Internationalization Strategies of Chinese IT Service Suppliers

Abstract

With China emerging as a new frontier of global IT outsourcing, many Chinese IT service suppliers are actively expanding in three major markets: Asia, especially Japan, the West, especially the United States, and the Chinese domestic market. Compared to multinational suppliers and established Indian suppliers, Chinese IT service firms are at a relatively early, but rapidly growing stage, which offers a unique opportunity to explore an understudied topic in the information systems literature: internationalization strategies of IT service suppliers from emerging economies. Through a three-part qualitative case study of 13 China-based IT service firms, including almost all of the Chinese suppliers recognized globally, this study elaborates the internationalization behavior and decision rationale of these suppliers. The findings show that these major Chinese suppliers include both firms that incrementally internationalize and firms that are “born global.” For both types of firms, the entry and growth in different markets is a highly dynamic activity combining a strategically planned, resource-seeking process and a flexible, opportunistic bricolage process based on existing operation capabilities and client relationships. The suppliers dynamically oscillate between these processes to exploit and create opportunities while expanding in multiple markets.

Keywords: IT outsourcing, supplier’s perspective, internationalization, strategy process, China

JEL Classification: A00