As technology progresses, it has become increasingly easy for digital platform companies to reach customers around the globe. This ease of access can make scaling up seem effortless — after all, virtual marketplaces are borderless by nature, and so it can be tempting for these businesses to view the entire world as their target market from inception. In reality, however, distinct challenges remain when it comes to expanding a platform business beyond its home base.
3 Obstacles to Globalizing a Digital Platform
And how to overcome them.
May 03, 2022
Summary.
Many platform businesses rely heavily on network effects to drive their growth. But when it comes to international expansion, research suggests that network effects are insufficient to replicate the rapid market penetration these firms may be used to at home. Specifically, there are three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. Through a series of quantitative and qualitative studies, the authors identified the common hurdles that digital platforms face in each of these three areas, as well as strategies that can be effective in addressing those challenges when attempting to enter a foreign market.
New!
HBR Learning
Global Collaboration Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Global Collaboration. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to overcome barriers when working globally.
Learn More & See All Courses
New!
HBR Learning
Global Collaboration Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Global Collaboration. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to overcome barriers when working globally.