This article gives a detailed framework for evaluating whether — and how — to globalize an individual firm’s corporate strategy. The author stresses the opportunities for gaining competitive advantage and provides examples of companies that have exploited globalization drivers and strategy levers. He also discusses the relative merits of global and multidomestic strategies in various strategic situations.
T. Hout, M.E. Porter, and E. Rudden, "How Global Companies Win Out," Harvard Business Review, September–October 1982, pp. 98–108.
My framework, developed in this article, is based in part on M.E. Porter's pioneering work on global strategy. His ideas are further developed in:
M.E. Porter, "Competition in Global Industries: A Conceptual Framework," in Competition in Global Industries, ed. M.E. Porter (Boston: Harvard Business School Press, 1986).
Bartlett and Ghoshal define a "transnational industry" that is somewhat similar to Porter's "global industry." See:
C.A. Bartlett and S. Ghoshal, "Managing across Borders: New Strategic Requirements," Sloan Management Review, Summer 1987, pp. 7–17.
2. T. Levitt, "The Globalization of Markets," Harvard Business Review, May–June 1983, pp. 92–102.
3. These obstacles are laid out in one of the rejoinders provoked by Levitt's article. See:
S.P. Douglas and Y. Wind, "The Myth of Globalization," Columbia Journal of World Business, Winter 1987, pp. 19–29.
4. For a more theoretical exposition of this framework see:
G.S. Yip, "An Integrated Approach to Global Competitive Strategy," in Frontiers of Management, ed. R. Mansfield (London: Routledge, forthcoming).
5. The concept of the global strategy lever was first presented in: G.S. Yip, P.M. Loewe, and MY. Yoshino, "How to Take Your Company to the Global Market," Columbia Journal of World Business, Winter 1988, pp. 37–48.
6. K. Ohmae, TriadPower: Tbe Coming Shape of Global Competition (New York: The Free Press, 1985).
7. G. Hamel and C.K. Prahalad, "Do You Really Have a Global Strategy?" Harvard Business Review, July–August 1985, pp. 139–148;
B. Kogut, "Designing Global Strategies: Profiting from Operational Flexibility," Sloan Management Review, Fall 1985, pp. 27–38.
8. P.G.P. Walters, "International Marketing Policy: A Discussion of the Standardization Construct and Its Relevance for Corporate Policy," Journal of International Business Studies, Summer 1986, pp. 55–69.
9. For a discussion of the possibilities and merits of uniform marketing see:
R.D. Buzzell, "Can You Standardize Multinational Marketing?" Harvard Business Review, November–December 1968, pp. 102–113; and
J.A. Quelch and E.J. Hoff, "Customizing Global Marketing," Harvard Business Review, May–June 1986, pp. 59–68.
10. P. Kotler et al., Tbe New Competition (Englewood Cliffs, NJ: Prentice-Hall, 1985), p. 174.
11. Figure 3 is also presented in Yip (forthcoming).
12. M.R. Cvar, "Case Studies in Global Competition," in Porter (1986).
C.C. Markides and N. Berg, "Manufacturing Offshore Is Bad Business," Harvard Business Review, September–October 1988, pp. 113–120.
14. "Can Ford Stay on Top?" Business Week, 28 September 1987, pp. 78–86.
15. Three public sector activities that can protect domestic competitors are blocking access to the domestic market, providing subsidies, and creating spillovers in research and development. See:
MA. Spence, "Industrial Organization and Competitive Advantage in Multinational Industries," American Economic Review 74 (May 1984): 356–360.
16. MY. Yoshino, "Global Competition in a Salient Industry: The Case of Civil Aircraft," in Porter (1986).
17. Levitt (May–June 1983).
18. C. Baden Fuller et al., "National or Global? The Study of Company Strategies and the European Market for Major Appliances" (London: London Business School Centre for Business Strategy, working paper series, No. 28, June 1987).
Yip et al. (1988); and
C.K. Prahalad and YL. Doz, The Multinational Mission: Balancing Local Demands and Global Vision (New York: The Free Press, 1987).