Academic journal article International Journal of Entrepreneurship

From 'Break Out' to 'Breakthrough': Successful Market Strategies of Immigrant Entrepreneurs in the UK

Academic journal article International Journal of Entrepreneurship

From 'Break Out' to 'Breakthrough': Successful Market Strategies of Immigrant Entrepreneurs in the UK

Article excerpt

ABSTRACT

This paper explores the strategies that enable ethnic minority immigrant entrepreneurs to 'break out' of local ethnic markets and 'break through' into more promising markets with greater opportunities. It analyzes the contextual and personal characteristics of the entrepreneurs that implement those strategies, based on a primary survey of South Asian entrepreneurs in the UK. The analysis suggests that breaking out of co-ethnic customer markets is neither necessary nor sufficient for entrepreneurial expansion. The critical factor is the entrepreneur's ability to break through into customer markets that are larger, by geographical reach or profit margins and value added. Many successful immigrant entrepreneurs leverage market knowledge of their home countries. At the same time, the more successful entrepreneurs break out of ethnic labor markets by hiring non-ethnic employees. The capacity to 'break out' and 'break through' into larger, global markets, is strengthened by the entrepreneur's education, experience, access and ability to leverage international business networks, and agility to move into more promising markets.

INTRODUCTION

It is, by now, widely acknowledged that ethnic minority immigrants have a high propensity towards entrepreneurship and contribute positively to economic development. Recent studies have highlighted the significant contribution made by immigrant entrepreneurs from India, China, and other countries, to innovation and job creation in the US (Anderson & Platzer, 2006; Fairlie, 2008; Wadhwa, Saxenian, Kissing, & Gereffi, 2008). Ethnic minority entrepreneurs, many of whom are immigrants, are overrepresented among the population of entrepreneurs in the Netherlands (Kloosterman, 2003) and the UK (Levie, 2007). Although entrepreneurship has been the route to upward economic and social mobility for some ethnic minority immigrant entrepreneurs, for others it has been an economic dead end (Barrett et al., 2001). Much of the literature on ethnic minority immigrant business owners, especially in Europe, focuses on the disadvantages faced by them and the small average size of the firms they own, and neglects to analyze how and why a significant number of ethnic minority immigrant entrepreneurs have succeeded in expanding their businesses. In recent years, the term 'break out' has been used in the context of ethnic entrepreneurs who break with the exclusive reliance on ethnic markets (Ram & Jones, 1998). However, there are few scholarly accounts of the process of 'break out', the nature of marketing strategies developed by successful immigrant entrepreneurs and the underlying factors that enable some immigrant entrepreneurs to implement these strategies and overcome existing market barriers.

What are the market barriers and opportunities facing ethnic minority immigrant entrepreneurs? How do they negotiate those market conditions? How and why do entrepreneurs facing similar market structures adopt different market strategies? What are the key features of 'break out' strategies and do they relate to product markets or factor markets? What are the factors that support or obstruct entrepreneurs in adopting 'break out' strategies? Is 'break out' necessary or sufficient or is 'breaking through' into new markets equally important?

This paper aims to shed light on the above questions. It also attempts to provide a taxonomy of the alternative market strategies that immigrant entrepreneurs might adopt. It goes on to explore the characteristics of 'break out' and 'breakthrough' strategies, and the personal and contextual characteristics of the entrepreneurs that implement them.

LITERATURE REVIEW: SOME KEY ISSUES

Many of the market barriers facing ethnic minority immigrant entrepreneurs are similar to those facing small businesses in general. These include the difficulties of attracting initial customers, competing with entrenched competitors and building a reputation in the marketplace. …

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