Toward a process theory of international business opportunity identification: a perspective from small-to-medium enterprises

Much research has suggested that opportunity recognition is paramount to the success of internationally sourced entrepreneurial activities in foreign markets. While the majority of studies are variable-based, cross-sectional research that investigates the influencing factors to international business (IB) opportunity identification, little attention has been given to understanding the evolving process of IB opportunity identification by small-to-medium enterprises (SMEs). This research aims to fill this important knowledge gap. Four case studies are conducted with Australian SMEs entering emerging and established markets. Four stages are identified in the process of IB opportunity identification by SMEs, each of which is characterized by different activities. The finding does not show a major impact of market conditions in either emerging and established markets on how SMEs recognize IB opportunities. This indicates that company characteristics play a more important role in shaping the process of IB opportunity identification.