Reverse Entrepreneurship in Latin America: Internationalization from Emerging Markets to Developed E

Introduction

Drawing from the concept of reverse entrepreneurship, a type of international new venture that originates in emerging markets to target more developed economies, this casebook brings together five cases of Latin America entrepreneurship. The purpose of the casebook is to develop entrepreneurial knowledge departing from local, relevant, up-to-date cases that inform a broader audience of business students, practitioners, and academics about the latest issues in the emerging Latin American international entrepreneurship.

Innovation and Reverse Entrepreneurship. Going from Latin America to Developed Markets Case Studies provides a suitable learning tool to spread the challenges and dilemmas faced by real-world entrepreneurs during the stages of ideation, development, and growth of business projects. These case studies differ from other works in that they focus on a character -generally a manager or an entrepreneur - who faces an international business dilemma and needs to take prompt and effective decisions under uncertainty and the complex business environments of Latin America.

Little academic research seems to be available to understand enterprise internationalization in Latin American economies (Felzensztein et al., 2015), leaving researchers with more unanswered questions about reverse internationalization dynamics and case studies closer to the Latin American reality. This casebook aims to provide a better understanding of enterprise internationalization from a Latin American perspective, which would have implications for academia in explaining useful cases for internationalization strategies that originate in the region. This is a region characterized by limited innovation capabilities (Lederman et al., 2014) and reverse internationalization innovative models set valuable examples for international enterprise entrepreneurship, particularly in instances related to the innovative solutions and business models. The case studies that are presented in this casebook explain companies that decided to go international in a variety of sectors, including agrifood, consumer manufacturing, information and communication technologies, and entertainment, introducing original insights on how internationalizing entrepreneurs in different industries, markets and countries tried original solutions for their business challenges.

The first case, by Pavel Reyes-Mercado, is named "Benotto bikes: lateral internationalization" and emphasizes the case of a Venezuelan company forced to re-position its branding strategy as a consequence of unpredictable market changes. The case pushes students to advise on business strategies based on Latin American business, political and social settings, emphasizing the challenges posed by a brand well positioned in past generations, but which offspring (millennials) demand a new type of branding strategy. This is the case of a family company that had to mobilize internal resources, people, ad strategy to gain traction in more competitive international markets.

The second case, titled "Entertaining and educating children around the world", by Argentina Soto, examines Kidzania, a successful kid's interactive entertainment Mexican brand, fully internationalized in Europe, Asia, Africa and Latin America. Despite its success, the firm still faces significant challenges reaching the US market, which profile demands a new strategy, with implication that encourage students to develop further analysis. This case also invites students to analyze internationalization alternatives, recognizing the importance of corporate governance in internationalizing family businesses. Legal, economic and cultural implications of each internationalization alternative are also considered from a financial perspective.

In the third case, "Reverse internationalization of wearable technology: shaping foreign market opportunities through innovativeness, learning and networking", Guillermo Larios presents a reverse innovation and entrepreneurship case, where learning and networking become instrumental in gaining international traction. This is the case of Ironbit, a Mexican information and communications technology company that after years of internationalization intents, decides to spinoff a wearable bracelet conceived for global markets. The case showcases the firm's struggles to determine the appropriate business model to position its bracelets in competitive international markets. Context and relevant issues related to the internationalization are discussed, which give students enough material to analyze alternative business models as part of the company's global strategy, and provides them with a learning experience about different reverse internationalization strategies.

The fourth case, titled "The rise and fall of an international new venture: The case of an online medical tourism platform in Colombia", by Sascha Fuerst, shows the multiple complexities of creating a business in two countries concurrently, developing and developed, which add to the challenges related to risks involved in an emerging industry like health-care tourism. Though innovative in nature, the case leads students to recognize the internal and external factors ultimately leading to the failure of the envisioned business, and invites students to analyze business model alternatives over a rather static business plan. Students will acknowledge in this case the importance of social interactions, risk management strategies in an innovative industry, and cultural understanding in international entrepreneurship.

The last case presented by Guillermo Zamacona is named "An innovative way of conducting commercial ties with suppliers with the purpose of providing standardized products within a complex supply chain process and an unstable sector". This case emphasizes difficulties that the international entrepreneur needs to face when the local supply chain is characterized by unpredictable quality and quantity. Through this case students are encouraged to seek new business models that recognize the challenges associated to the agricultural sector in Mexico. The case also allows students to assess internationalization issues related to decision-making, business process complexity, logistics and supply chain, negotiation and social relations.

References

Felzensztein, C., Ciravegna, L., Robson, P. and Amorós, J.E. (2015), "Networks, Entrepreneurial Orientation, and Internationalization Scope: Evidence from Chilean Small and Medium Enterprises", Journal of Small Business Management, Vol. 53 pp. 145-60.

Lederman, D., Messina, J., Pienknagura, S. and Rigolini, J. (2014), "Latin American Entrepreneurs : Many Firms but Little Innovation", available at https://openknowledge.worldbank.org/handle/10986/16457 (accessed 15 September 2016).

Case 1

Title

An innovative way of conducting commercial ties with suppliers with the purpose of providing standardized products within a complex supply chain process and an unstable sector.

Standardized products and volume produced in an unstable agricultural context. Innovation in the agricultural business culture by providing modern and efficient processes.

Case overview

The southern region of the State of Mexico is characterized by having great agricultural potential; however, obsolete practices encourage the producers to sell their products to intermediaries who keep the profits. These obsolete practices, besides stimulating unsustainable and unethical relationships, delivers products with an unpredictable quality and quantity and constrains producers from modernizing their practices, generating standardized productions and selling their products under better conditions. Mexican entrepreneurs, despite knowing the obstacles related to this non-modern practice, continue investing in this sector. Mexico's Healthy Food, a new fruit and vegetable company, presents one of its biggest crises before the possibility of losing customers due to the consequences generated by the problems with its suppliers, such as the ones described earlier.  With this challenge in front, Karen, its Commercial Manager, has to decide between finding providers in a different region, creating a more solid commercial program with the agricultures, conducting an investigation to know the characteristics of each supplier or creating a new business model that could consolidate their commercial relationships. Costs, training techniques, schedules, cultural features, supply chain analysis, market investigation and negotiation models were only a few of the constituencies that Karen had to analyze before making a decision.

Business / social implications

A new business model in this sector, and under this context, is fundamental for the planning and timing of the clients' orders. Delivering products with the quality and efficiency that the big companies demand require agricultural entrepreneurs to find new ways of making businesses with farmers. This project has an important connotation to the company in order to consolidate their business in the Mexican, North American, Canadian and European markets and to concrete their plans to reach new markets such as China. Also, it is important to find new models that change the living conditions of the Mexican producers and empower them in the negotiation of their products: sustainability is no longer a "nice to have" feature, is a "must have" business practice.

Keywords

Training, new business model, processes, logistic and supply chain.

Author's name

Zamacona Aboumrad, Guillermo González Flores, Adriana

E-mail

guillermo.zamaconaa@anahuac.mx

Affiliation

Institution : Universidad Anáhuac México

Address : Av. Universidad Anáhuac 46. Col. Lomas Anáhuac.

City : México

State : México

Post code : 52786

Country : Mexico

Case 2

Title

The rise and fall of an international new venture: The case of an online medical tourism platform in Colombia.

Case overview

Thomas, a German national, moves to the city of Medellin/Colombia after working for several years for multinationals in Germany, England, and the US. In Medellin he starts to build an online medical tourism platform. Medical tourism is an emerging business in the country and one of the strategic clusters promoted by the city of Medellin. The idea emerges to provide medical procedures for patients from the US in hospitals and clinics in Colombia and later on all over Latin America. The entrepreneur faces two challenges: Getting medical service providers from Colombia onto his platform and motivate clients in the US to make use of the service. Therefore, Thomas rapidly needs to gain the trust of medical service providers in Colombia and obtain relevant insights into the health-care industries in both countries. Social interactions spur the development of relevant networks and knowledge and continuously require to adapt the emerging business model to the new insights gained. Thomas faces various hurdles in order to fully realize the envisioned business idea. The main hurdle relates to the seeming unwillingness on behalf of the Colombian service providers to internationalize their service offer. Thomas eventually puts the development of the business on hold.

Business / social implications

Starting a business in a culturally unfamiliar environment and as an industry outsider is challenging.

Acting as a pioneer in an emerging industry both bears potential but also great risks.

The identification and realization of business opportunities are shaped by social interactions.

Keywords

International new venture, start-up, failure, business model, Colombia, Latin America

Author's name

Sascha Fuerst

E-mail

sfuerst@eafit.edu.co

Affiliation

Institution : Universidad EAFIT

Address : Carrera 49 No. 7 Sur 50

City : Medellin

State : Antioquia

Post code : 050021

Country : Colombia

Case 3

Title

Reverse internationalization of wearable technology: shaping foreign market opportunities through innovativeness, learning and networking.

Case overview

IronBit is a Mexican information and communications technology company with around 12 years of experience in the development of mobile, cloud and IoT solutions. Since its incorporation, the former startup has struggled to gain exposure in international markets, which has resulted into relevant learning and networking. In 2015, IronBit launched Bitbrick Band, a wearable bracelet that communicates users' health data and commands to a smartphone. Bitbrick Band is probably IronBit's first spinoff conceived for global markets. After showcasing the bracelet in a variety of international tradeshows, IronBit has been able to confirm market interest. However, IronBit still needs to determine the appropriate business model to position its bracelets in competitive international markets, considering a clear understanding of the potential clients, value proposition, channels, key partners and resources. Context and relevant issues related to the internationalization of Bitbrick Band are discussed, which give students enough material to consider alternative business models as part of the company's global strategy.

Business / social implications

This case study has implications for the business startup community in developing economies, as it shows alternative paths to internationalization.

Keywords

Wearables, reverse entrepreneurship, internationalization, business model

Author's name

Guillermo J. Larios-Hernandez

E-mail

guillermo.lariosh@anahuac.mx

Affiliation

Institution : Universidad Anahuac Mexico

Address : Av. Universidad Anáhuac 46

City : Huixquilucan

State : Mexico

Post code : 52786

Country : Mexico

Case 4

Title

Entertaining and educating children around the world

Case overview

In 1999 a young entrepreneur tests his new idea called kids' city in Mexico City. This first year of operations was very successful, attracting 800,000 visitors. Then he waits until 2006 to open a second site in Monterrey and the first international location, Tokyo. Unlike the wholly owned and privately held Mexican locations, Tokyo is the beginning of franchising the activities of the company which drives an explosive international growth. Currently, the company is in Europe (Portugal and United Kingdom), Asian (United Arab Emirates, Kuwait, Saudi Arabia, Russia, India, Thailand, Indonesia, Malaysian, Philippines and South Korea), America (Brazil and Chili) and Africa (Egypt). So far, some 10 million children have visited their locations. Since the beginning of the story, the main objective of the founder is to arrive in United States. US market presents specifics differences and the strategy and his implication must be evaluated to continue growing.

Business / social implications

Legal, economic and cultural implications of each internationalization alternative have a significant impact on business financial development. In addition to the difficulty of evaluating each alternative in family business decision making tends to be centralized. In this context, the existence and optimal operation of corporate governance is fundamental.

Keywords

Family business direction; Internationalization; Corporate governance

Author's name

Argentina  Soto

E-mail

argentina.soto@anahuac.mx

Affiliation

Institution : Universidad Anáhuac México

Address : Av. Universidad Anáhuac No. 46

City : Huixquilucan

State : Estado de México

Post code : 52786

Country : Mexico

Case 5

Title

Benotto bikes: Lateral internacionalization

Case overview

The case analyzes a family company which first started operations in Venezuela to then find its way through other Latin American countries. The case describes the institutionalization process that mobilized internal resources, people, ad strategy to gain traction in the new markets. While Benotto was able to gain higher market shares, they also increased their bikes portfolio to more than 200 products, ranging from budget bike to more sophisticated Brompton-like products. Aside from the product portfolio, the number of competitors increased in all markets. These factors along with unpredictable economic scenarios have pose a threath to Benotto's survival. The case aims to push students propose business strategies based on Latin American settings as a tool to re-position the brand in milleniials' mind since the previously had gained a lot of awareness and is well remembered by any millenial's father.

Business / social implications

This case has implication for many companies in emerging markets since such markets are prone to turbulence and chaotic policy making. The previous ins a inherent threat to new and existing business in the area.

Keywords

Re-positioning; branding; emergin market; internationalization.

Author's name

Jesús Berumen and Pável Reyes-Mercado

E-mail

Jesus.berumen@anahuac.mx

Affiliation

Institution : Anahuac University Mexico

Address : Av. Universidad Anáhuac 46, Col. Lomas Anáhuac

City : Huixquilucan

State : Mexico

Post code : 52786

Country : Mexico