Internationalization strategies and entry modes of multinazionali tascabili. The case of Facco S.p.A. in Argentina and Brazil.

A recent phenomenon characterizing the current development of the Italian entrepreneurial tissue is represented by the rise and expansion of multinazionali tascabili. In spite of the great contribution that this group of companies provides to the development of the Italian economy, scarce studies about their internationalization process have been carried out up until now. Multinazionali tascabili’s modus operandi is characterized by high attention to quality and customer care, and the Made in Italy labelling represents one important source of their competitive advantage. These factors might have an impact on the entry mode and internationalization path that multinazionali tascabili tend to choose in order to enter foreign markets. The aim of this thesis is to explore through a case study approach based on the experience of Facco S.p.A. which paths of internationalization are followed by multinazionali tascabili. With a focus on the Argentinian and Brazilian market, the research examines whether the main internationalization models suggested by the literature have been applied. To study how multinazionali tascabili approach Argentina and Brazil, the country specific barriers have been examined, as well as the potential ways to overpass them, that mainly reside in the chosen entry mode. The research highlights that the main obstacles in the development of trade relationships with Argentina lie on import restrictions in the shape of bureaucratic and technical requirements, while in the case of Brazil tariff barriers are often too high to enable international trade. When tariff barriers are excessively high, a company might opt for an intensively resource-committing entry mode – as a cross-border acquisition – even though it possesses scarce knowledge about the foreign market. Acquiring an already established business in the target market could allow to both defeat the liability of foreigness mentioned in the network approach, and act as a substitute for the level of foreign market knowledge that the Uppsala model defines as crucial to determine the degree of a company’s international commitment. This is found to be true above all if the management of the acquired company is still involved in the business after its acquisition.