INTERNATIONAL SURVIVAL AND STRATEGIC RENEWAL THROUGH DISRUPT PATH DEPENDENCE

Rossato, Gabrielle Damo; Floriani, Dinorá Eliete; Amal, Mohamed

doi:10.1590/1413-2311.372.118083

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Article • REAd. Rev. eletrôn. adm. (Porto Alegre) 29 (01) • Jan-Apr 2023 • https://doi.org/10.1590/1413-2311.372.118083 linkcopy

INTERNATIONAL SURVIVAL AND STRATEGIC RENEWAL THROUGH DISRUPT PATH DEPENDENCE

A SOBREVIVÊNCIA INTERNACIONAL E A RENOVAÇÃO ESTRATÉGICA POR MEIO DO ROMPIMENTO DA DEPENDÊNCIA DE TRAJETÓRIA

SUPERVIVENCIA INTERNACIONAL Y RENOVACIÓN ESTRATÉGICA A TRAVÉS DE LA DISRUPCIÓN DE LA DEPENDENCIA DEL CAMINO

Authorship SCIMAGO INSTITUTIONS RANKINGS

The aim of the present article is to analyze how firms can strategically renew themselves and disrupt their path dependence to survive in international markets, despite the influence of path dependence. Using a qualitative methodology, this study has adopted a single-case design, based on semi-structured interviews with employees involved in the path of an emerging market firm. Through a historic and process-driven analysis it was possible to use realtime and retrospective data. The paper leads to the start of debates about path dependence transition. It also presents the relationship between international survival, strategic renewal and path dependence disruption.

Keywords:
Path dependence; Disruption; Strategic renewal; Emerging market; International survival.

Interviewee	Current position	Data and Duration	Quotes
Founder and CEO	Founded Carmen Steffens in 1993. Was part of the opening of franchises in the domestic Market and after, of the internationalization of the firm. Works as CEO	May/2019 0:50	“It took me 2 and a half years to open the factory effectively in 1993.” “After Paraguay it became a dream of ours to go to other countries.”
Responsible for international expansion	Responsible for the international expansion of Carmen Steffens since 2013.	March/2019 0:40	“Mexico, Guatemala, Colombia, Panamá, Aruba, and the Caribbean after my entrance.”
Director of marketing and e-commerce	In 2001 founded the firm’s marketing department; also worked in the international expansion. Is the current director of marketing and e-commerce.	December/2018 0:40	“I founded the marketing department of the firm in 2001 and after that I have worked in innumerous sectors inside the company, including retail supervision and training of new salesman that entered the group. After that I took over firm’s international marketing and all the franchise expansion until the company reached 16 countries.”
First international franchisee	In 2002 it became the first international franchisee of Carmen Steffens, opening the first store in Asunción, Paraguay. Today, it is the Franchisee in both Paraguay and Argentina.	February/2019 2:00	“I represent Carmen Steffens for almost 20 years [...] it was very small and didn’t have anything abroad.”

Analytical categories	Definition	Authors	Examples of interview questions
Path dependence	Path dependence is related to the company's knowledge. When new learning and skills are developed, path dependence can be disrupted.	Garud, Kumaraswamy and Karnøe (2010); Leten, Belderbos and Looy (2016).	Before working at the company, what was your professional experience? Regarding the foundation of the company and the beginning of activities: comment the company's history. What was the internationalization process like?
Strategic renewal	Strategic Renewal, driven by exploration and exploitation capabilities, implies the transformation of the company's trajectory, i.e., from the disruption of path-dependence.	Volberda, Baden-Fuller and Van Den Bosch (2001); Riviere and Suder (2016); Riviere, Suder and Bass (2018); Schmitt, Raisch and Volberda (2018).
Exploration capability	Exploration capability allows for the firm to identify and learn from changes in the international market.	March (1991); Prange and Verdier (2011); Prange (2012).	Has the company implemented any production processes? Which? How? New products have been developed due to internationalization? Why? Has the company implemented any new strategies due to internationalization?
Exploitation capability	Exploitation capability allows for the firm to develop new knowledge, transforming its production process, product, capabilities, or management.	March (1991); Prange and Verdier (2011); Prange (2012).	Were there improvements in the production process, product or management in the company after internationalization? Have national employees and franchisees been trained due to internationalization? Can you describe how it happened? Has a procedure been carried out to solve production problems? How? Does the company's management often share its information with national and international franchisees? Comment.
Long-term survival	Long-term survival entices performance, number of served markets and time abroad.	Authors’ analysis.

Categories of analysis	Evidences
Path Dependence	“Know how comes from Couroquímica, our tannery, totally cutting edge today.” - DirectorMrkEcom. “Brazil is a great nation, so when you succeed in national retail [...] the firm was already very well prepared for the international market.” - DirectorMrkEcom. “The Director accepted the meeting because it was with us, we came from Paraguay and wanted to know the brand.” - FrancParag. “Through Paraguay it became a dream of ours to go to other countries.” - CEO. “In 25 years of CS we must have closed 50 stores in places we shouldn’t even have opened.”
Strategic Renewal	“They focused on shoes and outsourced handbags [..] they were ugly. [...] I started buying abroad, from other brands [...] showed them to the Director [...] in the next collection I already saw handbags in the same stile.” - FrancParag. “There were people who came to Brazil, loved the brand and wanted to open. This was the step we had to eliminate from our lives.” - CEO. “Today when we enter a country we never hand it over to a franchisee in the beginning, we always stay at least 2 years with our own store.” - CEO. “Either we go in right or we don’t even go in.” - CEO.
Exploration Capacity	“I didn’t think only about Brazil anymore [...] everything was discussed in the committees [...] franchisees have close contact with the clients.” - FracParag. “Regarding CS’s products, before they were only shoes, then handbags, and now clothes too, the clients were the ones who showed an interest.” - InternExpan. The great evolution of the firm occurred together with internationalization. We started working markets more competitive than Brazil, having to really improve the quality of our products throughout the years, production equipment for the factory.” - InternExpan. “We look at what’s happening in the world.- InternExpan.
Exploitation Capacity	“Regarding CS’s products, before they were only shoes, then handbags, and now clothes too [...].” - InternExpan. “We also hired some professionals from the market [...] they came to be part of our team after internationalization.” - InternExpan. “We invested a lot in technology, our factory is totally flexible.” - CEO.
International Survival	“ Before, a person would get in for enthusiasm and capital. Now, if they don’t prove they fit the profile, that they are committed and will run the business, they’re not in. This was our mistake in Portugal.” - CEO. “In Spain we had the store in Madrid, in a much more ‘concept than business’ street, we want to have stores where we can bring concept and make business too.” - CEO.

Countries	Entry Period	Countries	Exit Period	Reason to leave the country	Path Dependence
Brazil	1993	-	-	-	Domestic Path Dependence: given by the construction of company's capabilities and knowledge in the domestic market.
Paraguay	2002	-	-	-	Path Dependence Transition: occurred right after the company's internationalization.
Portugal, United States, Argentina, Australia, and Uruguay	2004-2007	Portugal	2008	Portugal: due to the 2008 crisis that hit the country associated with the lack of capacity of franchisees and the inadequate point of the store.	Path Dependence Transition.
Spain, Angola, Bolivia, France, South Africa, Mozambique, Saudi Arabia, Peru, Tunisia, and Jordan	2009-2014	Spain, Australia, South Africa, Mozambique, Tunisia, Jordan and Saudi Arabia	2010-2014	Spain: inadequate location; Australia: not the right city; South Africa: inadequate location; Mozambique: high taxes; Tunisia: mismanagement of the franchisee; Jordan: mismanagement of the franchisee; Saudi Arabia: problem with the franchisee.	Path Dependence Transition.
Guatemala, Costa Rica, Chile, Caribbean, Aruba, Puerto Rico, Panama, Colombia and Mexico	2014-2019	-	-	-	Regional Path Dependence: begins to form after expansion of the company to geographically close countries.

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