This study examines the process and mechanisms of realized international scaling of born-digital firms through the business model lens. In an explorative multiple-case study of Finnish firms in cultural industries, it finds that born-digital firms adapt their business models through an iterative process to achieve practically scaled operations. The research unpacks the mechanisms guiding the process of business model adaptation and highlights the role of dynamic capabilities in their employment. The findings extend existing theorizing on scaling by offering a conceptualization of realized international digital scaling and the role of the business model in its implementation.

Introduction 

Scaling is increasingly considered a key strategic objective of digital firms across the globe (Financial Times, 2021; Sullivan, 2016). The importance of this real-word phenomenon has attracted the interest of scholars in international business (IB) and entrepreneurship (IE) fields, leading to increased efforts to develop its theoretical foundations (Giustiziero et al., 2021; Reuber et al., 2021; Shepherd & Patzelt, 2022).

International scaling is related to topics that have already been studied in extant literature, such as the expansion of high growth ventures (Durufl´e, Hellmann & Wilson, 2017; Rasmussen et al., 2018), internationalization of lean entrepreneurial firms (Autio & Zander, 2016), and the speedy expansion of born-global firms (Hennart, 2014). Yet only recently have works initiated a dialogue on international digital scaling as a phenomenon that has unique mechanisms, challenges, and organizational context condition (Piaskowska et al., 2021; Tippmann et al., 2022b). Digital technologies have triggered unprecedented possibilities for international scalable expansion by decreasing transportation and production costs and developing platforms enabling instant global expansion and connectivity (Adner et al., 2019; Autio et al., 2018). Born-digital firms, or firms that are fully digital from their inception (Monaghan et al., 2020) are assumed to be readily scalable due to their ability to achieve economies of scale in core business processes. In other words, digital firms are believed to have scalability that depicts “how the value derived from a firm’s resource bundle in a focal activity changes as the size of the bundle increases” (Giustiziero et al., 2022: 2). Yet, despite the enabling power of digital affordances, and global “by default” mindset of born digital firms (Birkinshaw, 2022), some studies highlight that digitalization does not automatically guarantee occurrence of scaling and there is a variation amongst digital firms in achieving wide international presences (Stallkamp et al., 2022). There are also indications of organizational challenges associated with international scaling. While young firms often struggle with managing the organizational design during the scaling process (DeSantola et al., 2022), MNEs experience pressures of conflicting strategic demands in implementation of replicable innovation scaling strategy (Tippmann et al., 2022b). The extensive evidence also indicates that many digital firms fail to scale (Gulati & DeSantola, 2016; Kutcher et al., 2014; Scale-Up Europe, 2016).

Conclusion 

This research enriches knowledge in the scaling and business model fields by offering empirical insights into the concept, process and mechanisms of realized international scaling of born-digital firms through the lenses of the business model and dynamic capabilities. The research framework shows how the dynamic process of business model adaptation takes place after market launch and leads to scaled operations of born-digital firms. While scholars often define born-digital firms as being readily scalable (Monaghan et al., 2020), this research uncovers the ‘work’ behind practically scaled born-digital firms and offers an empirically based definition of realized digital scaling.