International Leadership Forum Lucerne: How can SMEs be led to international success?

It was a small, manageable crowd of visitors who gathered at the Hotel Radisson Lakefront in Lucerne on the afternoon of June 26, 2019. However, this "intimate" setting allowed for an in-depth discussion of the conference topic "Leading SMEs to international success". The Institute of Business and Regional Economics of the Lucerne School of Business had invited Prof. Dr. Ingo Stolz to the event. He led a research project on "SME internationalization", which was supported by the Swiss Society for Organization SGO and financed by Innosuisse. This research project dealt, among other things, with the question of how an SME can be led to successful internationalization and how international market success can be secured in the long term. It is surprising how little was known so far about the right answers to this, writes Prof. Stolz in the foreword to the study.

What it takes for international success

Together with Thomas Affolter, Partner and Head of Market Region Central Switzerland at KPMG, Prof. Stolz summarizes some key findings from the research project. SMEs that want to position themselves internationally find themselves in various areas of tension. For example, it is a matter of the role of the manager as well as - and this is often decisive - existing competencies and resources. "SME internationalization is a leadership task," Affolter and Stolz agree. Internationalization essentially results from entrepreneurial processes that are characterized by continuous and proactive action, as a basis for creating and identifying opportunities, they said. From the study of the various "internationalization paths" of SMEs, a pattern consisting of three phases can be identified: First, a start-up phase, which involves the exploration of opportunities. This is followed by a consolidation phase, during which the companies test and evaluate various options. This is followed in the establishment phase by the consistent implementation and scaling of concrete internationalization projects. For this to succeed, risk awareness, strategy, an organization's ability to learn, entrepreneurial spirit, intercultural knowledge, international partnerships and a market orientation based on knowledge of one's own strengths are required. As part of the research project mentioned above, an instrument was developed to measure and benchmark the "internationalization capability" of an SME.

Swiss quality for the Asian market

Katharina Ueltschi provided an insight into what internationalization can look like in practice. She is Managing Director of Bernina Singapore. She, who also lives in this city-state, has made it her mission to popularize sewing with Bernina sewing machines in the Asian region. She reported how she was able to use her international network, which she had successively built up during her various professional positions with large luxury brands, to create a branch in Asia. "The network is absolutely crucial," Ueltschi said. It was the only way she was able to gain a foothold with the Bernina brand in the first place. In Singapore, for example, it is crucial to know the important tycoon families personally. In addition, she primarily moves in local networks, "not in the many expat clubs. Because then I could just stay in Switzerland," Ueltschi continues. This cultivation of relationships has also enabled her to open a concept store for Bernina machines in a good location. Her strategy is clear: direct to the end customer, without intermediaries. Accordingly, Katharina Ueltschi is currently investing a lot in marketing at Bernina Singapore in order to increase "brand awareness" - "this is an absolute must!" - to increase.

Workshops show different internationalization strategies

In three workshops, other companies provided insight into their internationalization strategies. Pohland AG, a system supplier for mechatronic assemblies and systems with 17 employees, currently generates only 8 percent of its sales abroad, primarily in Germany. Managing Director Carsten Pohland has set himself the goal of increasing this share to 20 percent in the next five years. The initial approaches have been promising, and now the German market is to be further developed through targeted measures along the customer journey - always within the scope of the possibilities available to the small company. A much larger company is Leister AG, a manufacturer of equipment for welding plastics. In his workshop, management member Christoph Baumgartner gave the attendees practical advice on what companies should look for in their internationalization strategies. Last but not least, he referred to the experiences his company has made, for example with an organically grown network of distribution partners. The startup SwissLuggage AG with CEO Jürg Mischler, on the other hand, proceeded very systematically: For the international distribution strategy, it first analyzed the already existing structure, identified best cases, and used a SWOT analysis to show the targets and strategic options. Based on this, the manufacturer of high-quality luggage developed a concrete scenario, which was then implemented. The results are promising: thanks to a sophisticated display solution, the products attract increased attention and sales figures in the retail trade.

Many correct answers

In front of the plenum, Jürg Brand, Chairman of the Board of vonRoll hydro AG, then explained innovation-driven international perspectives on the one hand - shown by the example of "zerowaterloss", which is intended to prevent water losses through leaking pipes - and on the other hand Oliver Imfeld, manager of DJ Bobo, showed what can be learned from his international business success. After all, even a show star is ultimately an SME.

Overall, the International Leadership Forum Lucerne was characterized by a great closeness to practice. The companies present and involved in the research project were able to show that there are many correct answers to the question of how to lead an SME to international success. We look forward to the further development of the event and its next execution. In any case, we hope that the International Leadership Forum Lucerne will have a broader impact.

More information:

• https://www.hslu.ch/ilfl (with links to the individual speakers)
• To the study (directly as download or to order via a form: https://www.hslu.ch/kmu-international)
• Interview by Ingo Stolz at CNN Money Switzerland: https://www.cnnmoney.ch/shows/living-markets/videos/ingo-stolz-why-swiss-start-ups-shouldnt-compete-price