3 Obstacles to Globalizing a Digital Platform 3 Obstacles to Globalizing a Digital Platform. Length: 1602 word count Publication Date: May 3, 2022 Discipline: Strategy Product #: H070TC-PDF-ENG What's included: Educator Copy $4.25 per student degree granting course $7.46 per student non-degree granting course Facebook Twitter Pinterest Linkedin. Indeed, even purely digital platforms such as Dropbox and Salesforce (which have no need for any physical infrastructure in their international markets) have begun establishing offices around the world and empowering local talent to lead those offices to help them stay abreast of local customers evolving needs. May 3, 2022 May 3, 2022 by Liang Chen. 3 Obstacles to Globalizing a Digital Platform. In addition, platform businesses must prioritize acquiring not only end users, but also the content creators, streamers, and sellers or complementors that will populate their platforms. TRADING RANG DONG JOINT STOCK COMPANY dynamic deep link android; nash community college registrar; give and take nyt crossword clue We conducted a series of quantitative and qualitative studies to explore these challenges, including analyses of mobile app data from more than 50 countries app stores, regulatory filings, and investment records, as well as more than 100 hours of interviews with executives at platform firms such as Xiaomi, Dropbox, and ByteDance. But as platform businesses expand across multiple countries, these flat structures may become insufficient to manage the idiosyncrasies of each market. May 17, 2022. When expanding globally, platform firms should consider borrowing a few tricks from conventional multinationals, such as recruiting knowledgeable local staff, building relationships with decision-makers, providing public services, increasing local value-added, and forming alliances with local players across industries. By: Liang Chen, Sali Li, Noman Shaheer, Maximilian Stallkamp . These strategies had twin benefits: They both increased the platforms appeal in the market and helped the company build a network of local supporters and spokespeople with a strong interest in protecting the platforms continued operations. Similarly, ByteDance keeps Douyin and TikTok fully separate, with independent management teams for each brand. Many platform businesses rely heavily on network effects to drive their growth. When expanding globally, platform firms should consider borrowing a few tricks from conventional multinationals, such as recruiting knowledgeable local staff, building relationships with decision-makers, providing public services, increasing local value-added, and forming alliances with local players across industries. "> As technology progresses, it has become increasingly easy for reach customers around the globe. This refers to an architecture that centralizes common product components (e.g., search recommendations, payment systems, algorithms, etc.) While the typical playbook for digital platform expansion generally focuses on prioritizing technological excellence, ensuring a first-mover advantage, and aggressively acquiring users, this approach can backfire when navigating a complex international landscape. "> As technology progresses, it has become increasingly easy for reach customers around the globe. Some of these hurdles may take the form of what we call hard legitimacy challenges: that is, laws and regulations that directly limit firms market access or render their existing business models untenable, neutralizing any first-mover advantage. Welcome! These leaders often have limited familiarity with foreign markets, stymying international growth efforts. To be sure, network effects will always be a key driver for globalizing platform firms but our research suggests that theyre not enough to automatically guarantee growth beyond a companys home base. 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. As the battle between Lazada and Shopee demonstrates, its critical to empower local managers who are better equipped to understand and adapt to country-specific needs. However, if you feel like you don't want your business to expand internationally, you may face the following risks: Lose competitive advantage. Required fields are marked *. As Ubers struggles in Europe and parts of Asia illustrate, commercial success is difficult to sustain when local stakeholders are not supportive. Sounds perfect Wahhhh, I don't wanna . For example, Chinese users on the streaming site Bilibili may attract other Chinese users but theyre unlikely to attract many overseas users, limiting the platforms ability to grow beyond China. Finally, many platform businesses attempt to lead global expansions with homogeneous leadership teams recruited from their home countries. For example, although Alibaba subsidiary Lazada had access to advanced AI-powered search recommendations, it was surpassed in many global markets by the much smaller Shopee, which relied more on local managerial insights than on imported technological solutions. These strategies had twin benefits: They both increased the platforms appeal in the market and helped the company build a network of local supporters and spokespeople with a strong interest in protecting the platforms continued operations. From consumer and data protection concerns to geopolitical issues, tax policies, and old-fashioned competition, there are a variety of ways in which a platform may find a foreign business environment unfriendly especially if it has taken an ask forgiveness, not permission approach to expansion. "> As technology progresses, it has become increasingly easy for reach customers around the globe. As the battle between Lazada and Shopee demonstrates, its critical to empower local managers who are better equipped to understand and adapt to country-specific needs. To be sure, network effects will always be a key driver for globalizing platform firms but our research suggests that theyre not enough to automatically guarantee growth beyond a companys home base. May 17, 2022. Perks of being an Ollanger: empower yourself with flexible working hours become a leader in . But as the firm began developing different versions of its platform to meet the needs of users across multiple countries, it introduced a third tier: the middle platform. And how to overcome them. User Acquisition Strategy. Without the need for costly physical infrastructure, digital businesses are often able to enter foreign markets a lot faster than traditional firms. For example, legal restrictions on short-term rentals have substantially constrained Airbnbs growth in some cities, and even entirely locked it out from others. Share your thoughts about this. Launching so rapidly can mean that these firms end up sidestepping local regulations and evading scrutiny from local stakeholders (whether intentionally or otherwise), disrupting established industries and provoking pushback from regulators, incumbents, and other stakeholders. Launching so rapidly can mean that these firms end up sidestepping local regulations and evading scrutiny from local stakeholders (whether intentionally or otherwise), disrupting established industries and provoking pushback from regulators, incumbents, and other stakeholders. Platform business models typically depend heavily on network effects to expand their user bases. Other platforms, such as Clash, started out by paying all their complementors. 3 Obstacles to Globalizing a Digital Platform. Through this research, we identified three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. Input your search keywords and press Enter. Facebook . From consumer and data protection concerns to geopolitical issues, tax policies, and old-fashioned competition, there are a variety of ways in which a platform may find a foreign business environment unfriendly especially if it has taken an ask forgiveness, not permission approach to expansion. and operational capabilities (e.g., user acquisition, marketing, monetization, customer insights, etc.) This middle platform manages a repertoire of common components and capabilities, ensuring that teams across the business can access the components they need while still retaining the flexibility to adapt these shared resources to meet varying customer needs. Save my name, email, and website in this browser for the next time I comment. But there are obstacles. Earn badges to share on LinkedIn and your resume. For example, in markets where digital payment is not popular, product teams can use the existing payment infrastructure available on the middle platform, but customize it to make cash-on-delivery the default option. into specialized units, allowing global teams to customize and extend these functionalities for their specific needs. Initially, Alibaba followed a traditional, two-tier organizational structure, in which individual teams dealt directly with users and developed operational capabilities on their own, while headquarters allocated resources and support to each team. As Ubers struggles in Europe and parts of Asia illustrate, commercial success is difficult to sustain when local stakeholders are not supportive. "> As technology progresses, it has become increasingly easy for reach customers around the globe. Finally, many platform businesses attempt to lead global expansions with homogeneous leadership teams recruited from their home countries. Many platform businesses rely heavily on network effects to drive their growth. Specifically, we found several common pitfalls that can hinder platforms ability to attract local customers. We executed a series of quantitative and qualitative scientific studies to discover these difficulties, which include analyses of mobile app facts from far more than 50 countries' app suppliers, regulatory filings, and financial commitment records, as well as more than 100 hours of interviews with executives at platform firms these types of as Xiaomi, Dropbox, and ByteDance. Without the need for costly physical infrastructure, digital businesses are often able to enter foreign markets a lot faster than traditional firms. User Acquisition Strategy Platform business models typically depend heavily on network effects to expand their user bases. To navigate this complexity and stay ahead of local rivals while avoiding destructive internal competition and duplicated work, some platform firms have begun adopting a modular structure. May 18, 2022. Headlines Business Markets Cryptocurrency Startups Property YouTube, for example, has been fairly successful in organically attracting both users and complementors across countries, while TikTok has seeded its platform with paid content creators in many international markets. They're Still Expensive. and operational capabilities (e.g., user acquisition, marketing, monetization, customer insights, etc.) This middle platform manages a repertoire of common components and capabilities, ensuring that teams across the business can access the components they need while still retaining the flexibility to adapt these shared resources to meet varying customer needs. Through this research, we identified three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. This ease of access can make scaling up seem effortless after all, vi Read full article. Can We Meet It? We are happy to welcome you to The Pro People Family and share what you have done to inspire you to find your life goal. Since so much of a platforms value is created by its complementors, many of these firms are able to grow very quickly while maintaining a relatively flat organizational structure. 3 May 2022 14:05, Business News. Digital transformation is a hot topic--but what exactly is it and what does it mean for companies? This refers to an architecture that centralizes common product components (e.g., search recommendations, payment systems, algorithms, etc.) ByteDance has adopted a similar architecture, in which its shared-service platform enables global teams and business units to share insights, operational resources, and key assets, without encroaching on their flexibility. 3 Obstacles to Globalizing a Digital Platform. First, while many platforms rely heavily on algorithms designed to automate user acquisition, this isnt a problem you can solve with AI alone. As Ubers struggles in Europe and parts of Asia illustrate, commercial success is difficult to sustain when local stakeholders are not supportive. Previous Post But as the firm began developing different versions of its platform to meet the needs of users across multiple countries, it introduced a third tier: the middle platform. These leaders often have limited familiarity with foreign markets, stymying international growth efforts. The summer school of Digital Methods Initiative is a training programme which deals with innovative research methods in the field of new media studies. Gepostet vor 4th May von Unknown Labels: IFTTT Twitter. While mature platforms attract complementors easily, new platforms may need to invest substantial resources in recruiting these partners. "> As technology progresses, it has become increasingly easy for reach customers around the globe. Specifically, there are three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. Many platform businesses rely heavily on network effects to drive their growth. However, this can be both a blessing and a curse. Launching so rapidly can mean that these firms end up sidestepping local regulations and evading scrutiny from local stakeholders (whether intentionally or otherwise), disrupting established industries and provoking pushback from regulators, incumbents, and other stakeholders. To expand outside an existing network of customers, more concerted user acquisition strategies are necessary. 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. And how to overcome them. Through this research, we identified three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. Specifically, there are three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. For example, Singaporean ride-hailing platform Grab employed a combination of these strategies to push for greater acceptance (and eventually formal legalization) of its business model in Thailand. Platform business models typically depend heavily on network effects to expand their user bases. Specifically, there are three critical areas that platform firms should consider when pursuing international growth: user acquisition strategy, organizational structure, and business environment. In addition, platform businesses must prioritize acquiring not only end users, but also the content creators, streamers, and sellers or complementors that will populate their platforms. 3 Obstacles to Globalizing a Digital Platform. May 23, 2022. For example, in markets where digital payment is not popular, product teams can use the existing payment infrastructure available on the middle platform, but customize it to make cash-on-delivery the default option. Accelerate your career with Harvard ManageMentor. We conducted a series of quantitative and qualitative studies to explore these challenges, including analyses of mobile app data from more than 50 countries app stores, regulatory filings, and investment records, as well as more than 100 hours of interviews with executives at platform firms such as Xiaomi, Dropbox, and ByteDance.
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