
• We only offer private (no maximum size) or small (max. 5 people) groups.
• In case of accommodation we only promote places with not more than 4
bedrooms.
2. Engage: a traveler must be able to immerse in the local culture by
participating in the daily life of a local. This means:
• Joining them in their day-to-day activities
• Sleep or eat at their place
• Join them in their work (as a farmer, guide, handicraft, fisher man etc.)
3. Empower: the local and/or local community must benefit from the activity
directly
2. The process
In order to join just send us the following details about the activity.
1. Send us information about your activity (within 1 week preferably)
• A description of the activity (what is the traveler going to do. In case of activities
of more than 1 day describe the activities per day)
• Duration of the activity

42

Appendix: 2 I Like Local General Information

1
General Information
5.1 What is I Like Local?
I Like Local is a social travel platform that enables travelers to book a unique, authentic, local
activity with a local in a developing country. In this way I Like Local is creating a win-win
situation for both the local and the traveler.
5.2 What kind of activities does I Like Local promote?
I Like Local promotes activities in the following categories:
I Like Local Homestays
Do you have the dream to start your own bed & breakfast, do you have some spare rooms
and don’t know what to do with them and/or would you like to get in touch with people from
around the world? Now you can offer your house as a homestay to travelers and share each
other’s culture
2
• Minimum and maximum number of participants
• Price per person
• Extra information the traveler needs to know
• A few lines about the local for the online profile + a picture
• A few lines about the local for the online profile + a picture
• Pictures of the activities (minimum size 640x400 pixels)
• Contact details: phone number and email address you want to receive your booking
requests.
2. After reviewing and agreeing on the activity we will compose the text for the website
based on the information received. (2-3 working days)
3. We will send you the link as soon as the activity has been uploaded (1 day). If anything
needs to change, let us know.
4. You’ll receive a password that provides you access to the I Like Local portal. Here you can
manage your bookings and update your calendar.

MSc Dissertation Abenet Tamrat

43

2
I Like Local Farmstays
Do you have a farm and can you use some help or do you just want to earn some extra
money by offering people an insight in local farm life? Both are possible. You can now offer
travelers a stay at your farm and in return receive help in your day-to-day farm activities or
just offer them a room for a fair price.
I Like Local Tour & Trek
Show people your local community, your favorite places and hidden gems. Create your own
authentic, local tour and receive people from all over the world. If it is a city tour with the best
food places, an adventures Himalayan trek or a farm stay at your own farm.
I Like Local Volunteering
Are you looking for somebody to help you with building your house, helping at your farm
or any other temporary chores? Ever thought about asking a traveler to help you out?
Well, you can now offer projects or activities in which you can use some help from others
and they will be happy to offer their help.
I Like Local Food
Do you love to cook or do you simply love food and know the best places in your town to
eat? Well then this is your change to become a professional cook or food expert and earn
some money with it! You can offer a cooking course, home dinner or take the traveler out on
the street to show him your favorite eating spots.
• I Like Local Art & Culture
Are you a painter, an expert in basket making, silk weaving, carving, pottery or any other
local art form? If interested you can now also make money in a different way; by teaching
travelers your special technique! Create your own workshop or course and share your
passion with others.
5.3 How did I Like Local started?
The idea of I Like Local started when I was working as a business consultant. In a world led
by money and short-term vision, I never truly felt I was working on anything valuable. I quit
my job and moved to Brazil. There I found a chance to combine my passion for other
countries and cultures with my belief in the principles of The Sharing Economy: combining
strengths, collaborating and sharing to create more value for more people worldwide.
During the early days of my idea I have spoken to many to find out why they are


44

3
traveling. It confirmed my expectations; more and more people seem to look for
more simple, authentic and unique experiences. Interestingly all of the explanations
were related to spontaneous meet-ups with locals. It didn’t matter if they were on a
budget travel or if they were spending more. They were invited for a dinner or a
party; they were offered a bed or taken to a special ‘insiders- place’. These were
the moments they remembered as the best and are exactly what locals can offer.
With I Like Local I want to create value for both the local and the traveler in a simple and
sustainable way. This I am doing together with my team of wonderful people.
5.4 Which countries are participating?
At the moment you can offer activities in: India, Nepal, Thailand, Cambodia,
Indonesia, Vietnam, Philippines, Malaysia and Laos.
5.5 How does l Like Local earn money?
I Like Local adds 10-20 % on top of the price the local is asking (service fee). It will be
10% for activities of 51 EUR >, 15% for activities between 21-50 EUR and 20% for
activities between 0-20 EUR. The service fee is used for:
• Giving travelers the opportunity to book unique local experiences
• To promote locals in developing continents and create a bigger market for them
• Making the I Like Local concept also available for other developing
countries
• To administer the payments from the traveler to the local and make sure the
traveler gets his money back in case of a bad experience or no show.
This service fee is already included in the total booking price per activity.
5.6 How can I contact you?
You can reach us by email on contact@i-likelocal.com.


45

Appendix 3: The Four Internationals (Adopted from Johanson and Mattson, 1989)
Appendix 4: I Like Local Interview Questioner
Early Starter:

Has minimal internationalization capacity of their own and face outsidership
discrimination, with fewer opportunities for access to global information, thus,
lower potential for degree of internationalization and reliance on
intermediaries (Johanson and Mattsson, 1989).

Lonely
International:

Possesses enough capabilities and resources in the international market to have
advantage over insider competitors lacking international experience and
knowledge (Johanson and Mattsson, 1989).

Late Starter:

Are firms who have very little internationalization experience and knowledge
on their own but are connected with a network with many actors who are
highly internationalized. By leveraging their networks through new or old
connections they can effectively increase their internationalization (Johanson
and Mattsson, 1989).

International
Among Others:

Firms in this position not only have high degree of internationalization but are
also incorporated in networks with high degree of internationalization. More
importantly increased internationalization can become an outcome of increased
integration of resources and exchange relationships within the network
(Johanson and Mattsson, 1989).

1
Firm
Background
Information

Firm name: I Like Local
Respondents name:
Respondent’s position and responsibility:
Size of the company (sales and employees):
When was this company founded? What led to its creation?
Name and total number of countries your company has international activities
with (in order, first to last) and year of internationalization.
Could you briefly describe the main cross-border activities to date that your firm has been involved
in? Which countries are the main markets for your products/ service by value of sales?

Founder’s/Managerial
characteristics
and
vision

1. Can you list relevant international business experiences before you started working at this
company?
2. How does your experience affect decisions related to internationalization or assist in the
firm’s capabilities to internationalize?


46

2
Managerial Motivation
1. Can you describe your primary motivations for expanding to international markets?
2. How did you approach international expansion in the beginning? And now?
3. What risks and rewards for small-service firms, like you, can be identified when entering
new international markets?
Managerial Commitment
1. Describe your commitment to this firm, related to the objective(s) and general activities?
2. How are activities and actions adapted to fulfill internationalization objective(s)?
3. What activities take place in the internationalization process in your firm?
Use of networks
1. How do you use and interact with domestic or international networks? Like personal
networks, business networks which are relevant for your firm.
2. Have you interacted with anybody outside the firm about entering new markets? If yes,
with whom and which institutions or organizations do he/ she belongs to?
3. How long have you known these external contacts? How were these relationship initiated
and developed overtime?
4. What contributions have each of these contacts made to your firm’s Internationalising
activities?
5. What would you say are the most important relationships for internationalisation for you
today? Companies/ organizations or individuals today?
Network International Knowledge Management
1. How do your business and personal networks currently provide information about the
market(s) you are in?
2. What is the most important knowledge provided from your networks in assisting the
firm’s internationalization?
3. Could you talk about your most recent internationalisation activities and how your
networks assisted or provided the opportunity?
4. What international opportunities have your networks identified for future international
expansion? In which country or countries?


47

3
Strategic focus
Foreign Market Entry
1. 1. What is your strategy regarding internationalization? Pro-active/re-active, niche focused?
How heavily do your networks influence this strategy?
2. Do you prefer physically close foreign markets?
3. Concerning the entry of foreign markets, how do you enter them using your networks? And
why?

Strategic
flexibility

1. How have your networks contributed to flexibility in your firm regarding rapidly changing
external conditions?
2. How do your networks support the firm in dealing with unexpected circumstances?

International
network
marketing
orientation

1. Can you characterize the relationship of your firm with consumers and partners?
2. What role do customers play in your network in accelerating internationalization of the
firm?
3. How do you interact with competitors? Are they included in your network in gaining
important information for internationalization?
4. What is the most important target group(s) for your firm? How does your current networks
connect you with this target market?
5. Are you following international trends of your industry? If not what has been a key factor to
success?

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