Internationalization Strategies of IT Vendors from Emerging Economies: The Case of China

As China rapidly emerges as the new frontier of IT offshoring, the country’s IT outsourcing industry undergoes a profound change: many vendors are strategically shifting their client bases from Japan to the U.S. and Europe. This trend provides us with a good opportunity to investigate an understudied topic in the IS literature: the internationalization strategies of IT service vendors from emerging economies. Specifically, this study explores how China-based IT vendors transform their capabilities acquired in domestic and Japanese markets to expand into the Western market. Through qualitative case studies of six major IT service firms in China, this paper develops a theoretical model for conceptualizing the internationalization strategies of IT vendors based in emerging economies. This model consists of three unique key processes: i) an internationalization process; ii) a strategic decision-making process; iii) a capability-building process. These three processes continuously interact with one another to shape firms’ internationalization practices.