Online internationalization and domain name strategy: Research on internet domain names as a source of competitive advantages

Lars Miguel Sandborg Lima

Student thesis: Master thesis


The internet has radically altered the conditions for MNEs conducting internationalization. Online market entry costs are comparatively much smaller than their offline counterparts. Setting up a website and developing appropriate functionality can be costly, but the cost fades compared to setting up an international line of physical retail locations, finding local suppliers and all the other necessary steps needed to complete a traditional internationalization process. Furthermore the internet has allowed MNEs to simplify the consumer targeting process. Instead of using regional outlets they now have the possibility of assembling the global consumer base into one virtual location. This new arena of modern business has also entailed a new pool of competitive advantages. Traditional advantages such as manufacturing assets and employee expertise has not lost its significance. But it is joined by new online specific resources. Chief amongst these are internet domain names. Domain names are increasingly being used in branding efforts. This is understandable since it allows companies not only to communicate its product name and characteristics, but also instantly convey a retail location. Consumers can view a commercial and seconds later be in a virtual location that allows them to instantly purchase the product or service. This paper examines internet domain names as a source of competitive advantages. Using internationalization theory, the peculiarities of online internationalization are examined and the rationale behind internationalization is discussed. The theory is used to extrapolate domain name specific business attributes that are determinate for successful online internationalization. To document the value of domain name strategy the growth in the E-commerce sector is analyzed and quantified. Growth in E-commerce has previously been fueled by spending from American consumers, but future growth indicators such as internet penetration rates and E-commerce spending, points towards Asia and the BRIC countries as the future champions for online consumption. By using case material collected from market innovators and consumer feedback, domain name strategy is discussed and best practices identified. Cases include online innovators such as the Disney Corporation. Disney is increasingly capitalizing on the inherit benefits of generic domain names. In lieu of redirecting their category killer domain names such as,, to the network, they are now developing independent websites. This is done to both capitalize on the search engine benefits, but also brand their business units to a wider audience. It is found that the makeup of a domain name has a large significance for inherit consumer trust. Choosing a keyword domain name based on a local domain extension will carry more consumer trust than a brandable domain name on a global generic domain extension. Finally the domain name industry is studied in depth, by looking at the key stakeholders and institutions. Domain selection criteria are discussed and domain acquisition strategy touched upon in order to prepare corporate managers for domain name specific strategic considerations.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2011
Number of pages100