Case Studies in Knowledge Intensive Entrepreneurship
Edited by Maureen McKelvey and Astrid Heidemann Lassen
Chapter 5: Managing international expansion in a KIE venture: going global in Alpha Composites
In 2009, Alpha Composites, a small innovative European company specializing in glass fibre composite materials, announced a start-up of a new production unit in China. This was a big decision for Alpha’s Chief Executive Officer (CEO), whose parents had established the company together 30 years earlier. Despite having sales internationally almost from the inception of the venture, Alpha developed, produced and supplied composite profiles only from their home base in Europe. Now, all of that was about to change as the company was entering a new stage in its international development by changing its operations configuration and establishing its base in China. On the one hand, the decision seemed like a no-brainer. While many other countries fell into an economic coma after the recession struck in 2008, China continued to grow at a double-digit rate, proving the country’s potential to be the world’s growth engine in terms of output and consumption. On the other hand, the business environment in developing countries, China among them, was still very demanding, both in terms of market entry and day-to-day management. Many CEOs of Western companies were losing sleep over partners’ predatory behaviour, com- petition from cut-price copycats of their own products and bewildering and arbitrary legislation. Dealing with these caveats would be difficult even for large companies that had operated internationally for decades. Alpha had not. Moreover, as a small- and medium-sized enterprise (SME), it had rather scarce managerial resources for developing and implementing an effective strategy for the start-up in China,
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