MIT Sloan Management Review

Senior executives weighing strategies appropriate for today’s global economy will hear contradictory advice. Some say you need to move quickly, before competitors, to establish a worldwide presence; others cite data showing that this approach is often less profitable. The reality is that neither approach is appropriate for every circumstance. Therefore, executives need to understand when to pursue one route and when to pursue the other.

In a global economy, sustained competitive advantage arises from tackling social, political and environmental issues as part of a corporate strategy — not just pursuing business as usual.

Conventional wisdom suggests that, all else being equal, a company favored by politicians should have a leg up on its competition, or at least be no worse off. Perhaps not, suggest two associate professors at Georgetown University’s Edmund A.

Knowledge sharing between partners has more upsides than downsides, provided that the right kind of knowledge goes back and forth.

Competing in China is the only option for multinationals that want to build or preserve their global position.

Though competitive barriers in Asia, Latin America and Eastern Europe are many, a look at the companies that are thriving there reveals some secrets that make success more likely.

Innovation in developing markets has less to do with finding new customers than addressing issues of product acceptability, affordability, availability and awareness.

How can executives prioritize their time to ensure that they are focusing on the countries and subsidiaries that need the most attention?

A comparison of two Mexican factories suggests that global companies should go beyond monitoring codes of conduct and attack the problem of poor working conditions at its source by collaborating with their suppliers to implement new management systems.

An increasing number of U.S. companies are outsourcing information technology and professional service jobs to offshore locations to reduce costs and take advantage of global skills.

Multinationals are finding it increasingly important to match the strengths of their subsidiaries’ host economics to their strategic needs.

There is a consensus among futurists that business is the only institution capable of providing effective global stewardship. As a result, a good deal of attention is being paid to mapping the future performance of businesses and the economies in which they operate.

A decade ago, multinational companies seemed poised to dominate in China. Today that picture has changed. Whereas IBM, HP and Compaq had quickly won more than 50% of the personal computer market, for example, Chinese company Legend Group Ltd. is now the number one supplier. Research in 10 industries over the last 10 years reveals a pitched battle of competencies between multinational and local players and points to five strategies that can help multinationals regain the edge.

Sellers have a view of their industry that their customers lack. But by sharing their unique knowledge, they can win loyalty and improve their pricing power.

Emerging markets (EMs) constitute the major growth opportunity in the evolving world economic order. Their potential has already effected a shift in multinational corporations (MNCs), which now customarily highlight EM investments when communicating with shareholders.

Gray market goods — brand name products sold through unauthorized channels — are an increasing threat to multinational companies. The authors present a framework to help select the right approach to coordinating price-setting decisions on the basis of a subsidiary’s local resources and the complexity of a product’s market. Examples of price coordination methods are provided.