Globalisation of Small Businesses

I found the following paper titled 'Bed and Breakfasts, Small Inns, and the Internet: The Impact of Technology on the Globalization of Small Businesses'. I found the paper to be relevant to what I've been researching as it is a study of 'Small Businesses' and how the internet can help them grow and become global. (It is an exploratory study that examines how the Internet can help small and medium-sized enterprises (SMEs) attain a global market.)

Journal of International Marketing. 2000, Vol. 8 Issue 2, p86-97. 12p. 3 Charts.

Here are some key points from the paper:

Small inns and B&Bs are considered small businesses, which generally do not have strategies for internationalizing or dealing with foreign customers, and consequently, businesses theories of internationalization do not apply to them (Basu 1998). 

Although small businesses that use the Internet may have existed before the development of Web sites, they can nevertheless be considered global start-ups. 

The Internet, particularly the World Wide Web, is growing at a staggering rate. In 1994, the Web grew 1758% and continues to double in size every two to three months (Hoffman, Novak, and Chatterjee 1995).

A user survey of the World Wide Web conducted in 1997 among 10,000 Web users showed that the Internet is becoming increasingly important, as 84% of the respondents stated that e-mail and the Web have become "indispensable technologies" (Graphic, Visualization, and Usability Center 1997). In fact, 85% of the respondents reported that they use the Web on a daily basis. Many use the Web for personal shopping because of its convenience, the availability of vendor information, the absence of pressure sales, and its time-saving benefits. Finally, 49% reported that they found what they were looking for most of the time, whereas 22% did only half of the time.

The technology offers great possibilities. According to Berthon, Leyland, and Watson (1996), the Web enables firms to provide detailed product information, establish a presence in new markets, enhance their corporate image, encourage consumer involvement in developing their products, estab- lish interactivity with the consumer, and handle customer complaints and queries.

Some research has found that by using the Web, businesses can give customers more personalized service (Malhotra et al. 1994) and increased quality (Watson, Pitt, and Berthon 1996), whereas others believe it has led to the depersonalization of service and the failvue to deliver good-quality service.

Technological advancements can be a useful tool for the internationalization of small businesses without the costs associated with other media. Many researchers agree that the Internet is an efficient marketing and advertising medium (Alba et al. 1997; Hoffman and Novak 1996; Hoffrnan, Novak, and Chatterjee 1995).


Sarah McCue (1998) and her research team from the Michigan Small Business Development Center conducted a study of Internet marketing from the perspective of small businesses. Their study recruited 15 firms, helped them develop Web sites, and monitored their progress over the period of one year.

I find it interesting that at the start of the study, the firms which were new to the internet weren't convinced that it was going to work. They had a decrease in sales and were struggling to keep up the interest and maintain the site. Once the project was well on the way, many participants expressed their lack of time to maintain/market the site and many were finding it hard to link their websites up and get their visitor level up as well as getting their sites up on the search engines. They also found it hard to stand out from the large number of competition out there offering the same services as them.

When asked about the advantages and disadvantages of using the Internet in their business, many respondents (27.1%) reported that fewer costs in the long run were a definite advantage (n = 26). One respondent noticed many cost-related advantages: "no costly brochures, postage costs way down, new products or services advertised immediately, [and] clients like the home page flexibility in offering specials."

The respondents from small inns and B&Bs in our study liked the Web, because it is a relatively inexpensive form of marketing that can reach potential clients from around the world. However, as more and more firms start using the Internet, just having a Web page will no longer be a competitive advantage. Furthermore, Hapgood (1997) demonstrates that the Internet also makes it difficult for small, local firms to make their mark, because they must compete with businesses all over the world. 


I think that although this study shows some valid points, a small amount of time invested in learning the ins and outs of having an internet presence and the businesses would all benefit a huge amount in the long run. I think that the only reason businesses struggle online, whether it be with competition or just not knowing how their website is working, is because of lack of knowledge. People may argue they don't have the time to learn how to market themselves and get their visitor rate up but it would only take a small amount of time when you think about how beneficial it can be in the long run. It can save money, time and effort! Although larger businesses are always going to come first, smaller firms have to find a way to make their business shine through. I know that from a personal level, choosing a large business is sometimes easier because you know they are reliable and easier to access, but if a small business puts this across and makes themselves easily accessible online then I would be more likely to give them my business over a large company. I just think that being online can only be a good thing for people and can't see how it could possibly be a bad thing, especially using free websites/social networks.