Finnish cleantech companies’ implementation of GLOCAL to enter the Chinese market : - A case study of Finnish firms’ utilization of networks in the internationalization process

As a result of globalization and the rapidly changing market environment firms must be able to adapt to the changes it brings with it. Hence, there is a crucial need for an updated internationalization strategy. The parachuting Internationalization model integrates the Uppsala and the Born Global models to show that firms can reach success in the age of globalization if they are willing to execute creative strategies that help them overcome the challenges in a psychically distant environment. This study investigates how five Finnish cleantech firms have entered the Chinese market by implementing a GLOCAL approach, which the Parachuting internationalization strategy is based upon. The research focuses on how the firms have benefited from their networks within the internationalization process and what company characteristics have affected the entry mode. The multiple-case study research approach is used as the study’s research method. Qualitative interviews were used as a data collection method for the study. The results of the study show that the firms implemented a GLOCAL approach in different ways. Firms that entered the Chinese market in the 1990s had to a greater extent used a strategy resembling the Uppsala model, whereas firms that had more recently entered the market had more elements from the Born Global approach. However, all the case companies had utilized combinations of both models. Various kinds of networks had played a crucial role in the internationalization process and the case companies had particularly benefited from guanxi, the informal social network existing in China and from relationships created on the home market. The physical characteristics of the products had influenced the choice of entry mode. Companies that had standardized products strived to find suitable distributors and channel partners, whereas companies with a product adaptation strategy aimed to develop strong relationships with their customers