This chapter aims to shed light on the role that a sustainable orientation plays in strengthening the relationships between global consumers and online brands. Despite many previous studies about the importance of sustainability considerations for national consumers’ brand commitments and purchase intentions, there is a lack of empirical studies focussing on this relationship from a global consumer perspective. A pre-study (consisting of focus group discussions) and a widely distributed international survey with responses from 74 countries show mixed results. Whereas the results from the focus groups imply that a sustainable orientation influences both global consumers’ purchase intentions and brand commitments towards online brands, the survey results imply that global consumers’ sustainable orientations do not affect purchase intentions directly, even though they influence brand commitments. An implication of these results is that an international online brand’s possibility to portray a sustainable orientation plays an important role in strengthening the relationship with global consumers, especially regarding brand commitment.
The purpose of this paper is to investigate the prospective effect of affective commitment on relationship IT capability, and also investigate the role that relationship information exchange plays to support IT capability in industrial markets. Building on information systems research and business relationship research, a research model is developed and tested with LISREL on a sample of 353 customer-relationships of Swedish industrial firms. The results show that affective commitment in business relationships serves as a fundament that strengthens IT capability, when the exchange of information is important to a relationship. Interestingly enough, the LISREL-analysis provides empirical evidence that the effect of affective commitment on IT capability is mediated by information exchange in business relationships, but that the path from affective commitment to IT capability is not significant. Well-functioning information exchange systems are, thus, vital for affective commitment to impact IT capabilities in business relationship settings. This finding contributes with new knowledge about the role of emotions as prerequisites of IT capability development in the interfirm business relationships of industrial firms. The results highlight the importance of emotional bonds to support the development of interfirm IT capability.
Purpose: The study addresses a gap in research concerning the specific purpose of information technology (IT) in business relationships and how it impacts business development and relationship performance. To fill this gap, the purpose of this study is to investigate the prospective effects of IT on business development and relationship performance in the business relationships of industrial firms. Design/methodology/approach: Building on previous research from the industrial business relationship field, 353 relationships between Swedish industrial firms and their customers are analyzed with linear structural relations in LISREL. Findings: The findings show that the effect of IT on relationship performance is not direct but mediated by business development measured in terms of business creation and product development. Research limitations/implications: The study’s results imply that IT that is integrated in inter-firm operations has to be assigned a specific purpose to effectively influence relationship-specific performance. The results also indicate that more research is needed to provide additional insights about the relation between IT and performance in business relationships. Social implications: If the full potential of IT-based solutions could be reached, then this could lead to the generation of new products and technologies and more competitive companies, which in turn would create more jobs and greater wealth. Originality/value: In conclusion, this study fills a gap in research by highlighting that IT studied with a business relationship approach is particularly important under certain conditions. As such, the study contributes to the research stream seeking to understand the role of IT in industrial marketing and how IT should be used for increasing relationship performance.
This study investigates the effects of personal interaction and information technology integration (IT integration) on new service development in business-to-business (B2B) service firms' relationships. Personal interaction, IT integration and new service development are latent variables in a structural model tested with LISREL (N = 138). The relationship between personal interaction and IT integration is strong and indicates that both these constructs are drivers for new service development. Although both these constructs represent diverse ways of interacting, they both positively impact new service development. Hence, managers should not expect IT to replace personal interaction to a great extent in B2B-service contexts.
This paper seeks to contribute to the literature on consumers’ online purchasing behavior as an international phenomenon. Specifically, to address consumers’ Internet skills, website perceived ease of use, and website trust as antecedents of purchase intent. With a crossnational dataset of 788 consumers from different countries, five hypotheses are tested, and a model is suggested. The findings highlight that consumers’ Internet skills and website perceived ease of use positively impact purchase intent. Interestingly, trust in the website does not. To overcome the cases where consumers feel a lack of trust, this study highlights the need for website usability and adapting to consumers’ Internet skills. The findings also illustrate that online shopping is a global phenomenon, a finding that was made possible by analyzing a large international dataset. Future studies can benefit from an online international purchasing approach, which takes the internationality of consumers’ purchasing into account.
Consumers shop increasingly on-line without thinking of national borders. This circumstancehighlights the need to increase the understanding of consumers’ cross-national purchasing and e-commerce. This study focuses on consumers’ online purchasing behaviour, studying consumers’ internet skills, website perceived ease of use and web-trust as antecedents of purchase intent. By analysing a cross-national data set of 788 consumers from different countries, the results show that consumers which make online-purchases are skilled internet- users. Moreover, the lack of trust that consumers may feel when making online-purchases, canbe lessened by a website’s perceived ease of use. The results have implications for future studiesabout e-commerce as an international phenomenon.
This study examines how individuals' social capital and its dimensions affect biotech SMEs' acquisition of foreign market knowledge and financial resources during their internationalization processes. To examine these processes, we conducted a longitudinal cross-case study of 14 Swedish biotech SMEs. The results show not only that all dimensions (structural, relational, and cognitive) of social capital affect the acquisition of foreign market knowledge and financial resources, but also that the usefulness of individuals' social capital often changes during SMEs' internationalization. Social capital use can contribute to a rapid internationalization; however, this may impede a firm's understanding of a foreign market. We thus find that those biotech SMEs that experienced an incremental internationalization process were the most successful.
This paper aims to explore the benefits of a regional internationalization strategy and investigate how a rapidly internationalizing SME’s development of market knowledge relates to this strategy.
Design/methodology/approach
After a brief overview of the literature on international SMEs, the internalization approach and the IP-approach, a case study is introduced and analyzed.
Findings
The case findings illustrate that market knowledge steers the investigated firm to follow a regional approach of operations. The regional strategy lessens perceived risks, saves costs and generates sufficient knowledge about one market at a time.
Practical implications
It is important for managers in rapidly internationalizing SMEs and for policymakers to recognize the benefits of supporting regional orientation initiatives for enhancing these firms’ internationalization.
Originality/value
This paper presents a longitudinal case study that contributes to further the understanding and insights into the operations of born regionals. By probing deeper into the ideas provided by the internalization approach, the IP-approach and research about international SMEs, the study contributes with a unified framework for understanding the benefits for rapidly internationalizing SMEs to operate on a regional scope.
Purpose
This study addresses the research question: How does the experiential knowledge, superstitious knowledge and the wisdom of CEOs influence the internationalization behaviour of SMEs?
An exploratory qualitative study is used. Longitudinal case studies of two Swedish life science companies are analysed.
An individual's prior experiential knowledge influence the newly started SME's market commitments and internationalization behaviour. Such prior experiences can enable early and rapid resource commitments in the newly started SMEs. Relying upon such prior experiential knowledge in deciding upon the company's market commitments however heightens the risk of superstitious learning. The findings illustrate how wisdom can work as an antidote to superstitious learning. Wisdom lures even experienced CEOs away from believing they know more than they actually know.
Research limitations/implications
The study contributes to extend the Uppsala model by incorporating the role of individual-level experiential knowledge. The study also adds value to the literature on small firm internationalization by providing propositions for how the prior knowledge of individual key decision makers influences SMEs' internationalization behaviour. The propositions provide new input to the ongoing discussion in the literature and help to guide future research.
Given the fact that the Uppsala model is centred upon a firm-level view on experiential knowledge, our theoretical understanding is still limited regarding how individual-level experiential knowledge influences the internationalization behaviour of SMEs. This study addresses calls for research on how individuals' prior knowledge influences small-firm internationalization.
Purpose – This paper aims to explore longitudinally a life sciences international new venture’s (INV’s) development of foreign market knowledge (FMK) and how this knowledge development relates to the firm’s entrepreneurial orientation (EO).
Design/methodology/approach – The article adopts a longitudinal case study approach to investigate an INV in the life sciences industry.
Findings – The findings show that the EO of an INV changes during its internationalisation. A strong EO, often considered to be synonymous with the early expansion of an INV, is not always able to guide the INV in its later developmental stages. In its continued internationalisation, an INV instead needs firm-specific FMK accumulated from a process of learning by doing. The knowledge development of an INV is a time-consuming process that cannot be rushed by grafting new and experienced employees.
Research limitations/implications – Future research focusing on larger and broader samples of INVs is recommended to validate this study’s results.
Practical implications – Life sciences managers need to develop their own firm-specific FMK by interacting with their foreign business partners.
Originality/value – This study contributes further insights into the FMK development processes and EO of INVs in the life sciences industry during their internationalisation. Further understanding is also provided about how the industry-specific features of an INV in the life sciences industry influence internationalisation over time. The study’s theoretical implications are that international entrepreneurship frameworks and internationalisation process theory need to be integrated to understand the longitudinal development of INVs.
Is a born-global strategy reflective of high performance or are there merits in a regional strategy? In studying a sample of 32 internationalizing small-and medium-sized enterprises (SMEs), we find that many of the early internationalizing firms that formally meet the accepted “born-global criteria” are actually regional. With this concept as a starting point, this study aims to contribute to the literature on early internationalizing firms by comparing how born globals (BGs) and born regionals (BRs) differ in terms of the liability of foreignness, networking activities and performance. Our results indicate that both liability of foreignness and knowledge development in networks is more challenging for BGs than for BRs, and for this reason, BRs are likely to perform better than BGs. Hence, we identify a “born global disadvantage” stemming from a lack in the capacity of acquiring relevant foreign-market knowledge and tackling foreign-market institutions. The implications of the study highlight the need for researchers and practitioners to be more careful when using the concept of BG and to acknowledge that differences do exist between regional and global business strategies.
This chapter complements the empirical research, highlighting that aspects such as network access and accesses to financial resources also impact the choices that innovative small and medium-sized enterprises (SMEs) in the life-science industry make during their internationalisation. However, focusing on life-science SMEs from one European country, does not yet permit broad generalisations to be made. The chapter presents the ideas that may build a basis for how future public policy instruments can be earmarked to support innovative SMEs in Europe, and possibly elsewhere, thus promoting innovation, entrepreneurship and economic growth. It contributes to the understanding of how innovative and international SMEs grow and survive from a long-term perspective. The chapter focuses on prior research within the emerging field of international entrepreneurship, which typically focuses on innovative and international SMEs. It contributes to international entrepreneurship literature by presenting a longitudinal study based on data of 26 innovative SMEs in the Swedish life-science industry.
This study identifies a gap in research concerning how small and medium-sized enterprises (SMEs) can benefit from pursuing locally (rather than globally) oriented internationalization strategies. Becoming overly dependent on one single foreign market could potentially reduce the inflow and diversity of new knowledge that can serve as input for new product development. This study discusses how this risk can be minimized. In this endeavour we create a theoretical model that investigates how the local sales concentration and relationship-specific commitment of SMEs relates to new product development. To do this we draw on the behavioural internationalization process framework. The theoretical model is tested on an effective sample of 188 Swedish SMEs. The results show that relationship-specific commitment mediates the effect of local sales concentration on new product development. The implication is that investments which enable collaboration in important business relationships are crucial requisites for keeping firms innovative and in pace with market fluctuations. The findings thus contribute to international business literature by showing that a local market scope of operations combined with a relationship orientation are beneficial for new product development in international SMEs.
A major contribution of the international entrepreneurship (IE) research field is that it has enhanced our understanding of the marketing challenges early internationalising firms face when they compete in constantly changing foreign markets. During the past decade, IE-research has, moreover, gone from focusing on the early internationalisation of firms to investigate the entrepreneurial processes of new business creation in foreign markets. However, ambiguity still exists regarding the level of analysis that ought to guide this new line of research. This article contributes by increasing our knowledge about the recent development in the international entrepreneurship research field by reviewing empirical studies performed between 2003 and 2011. The review focuses on the ontological perspectives used as well as the methods and theories that are adopted in the studies. Based on this review, the article contributes with a discussion about the evolution of the international entrepreneurship research field.
The aim of this study is to contribute to the international business field and research on the innovativeness of international SMEs, by addressing the following research question: To what extent and under which circumstances does relationship connectedness affect perceived innovativeness in international SMEs? To answer this question, the authors create a model that examines the mediating effects of two types of foreign business relationship strategies: relationship differentiation and relationship investments. In order to create this model, the authors draw upon behavioural internationalization process theory, network theory and research into SMEs. The findings reveal that relationship investments mediate the effect relationship connectedness has on perceived innovativeness. This study contributes to research about the innovativeness of international SMEs by showing that being connected to resources in the network is not, in itself, a guarantee of becoming or remaining innovative in foreign markets.
Trots att globalisering och digitalisering har gjort det enklare än någonsin tidigare att etablera sig internationellt, så innebär globala affärer fortfarande stora utmaningar och risker. Många viktiga internationaliseringsbeslut fattas ofta på basis av magkänsla eller personliga kontakter på specifika marknader. Även om detta kan fungera i enstaka fall visar forskning att avsaknaden av en robust strategi gör det svårt att åstadkomma positiva resultat i längden.
Denna bok utgår från tidlösa principer och forskningsresultat från svenska och internationella strategiforskare för att beskriva vilka faktorer som gör globala affärer mer eller mindre framgångsrika. Särskilt fokus läggs vid Dunningmodellen, ett beprövat forskningsbaserat strategiskt ramverk som kan tillämpas av moderna tillväxtföretag som verkar i en global ekonomi.
Dunningmodellens styrka är att den kan hjälpa alla typer av företag att utveckla balanserade insikter och strategier för globala affärer utifrån det enskilda företagets förutsättningar. Insikter och begrepp tydliggörs genom användandet av konkreta exempel från svenska företag från flera olika branscher, exempelvis Annas Pepparkakor, BabyBjörn, auktionshuset Bukowskis, techbolaget Tobii, samt tillväxtföretag inom bioteknik. Boken är skriven av forskare inom strategi och innovation vid Handelshögskolan i Stockholm och syftar till att sammanfatta relevant forskning och nya insikter på ett så praktiskt och lättillgängligt sätt som möjligt. Den är avsedd för alla som arbetar med olika former av globala affärer i strategiska, operativa, eller rådgivande roller.
Purpose – The purpose of this paper is to explore how market factors (pertaining to institutions, competition and resources) shape the international strategies of an online retailer. Design/methodology/approach – A single qualitative case study research design is employed to conduct in-depth analyses of a Swedish internationalising small- and medium-sized enterprise (SME) in the retail business. Findings – The findings show that online retailers can use partnerships to tackle industry dynamics and break into foreign markets. This type of “piggy-back internationalisation” can be an effective strategy of handling foreign market dynamics in the entry phase: that is to say, the short term. Reliance upon relationships, however, may paradoxically inhibit retailers’ abilities to stay competitive in the post-entry phase (i.e. the long term) since they become cut-off from the first-hand market learning. Research limitations/implications – The authors provide propositions based upon the findings to support further research in the international marketing and international retailing literature. Practical implications – The findings enhance the understanding of how electronic commerce affects SME internationalisation. They also generate new insights into the use of possible international expansion strategies for managers in retail SMEs. Originality/value – This study introduces a new theoretical perspective to build upon international retail research and contributes to the international retail literature with relevant insights into both advantages and disadvantages of using partnerships to overcome challenges related to international online retailing
This study explores which internationalisation modes Born Globals use in their initial and continued internationalisation. Based on Longitudinal data from eight biotechnology Born Globals, we divided the firms into three subsets: the low committers, which use tow commitment internationalisation modes in their initial and continued internationalisation; the incremental committers, which experience an increase from low to high commitment modes in their continued internationalisation; and the high committers, which use both low and high commitment internationalisation modes from inception. The critical difference amongst the three subsets is the speed at which these firms commit resources to foreign markets.
This study explores how a born global firm uses its network to learn during its internationalisation and how human capital influences this learning process. Within born global research, there exists a discrepancy between scholars who regard personal networks to be the most important for born globals' international growth and those who regard business networks as the most important. Based on a longitudinal in-depth case study of a born global within the Swedish biotech industry, our results show that both forms of networks are important but that a born global firm's use of its network differs at various phases in the firm's internationalisation.
The purpose of this chapter is to contribute to research in the field of international entrepreneurship by complementing existing levels of analysis with a network perspective that captures how the pursuit of international opportunities at the foreign market level unfolds through processes ingrained in the network structures that firms are embedded in. By performing a multilevel review of 50 studies within the international entrepreneurship research field, the chapter contributes with an analysis of the evolvement of the international entrepreneurship field between the years 1994 and 2010, a discussion of the field's current status and where it is going from here. The results of the review show that whereas early work in the field of international entrepreneurship is primarily concentrated on individual entrepreneurs or individual firms, network-level-focused studies dominate among the later publications. Studies that adopt explicit network approaches have the potential to contribute to international entrepreneurship research by being able to shed light on the actual mechanisms and processes by which foreign market opportunities are exploited.
The purpose of this article is to explore how mimetic pressures affect an internationalizing small- and medium-sized enterprise's adoption of e-commerce in the retail business, and by so doing generating insights into the different available responses to such pressures. A single, qualitative case study research design is employed to conduct an in-depth analysis of a retail SME. The data shows evidence of mimetic pressures that are perceived by the retailer. A trajectory of organizational responses to these pressures are identified by examining the changes that the investigated retailer made in its organization. By probing deeper into retail SMEs' decisions to use e-commerce as a vehicle for international growth, this article contributes to extending the understanding of how internationalizing retail SMEs can respond to mimetic pressures and adopt e-commerce strategies that provide a fit with their business models. One empirical case provides limited possibilities for generalization. Further studies that can enhance the understanding of retailers' various responses to mimetic pressures of e-commerce in different contexts are therefore suggested.
The purpose of this paper is to examine the impact of two kinds of experiential knowledge on the knowledge development and innovative product development (IPD) of internationalising small and medium-sized enterprises (SMEs). From this examination, six hypotheses are generated. The results of a linear structural relations (LISREL) analysis of 188 SMEs show that experiential knowledge - in the shape of relationship knowledge and network knowledge - has a direct effect on the knowledge development of internationalising SMEs and their foreign customers and an indirect effect on IPD. Resource-constrained SMEs, thus, use experiential knowledge acquired from foreign business relationships as a means to enable knowledge development, leading to innovative activities like IPD.
This study explores how different kinds of knowledge of founders and managers at Born Globals are related to the firms' discovery and exploitation of foreign market opportunities. Based on data from eight biotech Born Globals, we dichotomized Born Globals into two subsets: Born Industrials and Born Academics. The study shows that the founders' and managers' different combinations of technological and international knowledge impact the firms' proactive or reactive behavior in discovering foreign market opportunities. The results indicate that different kinds of Born Globals follow different internationalization processes and that Born Globals, therefore, should not be analyzed as a homogenous group, which has been the common perspective in previous research. (C) 2007 Elsevier Inc. All rights reserved.
This study investigates the potential effects of product flexibility and personal interaction on technology innovation in the realm of the foreign customer relationships of small and medium-sized enterprises (SMEs). The results of a linear structural relations (LISREL) analysis of 188 relationships between Swedish SMEs and their foreign customers demonstrate that SMEs' product flexibility stimulates personal interaction in foreign customer relationships, which in turn enhances the firms' technology innovation. The findings suggest that personal interaction reinforces a trusting relationship and, thereby, facilitates processes by which the knowledge of the involved parties is combined into new technological solutions. Hence, we conclude that product flexibility and personal interaction with foreign customers are important strategic factors for SMEs' technological innovation in foreign markets.
This study builds on two theoretical assumptions: (1) Because SMEs tend to internationalize fast on a wide global scale, their market selections do not seem to be dictated by distance measures. (2) Business relationships seem to be vital for these firms when acquiring knowledge and developing their ongoing businesses in foreign markets. Based on these assumptions, this study applies Linear Structural Relations (LISREL) analysis to investigate the relationships of 314 Swedish SMEs and their most important foreign customers. In specific, we investigate what potential effects relationship psychic distance has on SMEs’ knowledge transfer in ongoing foreign customer relationships. The results demonstrate, rather counter-intuitively, that relationship psychic distance actually enhances knowledge transfer in the investigated customer relationships.
This study investigates the potential effect of personal interaction on international technology development in relationships between Small and Medium Sized Enterprises (SMEs) and their foreign customers. The mediating effect of knowledge transfer between these firms and their customers is also examined. The results of a LISREL analysis of 188 relationships between SMEs and their foreign customers demonstrate that the effect of personal interaction on international technology development is not direct but rather is mediated by knowledge transfer. Hence, the study suggests that before international technology development can be enhanced, knowledge transfer needs to be established.
Small and medium-sized enterprises (SMEs) use of business networks has grown significantly during the last decades, partly due to increasingly complex innovation processes. This article investigates how different kinds of networks, depending on location, contextualize innovation in specific foreign market business relationships. Building on internationalization, network, and innovation research we develop a model that views opportunity connectedness in specific host-markets, home-markets, and other international markets as prerequisites to innovative collaboration and innovation outcomes in foreign business relationships. The resultsof ourlinear structural relations (LISREL) analysis of Swedish SMEs provide empirical evidence that the effect of opportunity connectedness on innovation outcomes in foreign business relationships is mediated by the level of innovative collaboration. These results indicate that SMEs need a relatively higher level of innovative collaboration in their partnerships with foreign market customers to convert opportunities conceived in home- and international- market networks into innovative outcomes in comparison to opportunities conceived in host-market networks. This finding implies that as opportunities become increasingly contextually remote, the importance of collaborative business relationships increases. By showing these results, the study contributes to research in the international small-business domain that seeks to identify important prerequisites of SME innovation.
There are two different types of firm online internationalization retailers, default, and active online retailers. Previous research has shown that it mostly is mangers who decide if firms participate in international markets as a default or an active online retailer. There are, however, a lack of previous studies about the development processes of international SMEs that move from being default into becoming active online retailers. Therefore, this paper studies this process by analyzing a case-study from the Swedish retail industry. The results imply that an international retail SMEs that wants to change from being a default into becoming an active online retailer needs to develop an online marketing capability. International retailing SMEs need an online marketing capability to develop the kinds of websites and business concepts that they need to support their internationalization journeys.
There are two different types of firm online internationalization retailers, default, and active online retailers. Previous research has implied that managers decide if a firm participates in international markets as a default or an active online retailer. However, there is a lack of previous studies about the development processes of international SMEs that move from default into becoming active online internationalization retailers. Therefore, this paper examines this process by analyzing a case study from the Swedish retail industry. More specifically, the aim of this paper is to narrowly study the process of how an international SME can transform from being a DOI into becoming an AOI retailer. The results imply that an international retail SME that wants to change from being a default into becoming an active online internationalization retailer needs to develop an online marketing capability. Internationalizing retailing SMEs need an online marketing capability to develop the online shops and business concepts they need to support their continuous internationalization journeys.
Structured Abstract
Purpose: To investigate, through a multidimensional approach, how an internationalizing e-tail SME cultivates certain capabilities that enhance its e-commerce and performance.
Design/methodology: The paper is based on longitudinal, single-case data from an internationalizing electronic retail (e-tail) SME in Sweden.
Findings: The findings imply that while capability development, in general, is important for e-tail SMEs, the development of digitalization and marketing capabilities have the most significant impact on overall performance for these kinds of retailers.
Originality: By extending knowledge about how three types of capabilities (internationalization capability, digitalization capability, and marketing capability) can be developed in tandem, this study contributes to international marketing research on how e-tail SMEs can work with capability development to boost their performance.
The aim of this paper is to shed light on the concept of strategic consensus and its development connected to digital transformation for firm internationalization. Based on one in-depth case study we show that strategic consensus develops over time among top managers. Once strategic consensus has been achieved among the top management team (TMT), the work to implement the strategic consensus among the other organization members remains. This paper sheds light on the importance of resource-commitment in achieving strategic consensus, especially connected to digital transformation and internationalization. Resource-commitment is necessary to convince and motivate organizational members to partake in digital transformation processes, which often will have strong implications for the continued internationalization of firms.
International e-commerce is a strong global trend pushed by a tail wind of bolstering economic policies, changing customer behaviors, and improved logistics and technologies. This study investigates the reasons for performance variations among international e-commerce SMEs. Building on the capabilities perspective and market orientation literature, a research model is developed and tested with linear regression and mediation analysis on an effective sample of 99 Swedish SMEs which use e-commerce as an international sales channel. Our study shows that online marketing capabilities are necessary but not sufficient to increase performance among these companies. Our results show that marketing ambidexterity, reflected by both market-driven and market-driving approaches, is instrumental to leverage the effect of online marketing capabilities. © 2021 The Authors
There is an urgent need in the field of international entrepreneurship to elucidate how SMEs can pursue new opportunities in a digital international business environment. The purpose of this study is to examine, by using effectuation theory, the processes by which retail SMEs develop international e-commerce in foreign markets. This research is based upon qualitative data from three Swedish retail-SMEs. This study makes a theoretical contribution to international entrepreneurship research by providing more granular insights into the actual drivers of e-commerce internationalisation. In particular, this study illustrates how capabilities underlie the processes of international e-commerce development.
In this study, we seek to answer the question: How do emerging market SMEs (ESMEs) use customers as a source of learning to develop a cycle of improved knowledge management capability in the early stage of their development? We base our research on the capability lifecycles perspective and learning literature from a customer’s perspective. Using a multiple case design with a sample of five SMEs from the Software-as-a-service (SaaS) industry in Vietnam, the study introduces a mechanism that we call ambidextrous international customer learning that can be used to provide an explanation for the heterogeneity in the exploitation and exploration behaviors displayed by the investigated case-firms. We find that ESMEs internationalize early to acquire knowledge and capabilities that help them fit into a global standard. Firms which connect their exploitative and explorative learning processes to strategic customers are more likely to develop dynamic capabilities and survive their first years. We aim to contribute to the capability lifecycles perspective with a mechanism to increase the understanding about how ESMEs can develop capabilities that can move from an ordinary level to a dynamic level.