Digitalization is the key to optimizing international performance – what we can learn from born-digital companies

Digitalization has already changed the way companies do business, forcing both companies and their clients further up the adoption curve almost overnight. As Junior Researcher Ioan-Iustin Vadana from the LUT School of Business and Management describes, due to the COVID-19 crisis, we have woken up in a world in which digital channels are the primary user-engagement model – and in some industries the only one.

Digitalized processes are an important driver for survival and the basis of flexible and transparent solutions for value chain activities.

"However, few companies are set to take advantage of the new opportunities offered by digitalization or master the challenges that come with them. One of the biggest factors that differentiates digital companies from others is how quick and adaptable they are in setting, executing, and adjusting their digital strategy," Vadana says.

In other words, the velocity and adaptability of a company's value chain activities for going to foreign markets and finally optimize their international performance.

"Due to the emergence of this phenomenon, novel approaches must be developed to encompass these new types of organizations. Moreover, they can help in developing a much-needed nuanced understanding of the impact of digitalized value chain activities on internationalization," says Vadana, who will defend his doctoral dissertation Internationalization of born-digital companies in the field of International Entrepreneurship on 20 November 2020.

Digitalized companies grow more rapidly internationally

Research has only partially captured the impact of the digitalization of the value chain on the internationalization of companies, focusing particularly on downstream activities (e.g. delivery, marketing and sales, support) and less on upstream activities (e.g. creating and producing).
According to Vadana, although marketing and sales are often core elements of early internationalization, this focus on downstream activities offers an incomplete image of the international activities and strategies of companies.

"Overall, both upstream and downstream activities can provide access to different types of knowledge from different sources – suppliers, partners, users, competitors, market – and offer opportunities for growth and improve the international performance of a company," Vadana analyses.

Vadana continues to argue that the results of previous studies and his dissertation research support the fact that interaction between online and offline internationalization approaches increase knowledge of foreign markets and users, thereby implying that digitalized companies grow more rapidly internationally and extend the dispersion of value chain activities.

"This suggests that the coordination of value chain activities with digital technologies represents a unique and valuable type of competitive advantage in international markets".

Greater digitalization will virtually decrease the distance between companies and customers.

Ioan-Iustin Vadana, Master of Science in Economics and Business Administration, will defend his doctoral dissertation in the field of international entrepreneurship in an online event on 20 November 2020 at 3 p.m.

Further information:

Junior Researcher Ioan-Iustin Vadana
+358 40 724 302 757