The Internationalization of a Small Firm - The Mechbadger Case

This dissertation deals with the question of the internationalization of the Italian and European SMEs with a focus on the micro and family-owned ones. The aim of the research is to answer the question about which internationalization strategies should be pursued by these firms. To do so, after a preliminary analysis of the different entry methods for the internationalization of firms, we perform a deep analysis of a start-up firm (Mechbadger) that needs to internationalize to make its business profitable. This analysis shows one characteristic in common with many Italian and European firms: it is an owner-run micro-LLC firm. We analyzed its target markets and financial capabilities to assess the feasibility in the short and long run of several internationalization strategies.
These involve not only internationalization by exporting, but also by FDIs or offshoring for either the sales or the delocalization of the production. As main references we used the company’s business plan, market analyses and pre-feasibility studies. Furthermore, several information on the international strategies and markets were collected through the websites of international organizations (such as the WTO), academic papers and textbooks, and non-academic articles in online encyclopedias (Investopedia), geopolitics think-tanks (ISPI), or consulting companies (Ernst & Young). The research highlighted that is crucial for SMEs, and even micro firms (like Mechbadger), to internationalize through “aggressive” strategies, such as joint ventures and offshoring, for both the production and the sales of the products. For micro firms, FDIs are not the best choice because too complex and costly. More-in-depth studies would make clear if this is valid only for micro firms, like Mechbadger, or whether it may be valid also for larger SMEs.