MG5141: Critical Thinking and Analytical Skills

WHY IS RAPID INTERNATIONALISATION A VIABLE GLOBALISATION

STRATEGY FOR DIGITAL FIRMS?

SUBMISSION BY: Nalin Kakkar

22210913
SUBMITTED TO: Dr. Yixin Qiu
MODULE: MG5141- Critical Thinking and Analytical Skills
MSc International Management
University of Galway (Batch 2022-23)
ASSESSMENT: IV- Individual Seminar Paper
WORD COUNT: 1053
(Excluding references)

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RESEARCH QUESTION
Why is rapid internationalisation a viable globalisation strategy for digital firms?

RATIONALE
Rapid internationalisation is a method for the firms to globalise their operations.
While it may be challenging for a firm to enter multiple markets at the same time by rapid
expansion of their business, this research is expected to explore that in case of digital firms,
due to their operations, presence, and easy international access, it becomes a viable strategy.
Researching over this question allows us to have an insight for having this strategy as a viable
option in case of digital firms and assists the businesses to keep the findings in the hindsight
while planning expansion.

LITERATURE REVIEW
Companies that rely heavily on internet for production, operation, and delivery of
their services are termed as digital firms. These include, but not limited to, online platforms
(e.g., Meta), E-Commerce platforms (e.g., Etsy, Flipkart), Digital solution providers (e.g.,
PayPal), Digital content platforms (e.g., TikTok, Spotify). The main characteristics of a
digital firm are devising and using an internet-based (digital) infrastructure, and relying on
the same for collaborations, communications, creating sales, generating financial stability and
profitability. (Monaghan, Tippmann and Coviello, 2020)
‘Born Digitals’ are the companies that base their working around the digital platforms
since their beginning. It is due to the reduced expansion cost and time for the digital firms
that they are often termed as ‘Born Digital’. They are expected to grow rapidly into a global
firm due to their instant accessible presence on the internet. (Monaghan, Tippmann and
Coviello, 2020; Ye, Kang and Scott-Kennel, 2022)
‘Rapid Scaling’ is a term coined for the significant increase in customer base of a firm
that bases itself in digital environment. The research poses emphasis on digital innovation for
a source of rapid growth in the case of digital ventures, as it adds value towards the use for
the consumers. For a firm which works focusing on digital platforms, providing innovation
and value addition, is essential to rapidly increase their customer base. (Huang, et.al., 2017).
With the onset of digitalisation, and blurring of the line between physical and digital worlds,
a firm that base itself on digital infrastructure can move rapidly and navigate the new markets
quickly. Digital platforms are proven to be quicker and easier than the older ‘brick-and-
mortar’ method of internationalisation. (Vadana, et.al., 2019)
Previous researches suggest that understanding the relationship between the variety of
internationalisation (online or offline) and degree of digitalisation gives an idea of foreign
market and expected users; correspondingly, it affirmed that the ‘born digital’ companies
stand in a position for rapid internationalisation to survive the dynamic shifting market when
handling global value chains within digitalised environment. (Vadana, et.al., 2019).
As implicated by Ye, Kang and Scott-Kennel (2022), international expansion of
digital firms depends more on development of infrastructure in the new market, and the
user’s interaction with the same. Apart from it, they also highlight that since digital firms
originate from a niche position, they depend on rapid penetration into targeted markets with

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limited asset involvement. This, accompanied by a shorted product life, invites a risk of being
duplicated by competitors.
Digital firms have access to the rapidly changing market trends. As they are primarily
data driven, analytics can be used to devise the market entry opportunities, modes, strategies,
or campaigns. Nevertheless, even after using such prediction algorithms (based on historical
data) to forecast the growth pattern for the firm, it is upon the international managers to
balance between local markets, and the corporate goals and objectives and prioritise or
neglect the forecasting suggestions. (Neubert, 2018). Based on the understanding of ‘Airbnb’
Case, entrepreneurs of the firm were able to discover the demand matrix for their product
using the cloud computing services. It was the digital infrastructure that gave a sense of
‘fluidity’ to the business, which allowed them to expand multi-fold in a non-linear sense, and
grow into an international business. The research elucidated on the idea that rapid
digitalisation of products and services through various industries attract entrepreneurial
initiatives laden with digital ideation. (Nambisan., 2017). Advancement of digital
technologies, coupled with intensified competition has led business leaders to ponder over
‘how’ rather than ‘why’ when planning rapid internationalisation. (Ye, Kang and Scott-
Kennel, 2022).
Rapid digitalisation, even though tedious and risky by nature, it seems to be a viable
option in case of Digital firms as it acquires proper utilisation of their resources and
capabilities. With the world heading towards being a ‘global village’, they undoubtedly are
connected now more than ever. This has also led to opening of new opportunities for firms
with a mindset of internationalisation, but it has also implicated challenges for firms
restricting themselves to one niche or one market, as they might feel to be ‘pulled’ into rapid
internationalisation.

PROPOSED RESEARCH DESIGN

The purpose of this study is to assess the viability of the rapid internationalisation
method for a digital firm. Thus, for this research, it is planned to study the patterns of
globalisation by the existing digital firms in the last five years. The firm’s timespan of being
established into a market at one destination and then being expanded into multiple
destinations and markets, till it reaches ‘global’ level marks the criteria of understanding for
this research. The data that is needed for this, to support our results, will be driven both from
quantitative and qualitative data analysis.
Quantitative data may include the report review regarding financial dependency,
returns, assets, and customer related data.
Qualitative data may include the interviews with the upper management, and leaders
of the chosen companies for discussing the pathway which they followed for globalisation,
the advantages and disadvantages they realised of the pathway, the challenges they faced, and
what should be the prime focus if another company is planning to follow their footsteps.
Apart from this, a critical document review should also be carried for the studying the
layout that was planned by the company for this internationalisation purpose.
Possible limitations to this research could be the variations of data from various industries
and their demand incompetency. Another limitation is the lack of judgement of
entrepreneurial mindset of the leaders, and absent motive of globalisation of a firm. Along

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with this, the novice research attitude of the author, coupled with inexperience towards
handling the data might also possess a limitation towards this study.
REFERENCES
Huang, J., Henfridsson, O., Liu, M.J. and Newell, S., 2017. Growing on steroids: Rapidly
scaling the user base of digital ventures through digital innovation. MIS quarterly,
41(1).
Monaghan, S., Tippmann, E. and Coviello, N., 2020. Born digitals: Thoughts on their
internationalization and a research agenda. Journal of International Business Studies,
51(1), pp.11-22.
Nambisan, S., 2017. Digital entrepreneurship: Toward a digital technology perspective of
entrepreneurship. Entrepreneurship theory and practice, 41(6), pp.1029-1055.
Neubert, M., 2018. The impact of digitalization on the speed of internationalization of lean
global startups. Technology Innovation Management Review, 8(5).
Vadana, I.I., Torkkeli, L., Kuivalainen, O. and Saarenketo, S., 2019. The internationalization
of born-digital companies. In The changing strategies of international business (pp.
199-220). Palgrave Macmillan, Cham.
Ye, S.M., Kang, Y. and Scott-Kennel, J., 2022. Born-digital: The Internationalisation path of
digital firms.

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