COMPARATIVE ANALYSIS OF SCALING MODELS FOR GEOGRAPHICALLY DISTRIBUTED BUSINESS IN THE INTERNATIONAL ENVIRONMENT

ABSTRACT

The article is dedicated to a comparison of scaling models for geographically distributed businesses in the international environment, with a focus on identifying the key factors influencing model selection. It presents theoretical aspects of business scaling and clarifies the specifics of scaling at the international level. The study identifies barriers, distinctive features, and specific scaling models. A generalized process for selecting a scaling model for geographically distributed businesses is also presented.

АННОТАЦИЯ

Статья посвящена сравнению моделей масштабирования территориально-распределенного бизнеса в международной среде с упором на определение основных факторов выбора модели. Представлены теоретические вопросы масштабирования бизнеса. Уточнена специфика масштабирования на международном уровне. Выявлены барьеры, особенности и конкретные модели масштабирования. Представлен обобщенный процесс выбора модели масштабирования территориально-распределенного бизнеса.

Keywords: business scaling, international environment, geographically distributed business, scaling models, strategic development.

Ключевые слова: масштабирование бизнеса, международная среда, территориально-распределенный бизнес, модели масштабирования, стратегическое развитие.

The development of business in the international environment at the present stage is a promising direction, the relevance of which stems from economic growth and ongoing transformations in the global market. Against the backdrop of accelerating digitalization, the development of international relations, and the expansion of trade boundaries, the entry of companies into foreign markets is considered one of the strategies for business scaling and development. Statistics on the development of international business confirm its growing significance. According to UNCTAD, in the first half of 2025, the global trade volume increased by USD 300 billion, which is explained by the growth of imports to the United States (+14%) and exports from EU countries (+6%). The overall volume of global trade in goods and services shows a positive trend—quarterly growth rates ranged between 1.5% and 2%, and the services sector grew by 9% over the past year, outpacing the growth of goods trade. The export of digital and intellectual services is growing especially rapidly, which emphasizes the need to integrate modern technologies and platform-based solutions when entering foreign markets. An additional factor supporting the feasibility of entering the international arena is the performance of foreign direct investment. Despite an overall decline in the global volume of investment by 11% (to USD 1.5 trillion in 2024), some regions show growth, particularly North America (+23%) and Southeast Asia (+10%). Investment flows are being redistributed in favor of developing economies and those aligned with technological changes [6; 7].

Thus, participation in international business relations enhances the investment attractiveness of companies. Ultimately, the growth potential of a business expands, allowing it to overcome the traditional limitations of domestic and/or national markets. In other words, entry into the international market is currently considered one of the most effective strategies for business scaling. Its successful implementation contributes to an increase in the potential target audience, risk diversification, and, most importantly, greater access to new sources of investment, infrastructure, distribution channels, and the formation of competitive advantages. Under these conditions, the study of scaling models as applied conceptual mechanisms for business development becomes particularly significant. The formation of strategies for entering foreign markets depends on the creation of scientifically grounded models that allow for a systematic assessment of the opportunities, constraints, and outcomes of internationalization. Such models become tools for strategic planning, resource allocation, and organizational transformation of business in the global environment, which has defined the object, subject, and scope of this study.

The aim of this study is to conduct a comparative analysis of scaling models for geographically distributed business in the international environment.

Let us begin by addressing the very concept of scaling. Business scaling (from the English scaling) is the process of increasing the volume of operations, market reach, customer base, and operational capacity without a proportional increase in costs. As noted in the studies by I.V. Artyukhova [1] and I. Mihailova [8], unlike simple expansion, scaling implies the optimization of processes, systems, and models aimed at ensuring exponential growth while maintaining efficiency.

In the context of the international environment, business scaling processes acquire distinctive features—they represent a specific form in which a business goes beyond the national market and becomes integrated into the multilayered institutional, cultural, legal, and logistical environment of foreign countries. When comparing traditional scaling with scaling in the international environment, a number of the most significant differences can be identified (Figure 1).

Figure 1. Differences between scaling at the national and international levels, compiled by the author based on data from [1; 8 and others]

As rightly highlighted in the work of H. Stverkova and M. Pohludka, transnational companies employ a territorial model based on decentralized management and the localization of business functions, which enables them to achieve growth in international markets despite the greater complexity of scaling [9].

International business scaling is examined in numerous studies [2; 3; 5, etc.], whose authors agree on the existence of a system of barriers (Figure 2) — legal, cultural, logistical, as well as those related to the business model and management (pricing models, sales channels, centralization or decentralization of organizational structure, etc.). Notably, I. Mihailova believes that scaling in the international environment is inevitable and is always accompanied by a transformation of the business model; at a minimum, companies change their channels, partner networks, and their own offerings [8].

Figure 2. Barriers and requirements for scaling at the international level, compiled by the author

It should be noted that scaling models deserve special attention, a comparative analysis of which is presented in Table 1:

Table 1.

Comparative analysis of business scaling models at the international level, compiled by the author based on data from [1–9]

Each of the presented models has its own specifics; the choice of a particular model depends on the business situation as well as various influencing factors, examples of which are grouped in Table 2:

Table 2.

Factors determining the choice of scaling model, compiled by the author

The choice of a specific model also depends on industry specifics, the scale of business operations, and other factors; for example, I.V. Artyukhova points out that startups in the early growth phase often choose organic growth or partnership models, whereas mature companies tend to favor mergers and acquisitions deals due to the availability of necessary resources [1]. H. Stverkova and M. Pohludka provide a detailed examination of the territorial model, which is essentially an integrative form of scaling involving components of different models [9].

For geographically distributed business, the choice of scaling model depends on a system of economic, cultural, as well as technological, logistical, and internal factors, the structure of which is presented as follows (Figure 3).

Figure 3. Factors influencing the choice of scaling model for geographically distributed business, compiled by the author

Naturally, the complex conditions of scaling impose increased demands on the combination of models, emphasizing that the decision-making center should assess environmental factors and internal resources, select the optimal model or combination of models, as well as implement localization and support changes. It is important to emphasize that universal scaling models simply do not exist, and the international environment, due to its specifics, consists of a whole system of additional and more dynamic factors. Business scaling in the international environment is based on the development of models that not only replicate the business structure but also adapt to local specifics, synchronizing the global brand with local practices. The primary strategies in this case remain franchising, centralized and decentralized management, as well as the creation of partnership networks. Taken together, the following scaling model can be presented (Figure 4):

Figure 4. Business scaling model selection procedure within the strategic management system, compiled by the author

Thus, the conducted analysis allowed for the formulation of a number of substantive and conceptual conclusions, clarifying both the theoretical understanding of scaling and the practical conditions for selecting a scaling model in the context of business expansion into international markets. Business scaling is a systemic transformation of the organizational model aimed at expanding markets, customer base, and supply channels. Each existing scaling model possesses varying degrees of control, risks, the need for investments, and changes, which makes them non-complementary but applicable depending on the conditions. From the perspective of geographically distributed business, companies operating simultaneously in multiple regions and countries are forced to combine mechanisms of decentralized management with global standardization. The choice of scaling model is influenced by a whole set of external and internal factors, necessitating their sequential consideration and the development of hybrid scaling schemes.

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