This book looks at the opportunities and risks associated with stakingout a global competitive presence and introduces the undamentals o global strategic thinking. We defne crating a global strategy in terms o change—how a company should change and adapt its core (domestic)business model to achieve a competitive advantage as it expands globally.The conceptual ramework behind this defnition has three undamentalbuilding blocks: a company’s core
, the various
a company needs to make as it globalizes its operations, and a rangeo
or creating a global competitive advantage. We use Pankaj Ghemawat’s well-known
“AAA Triangle” framework
to describe three generic approaches to global value creation.
strategies seek to increase revenues and market share by tailoring one ormore components o a company’s business model to suit local require-ments or preerences.
strategies ocus on achieving economieso scale or scope by creating regional or global efciencies; they typically involve standardizing a signifcant portion o the value proposition andgrouping together development and production processes.
is about exploiting economic or other dierences between national orregional markets, usually by locating separate parts o the supply chain indierent places. A
is simply a description o how a company does busi-ness. It has our principal components: (a)
, that is, who its customers are, how it reaches them and relates to them; (b)
, or, what a company oers its customers; (c)
, that is, with what resources, activities, and partnersit creates its oerings; and fnally, (d) its
, how itorganizes and coordinates its operations.Globalization requires a company to make strategic decisions abouteach component o the business model.
include choosing which specifc
to serve, domestically