Abstract
Service markets are both global and local. Firms develop strengths in the domestic market that can be exploited abroad, but we also see firms that from the very start work with international business models. The markets for these service firms are very different and the underlying competitive advantages that can be exploited can change rapidly. Through digitalization and the possibility to provide highly value-added services through the Internet, the spatial dynamics of these markets are volatile. This chapter discusses how firms can work over geographical distances and what makes a digital business model internationally scalable. Whereas the Internet has paved the way for rapid international expansion for firms such as Google and Facebook, most digital business face difficulties in expanding across borders. By analyzing the spatial logic for digital business models and by presenting an in-depth case study of a Swedish firm, Truecaller, this chapter analyzes the determinants for international scalability for firms with digital business models, and contributes new theoretical insights and practical advice for business managers seeking to internationalize their digital businesses.
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Notes
- 1.
We apply the term ‘Online Service Provider’ (OSP), which has become an accepted term in research (Taddeo and Floridi 2015). An OSP is as a firm that provides services for users over the Internet. Examples of online services are social media (e.g. Facebook), games (e.g. Angry Birds), or information (e.g. Dictionary.com), and are digitized services. We want to emphasize that OSPs should not be confused with manufacturing and service firms using the Internet as a sales channel.
- 2.
The number of international offline offices increased substantially between 2016 and 2017—from 37 to 42.
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The authors want to express gratitude to the interviewed cofounders and managers of Truecaller for sharing their experiences regarding internationalization.
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Wentrup, R., Ström, P. (2019). Service Markets: Digital Business Models and International Expansion. In: Aagaard, A. (eds) Digital Business Models. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-96902-2_7
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