Changes in Internationalization Strategy: Differences between Platform Based Enterprises and Traditional Production Based Enterprises

Abstract

In the digital age, many companies intend to expand to foreign countries. Nevertheless, the internationalization strategy of platform firms is distinct from that of traditional manufacturing firms to some extent, as the former provides digital products, and the latter offers physical products. This paper explained various internationalization strategies between both types of enterprises based on the OLI Framework. By analyzing the cases of Adesemi and Celtel, a case study approach was employed, where Adesemi is a traditional manufacturing firm that deals with the sale of public telephones, while Celtel is a platform firm that deals with the sale of mobile packages. It compared both companies in the same industry that expanded to the same region and country and adopted different strategies. Eventually, the conclusion was made. While determining their internationalization strategies, platform firms have fewer restrictions than traditional production-based firms. Consequently, platform firms are more inclined to adopt a greenfield mode of entry. In contrast, traditional manufacturing firms are more inclined to pursue a more prudent internationalization strategy, namely selecting a host country or entering the market by means of joint ventures or acquisitions. This study has significance for platform firms and traditional production-based firms with the ambition of internationalization, as it can be the reference for these companies to select proper internationalization strategies during their expansion overseas.