Business networks and their impact on international marketing capability: a case study of a telecommunications joint action group

Abstract

The goal of this study is to understand the way in which business networks impact upon the international marketing capabilities of New Zealand firms. It focuses on a Joint Action Group of Telecommunications firms, known as TENZ. TENZ is a soft network with a defined structure, a type of network little described in the international marketing literature. This study is focused on answering four research questions: 1. What part do JAGs play in the development of capability of New Zealand companies to market their products and services internationally? 2. Are there any differences between the benefits received from JAGs and those from other business networks? 3. What are the dynamics between hard and soft networks within and outside of the JAGs and what part does the JAG play in this process? 4. What are the dynamics within the JAGs that contribute to the success of the group as a whole and to the success of individual businesses? An embedded case method was used, with TENZ as the primary unit of study and the firms within TENZ as the sub-units. The C.E.O.s of eight TENZ firms were interviewed regarding their participation in TENZ and other business networks and the benefits received from that participation. Interviews were recorded and transcribed and the data was then analysed using word tables. This study found that JAGs and other business networks play an important role in building international marketing capability of New Zealand firms. This is achieved through a mixture of tangible and intangible factors including inspiration, support, augmentation of resources and enhanced ability to cope with environmental pressures. The relationships in TENZ were found to be stronger in general than the relationships that companies had outside of TENZ, with a comparatively higher level of intangible benefits emerging. Soft and hard business networks were found to influence each other's development. In particular, having a strong soft network means that the relationships will be more open and trusting should a hard network emerge. TENZ was also influential in preserving a soft network when hard networks came to an end. A strong focus, clear leadership and realistic expectations of group members were found to be very important in the success of a group such as TENZ as perceived by its members. The findings of this study have several implications for management, government policy and the international marketing literature. Soft networks are important in and of themselves, regardless of whether hard networks emerge. They are influential in the circulation of information and in changing the mindsets of C.E.O.s through inspiration, support and advice. This thesis provides a basis for a type of network that is a hybrid between the soft, evolutionary networks in the IMP literature and the hard structured networks in the resource-dependent literature. It also describes the consequences, both positive and negative of catalysing business networks rather than allowing them to evolve naturally.