Dear friends and colleagues,
The first issue of Global Strategy Journal in 2021 is available at https://onlinelibrary.wiley.com/toc/20425805/2021/11/1.
It contains a special issue on digitalization and global strategy edited by Erkko Autio, Ram Mudambi, and Youngjin Yoo. The issue opens with the introduction to the special issue (Autio, Mudambi, & Yoo) and continues with four articles on computing (Thompson, Ge & Sherry), digital technologies (Sturgeon), platforms (Stallkamp & Schotter), and additive printing (Bouncken & Barwinski). It closes with a regular article on game theory (Hashai & Adler). We hope that you find them insightful!
As always, we look forward to receiving your best work for consideration for publication.
Gabriel R. G. Benito, Alvaro Cuervo-Cazurra, and Ram Mudambi
Co-editors of Global Strategy Journal
Erkko Autio, Ram Mudambi, Youngjin Yoo
Digitalization has three fundamental characteristics, reprogrammability infrastructural elementality, and intangibility. Based on these characteristics, it is transforming how firms organize for value creation, delivery, and capture. Its intangibility and infrastructural character largely free economic and business activities from the constraints of physical geography like those imposed by transportation and collocation. Digital communication technologies typically reinforce the centrifugal forces that favor dispersing the firm's high knowledge activities. Digital in situ technologies strengthen the centripetal forces toward concentrating the firm's low knowledge activities. Location dependence and product modularity are crucial moderators for tangible products, while institutional barriers are important for intangible ones. Finally, digital technologies increase the resilience of firms during disruptive events that impose restrictions on the movements of people and goods, as during the COVID‐19 pandemic.
Neil C. Thompson, Shuning Ge, Yash M. Sherry
The reach of the modern enterprise relies on the power of information technology (IT) tools such as sensors, databases, and machine learning. But tool improvements must be fueled by increased computing power (e.g., faster hardware) or getting more productivity from existing systems (e.g., through better computer algorithms). New research has uncovered that this second source, algorithm progress, is more important than previously realized-sometimes orders of magnitude more important than hardware-and thus could be an important technological stepping‐stone to give competitive advantage to a country's firms. Analyzing this "Algorithm Commons" reveals that the United States has been the largest contributor to algorithm progress, with universities and large private labs (e.g., IBM) leading the way, but that U.S. leadership has faded in recent decades.
Timothy J. Sturgeon
Although computerization has been enabling changes in the structure and economic geography of industries for decades, recent public discourse has become focused on a set of "new" advanced digital technologies and technology applications that appear poised to dramatically reduce demand for routine tasks and transform the organization and content of work. How are these changes shaping the strategic options for companies and policy‐makers in less‐developed economies? This paper disentangles the old and new features of the digital economy; distills three key business strategies underpinning its organization: modularity, open innovation, and platforms; and summarizes some of the benefits and risks for society. It explores the strategy and policy options available for firms and policy‐makers in less developed places, with a focus on innovation and market positioning.
Maximilian Stallkamp, Andreas P. J. Schotter
Digitalization has enabled firms with so‐called platform business models to emerge in many sectors of the economy. By facilitating transactions between different groups of users (e.g., buyers and sellers), platform firms are disrupting industries around the world. However, little is known about the international strategies of platform firms, as research has mostly examined platforms in single‐country contexts. We address this gap by integrating insights from platform research in strategy and economics-specifically the notion of network externalities-with internalization theory. We extend the existing typology of network externalities by distinguishing between within‐country and cross‐country network externalities. We derive testable propositions regarding the foreign entry modes of platform firms, their international strategic posture (multidomestic vs. globally integrated), as well as foreign market selection criteria and market exit.
Ricarda Bouncken, Roman Barwinski
Modern audio‐visual digital technology enables the immediate exchange of explicit, but also of tacit knowledge worldwide. Still, when not embedded in strong ties, the international exchange of tacit and proprietary knowledge becomes risky. Our flexible pattern matching qualitative research approach develops new theory and finds that in the nascent 3D printing industry firms exchange explicit and tacit knowledge globally, even in weak ties. The exchanges seem to be grounded in identification processes with digital technology forming a shared digital identity. We conceptualize the shared digital identity as the collective self‐concept(s) of an in‐group towards the creation, emergence, application, and development of digital technology built on a sense of community, enthusiasm, being part of something special as well as common values and norms.
Niron Hashai, Nicole Adler
A long‐standing void in international business literature is understanding whether and how the internalization choices of competing multinational enterprises (MNEs) affect each other. This paper presents a game‐theoretic, location‐allocation mathematical model that predicts the organizational boundaries of competing MNEs. Given multiple players in the market, the game analyzes the competition between MNEs with respect to market share, yielding Nash equilibria that determine how many MNEs will be left in the market, and whether their production and marketing sites are internalized or outsourced. Results of computational experiments suggest that the internalization choices of profit maximizing MNEs that compete with each other, sharply deviate from the internalization choices ignoring such competition.