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H1.2: Managerial resources are positively related to company’s export performance.
2.3.3. Network Assets
Johanson and Mattsson (1993) define international business as the “process of developing networks of business relationships in other countries. Johanson and Vahlne (1990) emphasize the importance of network resources that is relationships to others like customers, suppliers, competitors and etc. on the export performance. Anderson (1995)
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found that networks can positively affect a firms’ degree export performance. Filatotchev, Liu, Buck and Wright (2009) found out that export performance has close relationship with founder's global networks. In this research we select three network assets, they are: Export Customer Orientation (ECO), Ability to Monitor Competitors (AMC), Being a Member of Business group or alliance (BMB). Export Customer Orientation is the set of beliefs in export that says that customer needs and satisfaction are the priority of an organization (Wikipedia, 2010). In general, this view indicates that market orientation has a positive linear relationship with business success. For example Miocevic and Crnjak-Karanovic (2009) conducted a psychometric analysis of export market orientation of Croatian SME exporters, and their results clearly indicate the necessity of pursuing export market orientation in order to achieve a high level of export performance. As a final word we argue just like Ogbeuhi and Longfellow (1994) that export market failure often results from poor market analysis, absence of product market match, ineffective distribution and lack of management planning which can be cured by customer orientation approach. Ability to monitor competitors is one of the distinguishing Manager’s capability by which they understand competition and act accordingly. From the domestic competition point of view, many studies have suggested that there is a positive relationship between intense domestic market competition and greater international involvement (Reid, 1984; Sullivan and Bauerschmidt, 1988; Jaffe and Pasternak, 1994 and etc.) so as to escape from the threat of intensified competition at home. Also fierce competition and/or aggressive competitors in export market negatively affect export intention and export performance (Cardoso, 1980; Fluery, 1986, Hasan, 1998). Business Group is typically a cluster of legally distinct firms with a managerial relationship (Khanna & Yafeh, 2005). Gemser, Maryse and Sorge (2004) findings provide support for the notion that being a member of business group may provide an opportunity for companies to share each other’s resources, which increases the exporting. Also, SMEs could attain legitimacy and reputation by joining to a business group, which facilitates SMEs entry into foreign markets (Khanna and Rivkin, 2001). According to above discussions about network resources we may hypothesise H1.3 and under the logic of parsimony we may further hypothesise H1.4;
H1.3: Network resources are positively related to company’s export performance.
H1.4: Combination of intangible resources make more contribution than the individual intangible resources on export performance.
2.4. Competitive Export Strategies
Madsen (1994) argued that export marketing strategy is the most important explanatory variable in relation to overall export performance. Shoham et al. (2002) and Thirkell and Dau (1998) also provide additional support for the importance of export marketing strategy on export performance. Strategy researches in export literature are generally limited to entry modes. However competitive strategy is more than selection of suitable entry modes; it shows how a firm competes. When we fix the entry mode with exporting one must say additional strategies that allow the firm to compete effectively with its competitors. Porter's Generic Competitive Strategies are the basis for much of modern business strategy and generally the proposed strategies in the literature are a version of Porter’s generic business strategies. Chaganti, Chaganti and Mahajan (1989) supported the contention that Porter's framework also applies to small businesses. By following Faulkner and Bowman (1992), in this paper we condensed Michael Porter's four generic strategies into two - low cost leadership and differentiation. In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. Some of the exporting strategies that fall in cost strategy are as follows: competitive pricing (Namiki,1988), global strategy where firms utilize standardized products, processes, and marketing approaches that seek to exploit efficiency (Bartlett and Ghoshal, 1987), enhancing competitiveness through changes in the price and quality of the product Kalantaridis (2004). In a differentiation strategy a firm seeks to be unique in its industry along some dimensions which are widely valued by buyers and perceived to be better or different from the competition. It is rewarded for its uniqueness with a premium price (Porter, 1980), this strategy can allow small firms to minimize harmful interaction with competitors, giving rise to export performance. Man and Wafa (2009) found a significant relationship between differentiation strategy type and export performance of SMEs. Vargas and Tagle Rangel (2007) found that SMEs whose explicit business strategy emphasizes innovation and knowledge creation which are the basis for differentiation strategy have been able to successfully participate in global contexts. Chetty, et al. (2003) find out that in five of the six firms, the development of a product innovation with global potential was the spur to the firm's rapid globalisation. So, we hypothesise that;
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