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The purpose of this paper is to explore the legitimacy needs and legitimation strategies of Internet start-ups in the context of industry dynamism.

The purpose of this paper is to explore the legitimacy needs and legitimation strategies of Internet start-ups in the context of industry dynamism.

The authors found that Internet start-ups are in great need of acquiring market and relational legitimacy at their nascent stages. Conformance to the environment is widely adopted by them as a legitimacy-enhancing strategy. There is an inverted “U” relationship between the maturity of the industry and the proactivity of any legitimation strategy in the sector. In the face of high- and low-level industry maturity, start-ups tend to employ prudent strategies to build up legitimacy. While in medium-mature industries, ventures are more likely to adopt proactive and aggressive strategies.

Due to the very nature of case methodology, this study is based on a small number of observations and it is set in the context of the Internet industry. The generalizability of its findings needs to be reinforced by further concrete studies.

This paper suggests that industry dynamism should be taken into account carefully when implementing a choice of legitimation strategies.

This study makes an attempt to further our understanding of how industry dynamism influences firms’ choices of legitimation strategies.

The “New Economy” was the economic buzzword of the 1990s. Digitization and networking, accompanied disproportionally by an increasing efficiency of information and communication technology exchanges, served as the foundation for sustainable economic changes in the way business is conducted (Gersch & Goeke, 2004). The new Internet architecture and the economic transactions that are based on it became of increasing importance worldwide.

Many newly established Internet loss-making enterprises (NEILEs) are always willing to expand overseas within a very short time from their establishment. This phenomenon is becoming a hot research area. This paper aims to explore why these enterprises are always willing to expand overseas rapidly even if they are facing severe and persistent losses, and to study the different rapid internationalization modes and the international market entry ways for NEILEs.

This paper constructs a theoretical framework with the dual situation of negative attainment discrepancy and advantageous slack resources to explain the rapid internationalization of NEILEs. Furthermore, cross-case comparative analysis method, based on interviews, questionnaires and secondary data collection, is adopted to reveal the rapid internationalization modes and the international market entry ways of such enterprises.

Whether blocking competitors or seeking opportunities or both, NEILEs' goal of rapid internationalization depends on the severity and persistence of negative attainment discrepancy. When the severity and persistence of negative attainment discrepancy are very significant, moderate and mild, NEILEs choose sniper-type, opportunity-type and dual-type internationalization target mode in turn; it is very important for NEILEs to match advantageous slack resources and international market entry ways to achieve specific internationalization goals.

This paper enriches the understanding of NEILEs' transnational entrepreneurial behavior in the era of digital economy. The theoretical contribution of this paper is that the authors build a theoretical framework based on the logical starting point, the logical fulcrum and the logic ending point for understanding the rapid internationalization of NEILEs.

This study demonstrates that NEILEs can also expand into foreign markets according to their own characteristics. Undoubtedly, they need to choose appropriate internationalization target mode and international market entry way in line with the extent and duration of their losses, and their advantageous slack resources.

In this paper, the authors construct the rapid internationalization theory of NEILEs based on the dual situation of negative attainment discrepancy and advantageous slack resources in digital economy era. Moreover, the authors discover the behavioral characteristics and patterns of NEILEs' transnational entrepreneurship.

The Internet is changing the way that companies carry out their business and, in fact, constitutes an entirely new application domain, which makes product innovation possible. Moreover, it is a new medium for reaching consumers, which is a central preoccupation to organisations in the current business market. Here interest lies in video chatting on the Internet. This is a type of service that adds video support to chatting using a Web cam and is gradually attracting more Internet users. The paper consists of a market feasibility study evaluating the potential commercialisation of a software program that enables the “cutting away” of the chatters from the original background filmed by the Web cam, and later re‐integrates them into a new background. The software program could, therefore, be interesting for advertising companies.

This chapter investigates the relevance of accounting and other information to valuing Internet IPOs during the years 1998–2000 in Europe and the United States. We show that market value is negatively related to net income in the Internet bubble period before April 1, 2000 in both European and U.S. IPO markets. This is consistent with an Internet firm’s start-up expenditures being considered as assets, not as costs. Furthermore, for the U.S. IPO market, we find that free float is value relevant during the Internet bubble. Underwriters and issuers restricted the supply of shares at the IPO. This drove up market prices as investors were keen to buy Internet IPO shares.

In the wake of some fairly spectacular “dot.com” crashes in the recent past, it is appropriate to open debate on the success (or otherwise) of new Internet “start‐ups” versus large incumbent conventional industry players (in retailing) starting their own Internet activities as separate “bolt‐on” businesses (and new distribution/communication channels.) This paper examines exploratory interviews with senior managers from a selection of “established” organisations in contrasting retailing sectors. Its purpose is to explore the challenges and issues faced by these large retailing organisations in establishing competitive Internet businesses. Insights and reflections are provided for other managers who are also following this line of business expansion. Some of the companies that participated in the research include Dell Corporation, IBM, Tesco Direct, Lotus Notes, Interflora, Flying Flowers, Virgin, Charles Schwab, Waterstones and Thomas Cook.

Marketing, branding, strategic management, online retailing, and entrepreneurship.

Postgraduate courses in: strategic management; marketing management (branding); and entrepreneurship.

The case describes the founding and the first year of an Estonian internet start-up, the “deal-of-the-day” web site Cherry.ee. The focal topic of the case is the analysis of alternative scenarios for the further development of the company after the first year in business: selling the company, entering into a merger with similar businesses, or continuing to develop the brand independently. The case gives an example of creating a new market, introducing a new business model and launching a brand with substantial use of social media marketing. The successful business model was quickly copied by a lot of followers creating a fierce competitive environment and raising a question of sustainability of the competitive advantage. The case provides an opportunity to discuss how to strategically handle the development of a growing start-up company in an increasingly competitive market environment.

Understanding the critical success factors and potential pitfalls for an internet start-up; developing skills to critically analyze the concept of sustainable competitive advantage; comprehension of the main factors influencing the strategic decision on whether to follow a growth, cooperation, or exit strategy; and awareness of the relative advantages of online and offline marketing and understanding how social media strategies can be used to build a brand.

Teaching note.

Start-ups are a new form of business venture that has quickly revolutionized the sport industry due to their ability to quickly develop ideas into commercial entities. Generally, most discussion about start-ups tends to take a collective view without considering the industry context. In this chapter, the author discuss how the sport industry is a unique form of start-up that is quickly gaining traction in the global sport industry. The reasons and advantages of sport start-ups are examined in terms of the existing literature and practice around nascent ventures. The crucial need for social capital and networks in developing sport start-ups is stated, which highlights the importance of analyzing start-ups from a sport industry perspective. In addition, the role of strategy and innovation in pursuing a start-ups mentality is progressed. This helps to provide an overview about the current practice of sport start-ups and to predict future developments.

Electronic‐retailing is the buzzword of 2000. Every other press release I receive relates to electronic commerce or Internet shopping. Therefore, it seems appropriate to focus this summer issue of Retail Insights on the subject. The first article by Rowley discusses the phenomenon of shopping bots, the intelligent agents designed to support comparison shopping across a number of Internet sites. She reviews the functions and evaluates the coverage of different shopping bots. In the second article, Wee and Ramachandra assess the level of cyberbuying activities in China, Hong Kong and Singapore by concentrating on the who, why and what of online retailing.

Looks at the current market environments of Telstra and PCCW, and analyses the issues and concerns raised by the announcement of this strange marriage. Concludes the main attraction for both parties is the hug untapped telecommunications market in China and other Asian countries.