The internationalization process of digital service providers – The role of an intermediary

Abstract

The rise of technological development has changed the conditions for companies internationalization process. Today, smaller firms are able to quickly internationalize on a global scale with the help of digital innovations, which questioning former traditional internationalization theories. The amount of service firms is emerging and expanding abroad more than ever before, especially within the digital service provider sector. They lack geographical boundaries and are born into a global digital environment. However, operating on a global basis does not mean having direct access to local markets. Still, traditional exporting via foreign intermediaries is recognized as one reliable method when expanding into new markets. The incentives for companies to reach out to intermediaries are primarily the lower financial risk together with the valuable local market knowledge that the foreign intermediates possess. Nevertheless, internationalization processes today are frequently relying on relevant studies conducted within the manufacturing industry, creating a theoretical gap between current internationalization behaviour and the new area of digital service providers. The findings from this study will show how internationalisation unfolds when dealing with intermediaries in the DSP sector and what significant role the intermediaries play. Our contribution to the internationalization literature concerning intermediaries within the DSP sector includes their willingness to internationalize mutually on new markets. Finally, this study illustrates the importance of access to local networks in order to scale internationally. Since DSP’s have no geographical rootedness, intermediaries provide DSP’s with access and local knowledge to easier expand into new markets.