6.5 European SME Internationalisation

The Observatory of European SMEs, which was established by the EC on December 1992, improves the monitoring of the economic performance of SMEs in Europe and provides information on SMEs on national end European level, covering 30 countries (27 EU countries, plus Iceland, Norway, and Turkey). In 2004 the Observatory of European SMEs published a report1 on Internationalisation (a very informative report to gain insight into the European market) of SMEs, whereby it was reported that foreign supply relationships were seen as the most common form of internationalisation in Europe (30% of European SMEs), with exporting coming second (exports were more frequent in combination with a foreign supplier ? 10% reported to follow this method). The most frequent motive, as reported, was access to know-how and technology, whereby 48% of the SMEs reported that their exports were directed towards that purpose (if not completely, at least partly). Lastly, another important finding was the fact that smaller countries, with small markets are more internationalized, hence the size of the country is one of the main factors in internationalisation, as SMEs operating in small markets need to expand their clientele.

Best Practices - Successful European SMEs

Opera Software S.A.
Opera Software S.A. forms a best practice case for SME internationalisation. The firm was established in 1995 in Norway. The idea originated from a research project which was carried out by Norway?s telecom company, Telenor, in 1994 which later on became an independent company, since Telenor decided that they would not further pursue the project of the internet browser. Nonetheless, the founders of the company who supported the idea and believed in the creation of such software, were offered permission to continue the project and keep up the research and they were even provided with offices and consulting services by Telenor. The result was the creation of the Opera web browser in 1996. What is remarkable about Opera Software S.A. is that they do hardly any sales in Norway but they managed to have an export share of 99-100%, due to the fact that they are selling their products all over the world, hence they have a strong presence in the international market and distribute their products on the internet.2

The company used various market entry modes, with regards to their internationalisation strategy. Up until recently, the firm had not invested a considerable amount of funds on advertising campaigns to promote their software, but they did use their web page to distribute their products and exported their software through the distribution of CD?s on magazines and a number of resellers.3 The firm has also pursued very clever collaborations with multinationals - such as IBM, Sony Erricsson, Psion etc. - through licensing and they have also managed to establish two subsidiaries in the United States and in Sweden.4

Archetypon S.A.
Archetypon S.A. is a service company with an international footprint. It operates in the sectors of Information and Communication Technology and Language. The company was founded in 1988 and ever since it has developed a wide customer base, serving multinational companies like Microsoft, IBM and European Institutions. Over the years it has become an international leader in Software Globalisation and Multi-Language translation and it is also well known for its development of high-end integrated e-government software systems.

Archetypon S.A. forms a good case study for internationalisation as it managed to survive the Greek recession of 2002 by utilising its investment in research, development and training and hence its stock of knowledge, which provided the firm with insight into an opportunity to switch its services to translation and hence a new product. Their adoption of new services did not only "save" the firm from the forthcoming disaster but it also ensured their ongoing profit.5

Svalson AB 6
Svalson AB was founded in 1979 by Mr. Bill Svenson. The company produces electrically driven sliding windows, window doors, display stands, cash turntables and slider trays and serves customers such as hospitals, government agencies, hotels, restaurants and so on. In 1995 Svalson AB created its own website in three language versions (Swedish, English and Dutch), which proved to be a cheap and quick communication tool, due to the fact that it helped the company promote its products to an international level. The company now exports around 40% of its products abroad but it has not yet created a subsidiary abroad, though they are planning to do so in the future. The only barriers reported by Svalson AB are language and cultural difficulties and also market and insufficient knowledge risks. Nonetheless, the company is growing year by year, not only through its revenues, but also as far as staff is concerned.

1 Internationalisation of SMEs, European Communities, Luxemburg 2004.
2 Siv Marina Flø Karlsen (2007), The Born Global - Redefined. On the Determinants of SMEs Pace of Internationalization, BI Norwegian School of Management.
3 Jo Håvard Borsheim & Carl Arthur Solberg, The internationalization of born global internet firms, Norwegian School of Management, 2004.
4 Ibid.
5 Voudouris, I. and Dimitratos, P. (forthcoming) - Growth of Archetypon S.A.: exploitation of opportunities at Greek and European marketplaces.
6 The internet and SMEs  internationalisation - Case Studies of Swedish Manufacturing SMEs, Lu Liu Shuag Li, 2004.