Internationalization of Digital Platform SMEs: The Network Perspective

Abstract

Previous research on internationalization has applied the business network approach to a large extent; also, studies on internationalizing digital platform firms discuss how these com-panies establish their user network. However, little is known about how these two types of networks (a business network and a user network) are combined and influence the interna-tional expansion of a digital platform SME.

Therefore, the objective of this research is to study the relationship between these two types of networks in the internationalization of a digital platform SME, specifically focusing on the one-way relation from business to user networks, and answer the research question “how do business networks enable digital platform SMEs to internationalize their business and create a user network when internationalizing?”. The theoretical framework for this study covers rele-vant literature concerning internationalization, business networks, platform businesses and their user networks. This thesis is based on the multiple-case study of international digital platform firms from Finland. The data include semi-structured interviews conducted with founders and managers of three firms.

The results of this thesis highlight the connection between these two networks in the interna-tionalization of digital platform SMEs; it shows how the business networks aid in the for-mation of the user network. This study was able to bring a new perspective of how business networks, which occur in the physical space, aid in building user networks, which occur in the digital space. The study shows that building long-lasting business networks is time-consuming; however, relationships formed in person are highly important even for a business which operates fully digitally. Furthermore, this study underlines the importance of business networks for an emerging business, since a business may otherwise not gain access to all needed resources when expanding internationally.