Strategic Orientations for the International Success of Startups

In the current business environment, simply creating a competitive advantage is not enough, as its long-term sustainability must be assured.To this end, companies should follow a set of behaviors known as strategic orientations, the most important of which are:

• Entrepreneurial orientation: pushes companies to continuously innovate their products and beat the competition in launching them on the market
• Market orientation: makes it possible to focus on customer satisfaction and keep an eye on the competition’s actions
• Learning orientation: promotes the creation of a culture of learning in organizations

We know how important these three strategic orientations are, but have little knowledge of the interaction between them or their relevance over time, let alone their centrality for startups that channel their growth towards international markets. A study* we conducted recently found that learning and entrepreneurial orientation are essential to ensure the sustained competitiveness of startups in an international context. However, the relevance of market orientation diminishes in the long term. After a period of 10 years and their first entry into international markets, startups manage to become more mature companies. The question that arises then is: how can a startup maintain its competitive advantage in international markets in the long term?

Don't use customers and the competition as your guide

As our study suggests, product innovation and getting ahead of the competition are insufficient if these actions are not accompanied by a culture of learning that allows firms to constantly learn and unlearn from their own innovations. Entrepreneurial orientation and learning orientation are necessary to ensure the long-term success of a startup. In contrast, constantly watching  over customer satisfaction and needs, and monitoring competitors (market orientation), has a negative effect in the long-term on international performance. This means that investing in market intelligence cannot be justified over time for startups with an international focus.

The importance of a culture of learning and a shared vision

In conclusion, entrepreneurs interested in creating a growth-oriented startup in international markets must continually invest in the generation of new knowledge. This can be accomplished by creating a culture of learning, unlearning existing mental models, and creating a shared vision.

For a startup to maintain its international competitive advantage over time, it must focus more on exploring new international opportunities than on exploiting its current products. Moreover, concentrating on continuous product innovation is more important than investing in the generation of market intelligence. In other words, learning from the firm’s own experience seems to be more effective in the long run than learning from its customers and competitors.

* The study was conducted by the researchers Diana Marcela Escandon-Barbosa (Pontificia Universidad Javeriana Cali, Colombia) and Sascha Fürst (EGADE Business School - Tecnológico de Monterrey, Zapopan, México) and presented at the 2021 CERALE-EGADE Business School Colloquium.

Article originally published in El Empresario.