Business model mechanisms for overcoming the liability of platformization in international digital platform firms

Abstract

While the extant research recognizes that digital platforms not only enable internationalization but can also hinder the process, the prior studies do not address how firms can overcome these hindrances. We describe these as the liabilities of platformization, and explore the mechanisms by which to overcome them and thereby support the internationalization process. We conduct a multiple-case study of six international firms from Finland, whose business models are based on digital platforms. Our findings distinguish three facets that constitute a more general aggregate of the liability of platformization, namely the liabilities of digital space, control loss, and user-network outsidership. Consequently, we propose three respective mechanisms that enable firms to tackle these liabilities: digital platform customization, digital platform personalization, and establishing a local presence. Our study contributes to the emerging research on business models in an international context.