The Impact of Digitalization on the Speed of Internationalization of Lean Global Startups

Michael Neubert

doi:10.22215/timreview/1158

Abstract

Lean global startups need to internationalize early and fast. The digitalization of new foreign market development helps them to more efficiently identify new market opportunities in global markets. With this approach, they are saving resources while developing the most attractive markets. This article examines how lean global startups develop new foreign markets more rapidly due to digitalization. Thus, the aim is to understand the impact of digitalization on speed of internationalization of lean global startups. The study addresses a gap in the scholarly literature and a practical need to evaluate new foreign markets and business opportunities more quickly and more regularly and to understand what helps lean global startups react more quickly to opportunities and threats with respect to changing market attractiveness. Furthermore, it outlines why and how digitalization is important throughout the internationalization process. The re- search followed a multiple case-study design using different sources of evidence, including 73 interviews with senior managers of lean global startups. The findings reveal that digitalization allows lean global startups to increase decision-making efficiency and to optimize strategies and processes for evaluating international markets. The findings suggest that lean global startups can benefit from the use of digital technologies by applying a more efficient foreign market development process with regular reviews and a reduced workflow, by faster mediation between local market realities and strategic goals, by analyzing all foreign markets instead of just a sample of them, and by optimizing decision-making processes including the ability to make long-term, strategic decisions due to better market information.

Highlights

Digitalization describes the integration of digital technologies into any aspect of daily life that can be digitized (Gray & Rumpe, 2015; Khan, 2016)
As new international ventures that create new market niches using innovative technologies and new business models (Rasmussen & Tanev, 2015; Tanev, 2017), The Impact of Digitalization on the Speed of Internationalization of Lean Global Startups Michael Neubert it may be helpful for lean global startups to use digitalized technologies to collect and analyze data about international markets and client feedback to speed up decision-making processes, because they depend on iterative, incremental product development cycles
Lean global startups expect a significant impact of digitalization on productivity, profitability, and sales revenues, especially through a higher efficiency of all international networking and learning activities due to the application of big data and predictive analytics

Summary

Introduction

Digitalization describes the integration of digital technologies into any aspect of daily life that can be digitized (Gray & Rumpe, 2015; Khan, 2016). Digitalization is based on the availability of large amounts of external and internal (and often cloud-based) data (Gray & Rumpe, 2015) from different sources, and data mining and machine learning techniques to use it for decision-related purposes, such as the identification of a business opportunity or predictions of future market and client behaviour (Witten et al, 2016) Depending on their business model, firms with digitalized market development processes can acquire clients from foreign markets without investing in a local production or sales force using, for example, their website traffic to identify market opportunities or online marketing tools to acquire a global client portfolio while remaining in their home market (Coviello et al, 2017). Lean global startups need to understand their own costs, as well as market prices and their products’ value, to select correct prices and pricing models (Neubert, 2016a; 2017b)

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