Digitalization and its Strategic Implications for the Multinational Enterprise

We have a diverse set of descriptions referred to as the “fourth industrial revolution”, Industry 4.0, or the “digital” or “new economy”, indicating that there is a seismic shift under way. Due to digital transformation arising from the combined effect of several digital technologies including IoT, 5G, cloud, blockchain, big data and artificial intelligence, companies today are being transformed, and for many, this transformation comes in ways that they have not experienced before. This may mean that firms entering new markets with digital technologies may be less dependent on mediators and be able to control the delivery of their products or services, while new entrants are likely to gain advantages from exploiting digital platforms. The chapter lays out how the classic principles of international competitive strategy are transformed in today’s markets due to digitalization and provides suggestions in terms of how firms, and particularly multinational enterprises (MNEs), can respond to these transformations.