BH077
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What is the best global
strategy for the Internet?
Mauro F. Guillén
Associate Professor of Management and Sociology,
University of Pennsylvania (www-management.wharton.
upenn.edu/guillen/)
The author wishes to thank the Wharton eBusiness Initiative
(WeBI) for funding, and Julia Chinn, Sandy Lee, and Jacqueline
Richelieu for research assistance.
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The Net is a powerful medium
for reaching and servicing
customers around the world.
Companies, however, are learning
that cross-national differences in
No
infrastructure, regulation, language,
buyer demographics and behavior, payment
methods, and currencies pose formidable
challenges to the simple global model of
international operations. Here we examine not
only the opportunities for global integration
but also the needs for local responsiveness,
Do
showing how firms operating across borders
can use the Net effectively as a marketing tool.
Books, music, wines, industrial components,
information and financial services—all serve to
illustrate the potential and the pitfalls of Net-
based selling across borders.
Business HorizonsisCopyright
This document © 2002
authorized for by Indiana
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review use
os
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I t was not meant to be this way. Doing business inter-
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nationally over the Internet is not as seamless as the
click of a mouse might make it appear. Companies
all over the world are waking up to a harsh reality: In the
electronic era, national boundaries do matter—tremen-
dously. Businesses are finding it hard to service the global
e-market as if it were of one piece. Different national reg-
ulations, local consumer preferences and habits, curren-
cies, languages, user demographics, and attitudes toward
op
pricing and quality militate against global Internet strate-
gies that approach all national markets as if they were the
same. At long last (measured in Internet time) companies
like Yahoo!, Amazon, and eBay are recognizing that some
measure of local adaptation to each specific national mar-
ket is a hallmark of a successful, and profitable, Internet
strategy. Yahoo!, for instance, operates 22 country-specific
portals in 13 different languages.
The World Wide Web appears not to be very “global” after
all. Nevertheless, as Gray (2000) puts it, “the marvel of
the Internet is that things can be tailored, focused, and
individualized.” And some companies, like wine e-seller
Chateauonline, are realizing—and banking on—that idea.
The realization that just “going global” won’t cut it seems
at odds with much strategic thinking and managerial
practice regarding the Internet. Years before the Net
became what it is today, Theodore Levitt wrote an influ-
ential article on “The Globalization of Markets” (1983) in
which he proposed that companies ought to standardize
their approach to foreign markets, emphasizing the simi-
larities rather than the differences. Although current tech-
nological, economic, and demographic changes give some
credence to Levitt’s view, it is not at all clear that a global
strategy always delivers the highest profits. In fact, de-
pending on the nature of the product and the industry,
local adaptation may be a better way of making money.
Contrary to conventional wisdom, local responsiveness
may contribute to sustainable profitability for certain
types of goods or services, and in certain Internet markets.
Globalization and the Net are not simply and not always
about standardization and homogenization.
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We are living through a time of reckoning in Internet
strategizing. In particular, many of the pioneering e-mar-
keters jumped on the assumptions that the new medium
changed the relationship between seller and buyer in
favor of the latter, and that geography became increasingly
irrelevant. After all, a company opens a Web site in
Wichita, Kansas, and people all over the world can visit it.
Reality, however, does not seem to fit such oversimplifica-
tions. Recent research on a variety of products and serv-
ices, say Brynjolfsson and Smith (2000), documents that
price dispersion and price discrimination are no lower on-
line than in traditional distribution channels, suggesting
that sellers still have the upper hand. The Net may give
buyers the power to compare prices, but it also gives sell-
ers the opportunity to track buyers’ behavior instanta-
neously and with great accuracy.
yo
It is simply not clear that Internet transactions are more
“transparent” than traditional ones, or that information
asymmetry between seller and buyer is falling. On the con-
trary, online sellers can find ways of turning the power of
this new medium to their advantage rather than the
buyer’s; cookies and data mining come to mind. Moreover,
reputation and branding happen to be every bit as rele-
op
vant—and profitable—in the new economy as in the old,
offering immense opportunities for market segmentation
and price discrimination. In other words, as B2C Internet
sellers pursue growth and profitability, they are dealing
with challenges and opportunities similar to those encoun-
tered by so-called “old economy” firms.
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As for geographical distance and boundaries, the Net poses
myriad challenges that are also fairly similar to those faced
by old-economy firms. The logistics of getting a tangible
good to the customer is just the most obvious, and truly
daunting, challenge—hence, the “clicks and mortar” phe-
nomenon. Fulfilling international orders can become a
nightmare. Forrester Research (2000b) reports that 46 per-
cent of all orders placed by foreign buyers through Web
No
sites located in the United States go unfulfilled. This is bad
news for e-marketers because, as Sawhney and Mandal
(2000) report, the average Web site gets 10 percent of its
orders from outside the US, and some sites more than 50
percent. Some companies have been taken totally by sur-
prise. The CEO of macys.com, for example, observed, “As
soon as we launched our site, 15 percent of our traffic was
international” (Leibs 2000). Yet the firm did not have a
system in place to fulfill foreign orders.
Do
Companies also need to consider different product regula-
tions and currencies. Payment methods and their relative
availability and safety vary widely across countries. Some
take it for granted that most people have a credit card. But
in many Latin American and Asian countries, fewer than
one in five adults has one. And then there is language. Eng-
lish may have become the global language, but it is rarely
non-native English speakers who feel comfortable agreeing
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to complicated terms and conditions of sale in a language
other than their own. Although 80 percent of all Web sites
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in the world are in English, only 50 percent of users have
English as their first language; by 2005, the number will be
less than 30 percent, while 70 percent of all e-commerce
will take place outside the United States.
Even in the more structured and presumably less idiosyn-
cratic world of B2B transactions, e-marketplaces such as
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VerticalNet pursue foreign markets cautiously, often with
the help of a local partner. A recent survey by Forrester
Research (2000b) found that 60 percent of B2B firms had
found it difficult to deal with differences in business prac-
tices across countries. In many cases, they realized that
joint ventures or alliances with local partners were the only
way to do business successfully on an international basis.
Why does geography
matter?
T
he symptoms showing the relevance of geography
in e-commerce are hard to miss. Companies are
setting up dedicated national Web sites, each with
its country-specific layout, language, product offerings,
and advertising banners. Prices are quoted in the local
currency, and special promotions and discounts vary from
country to country. Occasion-based marketing over the
Net is contingent on national peculiarities; Valentine’s
Day, for instance, is not celebrated worldwide. In many
cases, companies use an alliance or joint venture partner
so as to obtain local content, knowledge, and capital. Fig-
ure 1 provides a list of the main dimensions along which
national Internet markets differ from each other. The list
is not exhaustive, but it does capture the most fundamen-
tal differences any e-company with global aspirations
ought to take into account.
Infrastructure
Telecommunication and Internet infrastructures differ
markedly from country to country. Perhaps three aspects
are especially relevant to strategy formulation. First, in-
stalled international bandwidth sets limits on the speed at
which information flows back and forth between a foreign
Web site and a local buyer. One way a firm can react to
these slow speeds is by redesigning its Web site to make
downloading pages less time-consuming. The number of
“click-throughs” necessary to complete a purchase may
also have to be reduced. Second, there are stunning differ-
ences by country in terms of the proportions of users
accessing the Web through a PC, their TV set, or a mobile
phone. In some countries, such as Argentina, fewer than
20 percent of all households have a PC, but more than 50
percent have cable TV. In several European and Latin
American countries there are more mobile than fixed
Business infringement of copyright.
/ May-June 2002
 t
phone lines. A company’s overall Internet strategy needs to Geographical distance
take these differences into account. The third way in which

infrastructure matters is in terms of the cost of Internet
use. In some countries, flat rates for Net dial-up access are
not yet available, making it very costly for buyers to com-
pare prices across many Web sites or to click through a
large number of pages to obtain information or complete
a purchase. Local access costs will affect market growth
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The world may have shrunk as a result of globalization
and the Net, but distance is still measured in miles or
kilometers. “A $27 compact disc can end up costing
almost $200 by the time it reaches certain destinations,”
says Mike Comstock, DHL’s senior vice president for e-
commerce and planning (Leibs 2000). It is hard to under-

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potential, and might indicate that the company needs to estimate the need for smooth and cost-effective distribu-
segment the market in order to be effective and profitable. tion logistics when it comes to fulfilling international
orders for tangible goods. The
ability to deliver physical products
Figure 1 on a timely basis is not the only
Main differences across national Internet markets challenge of online marketers,
however. Processing and restock-
Dimension Examples Relevant for… ing product returns can become a

yo
nightmare, especially given widely
Infrastructure International bandwidth Browsing speed, Web site design different cross-national regula-
Dominant visual interface: Overall strategy, Web site design tions and customer preferences on
PC, TV set, mobile phone return policies. Not surprisingly,
Cost of Internet use Market potential and segmentation,
the Direct Marketing Association
Web site design estimates that only 46 percent of
direct marketing companies with
Geographical Distribution & restocking Fulfilling international orders e-commerce operations fulfill
op
distance logistics accurately and in time international transactions. As the
Language Search engines and directories Making buyers aware of your non-US Internet grows propor-
are local & language specific existence tionally bigger, companies with-
Marketing always takes place Encouraging buyers to like you
out the capability to fulfill foreign
in the buyer’s language orders could be left behind.

Contractual minutiae Keeping buyers happy Language

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Buyer Differences in tastes and Merchandise selection & stocking The world would be very simple
behavior preferences (though perhaps boring) if Eng-
Lack of a culture of catalogue B2C of durables and non-durables lish were the only language. Too
sales many an e-company has ignored
the golden rule of marketing: that
Differences in holiday dates Occasion-based B2C sales marketing activities should always
(e.g., Mother’s Day)
take place in the language of the
No

Price elasticity of demand Market segmentation in B2C customer. Buyers like to purchase
User Proportion of women users B2C of healthcare goods
products and services in their own
demographics language, especially if the purchas-
Proportion of urban users Distribution logistics ing process requires understand-
Payment Means: credit cards, COD, Making sure you get paid ing contractual clauses. Yet more
systems bank transfers than 80 percent of US Web sites
are in English only. There are
Legal & cultural norms Making sure your buyers get what
some technological fixes to this
regarding credit is customary in their countries
problem, including translation
Do

Security B2C objects, browser translation tools,

Currency Quoting prices B2C, auctions and Web site conversion tools.
These automatic solutions, how-
Order payment lag Exchange rate risk exposure ever, can produce inaccurate trans-
Reputation Location of Web site B2C, B2B, infomediaries, lation and generate confusion,
auction sites with damaging results for the
firm’s reputation. Many compa-
Origin of products or B2C of branded goods & services;
services being sold B2B of key supplies
nies, including such powerhouses
as Yahoo!, Lycos, Amazon, and

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Dell, have been forced to set up country-specific sites in
the local language. Dell has translated its site into dozens
of languages, and 20 percent of all sales are now foreign,
a proportion that is likely to increase given that two-thirds
of total computer sales by all vendors are outside the US.
The problems stemming from language differences, how-
ever, are not limited to site design. A potential customer
for a Web site needs to be aware of its existence first.
Unfortunately, most search engines and directories are
specific to a country and operate with terms or keywords
in one language only. Companies cannot assume that
users in a particular country will know how to search for
the company’s Web site using a foreign search engine. A
cost-effective solution is to write a summary page of the
Web site and have it translated into several languages and
yo
indexed with local search engines and directories. Firms
can also try to avoid words altogether by using images
and icons as navigation tools. Notice, however, that colors
have different connotations in different cultures.
Language can pose a fundamental constraint to global e-
strategy unless the firm takes preemptive action. And the
firm may be inundated with e-mails, faxes, or phone calls
op
in other languages, for which customer service representa-
tives with the requisite language skills will need to be
hired. The bottom line is: In the new economy, a com-
pany still needs to maximize the chances that customers
will be aware of its existence, take a liking to its products
or services, decide to buy them, and be happy about the
overall experience—preferably in their own language.
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Buyer behavior
As if language were not enough of a complication, there
are countless differences in tastes and preferences. These
are especially pronounced in the case of “cultural” goods,
such as food, wine, and entertainment. Even consumer
durables are subject to tremendous cross-national varia-
No
tions in tastes. Companies need to consider customer
tastes and preferences when it comes to merchandise selec-
tion and stocking. Portals with online stores are now offer-
ing different selections and special discounts in each coun-
try. Terra-Lycos, the Spanish portal and ISP formerly called
Terra Networks, operates separate Web sites with separate
e-stores in 16 different countries. Country managers are
responsible for merchandise selection and special offers.
President Franklin Roosevelt once referred to the Sears cat-
Do
alogue—not the Constitution—as the best way to convey
America’s success to the world. But the American culture of
“catalogue sales” is not present everywhere. Buyer attitudes
toward direct marketing and distant sales differ markedly
around the world. Mail sales are rare in most countries.
This is an important reason why buyers in many countries
are more reluctant to purchase online than the average
American buyer. Occasion-based sales are also tricky to
standardize worldwide. Mother’s Day, for example, is not
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observed in all countries, and if it is, it does not fall on the
same day and month of the year. Finally, buyers’ sensitivity
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toward price may differ systematically among countries.
Differences in purchasing power, in the availability of
alternative channels, or in the degree of local competition
need to be assessed carefully. In many cases, e-firms are
being forced to adopt country-by-country pricing policies.
User demographics
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Although online populations are growing rapidly
throughout the world, no one should assume that they
are homogenous. For instance, only 10 percent of Internet
users in most Latin American countries are women,
whereas women represent close to 50 percent in the US
and Europe. Companies looking to sell, say, health-care
goods and services online will find it hard to grow sales in
countries with few women Web surfers, since it is women
If dot-coms and incumbents are
to take advantage of the Net as
an instrument for doing business
abroad, they need to understand
the basic dilemma involved in
operating across borders.
who make most of the family decisions on health care.
Similarly, in some countries most Internet users are
located in the major metropolitan areas, which simplifies
distribution logistics considerably. But in other countries
rural users are an important component of the Internet
population. Companies need to anticipate the impact of
demographic characteristics when entering foreign mar-
kets, or risk misallocating resources.
Payment systems
Payment methods and customs vary widely from country
to country. Much e-commerce growth has been based on
the assumption that people have credit cards, but rare is
the country in which most adults have one. In most coun-
tries, more than 75 percent of the adult population do
not. In many countries, even people with a credit card are
reluctant to use it online for security reasons.
The challenges to credit-card-based e-commerce are enor-
mous even in affluent Western Europe. Many buyers and
sellers alike prefer bank transfers or cash on demand. And
let’s not forget that legal and cultural norms of credit vary
significantly throughout the world. In some countries,
Business infringement of copyright.
/ May-June 2002

consumers or business customers expect to obtain credit
easily; in others, sales on credit are rare. Overdue and
nonperformance rates also differ systematically from
country to country, forcing firms to tailor their recovery
efforts. Some companies are making a virtue out of differ-
ences in payment systems. In Japan—where only 10 per-
cent of e-commerce is paid for by credit card—7-Eleven
now offers buyers the possibility of picking up and paying
for products bought online at any of its 8,000 stores.
“This venture, called 7dream.com, could well become the
dominant fulfillment and payment infrastructure for e-
commerce in Japan,” report Sawhney and Mandal.
Currencies
Many Internet companies are also stymied by how difficult
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it is to decide the currency in which to quote prices when
buyers from different countries can visit the Web site. For
example, eBay alienated many foreign customers by quot-
ing prices only in dollars. The auction site has been facing
an uphill battle with entrenched competitors like QXL in
the United Kingdom, Ricardo in Germany, iBazaar in
France, Bidlet in Sweden, or DeRemate in Latin America.
Although the Net is supposed to enable buyers to compare
op
prices instantaneously, different currencies threaten to
derail this promise unless companies develop currency-
specific Web sites, or use their imaginations. Some sites
offer currency conversion engines, but that may just add to
the customer’s frustration when the exchange rate applica-
ble to a particular purchase depends on the payment
method used. It seems that e-companies may have to accept
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the reality of multiple currencies and try to leverage it as a
price discrimination tool. They should also keep an eye on
currency fluctuations, since the time lag between order and
payment exposes them to exchange rate risk.
Reputation
Perhaps the least understood aspect of geography in the
No
Internet age is that customers tend to make inferences
about a firm’s reputation or a product’s quality based on
its national origin. Rare is the buyer who is not apt to pay
a higher price for a Swiss watch, a French champagne, or a
Japanese compact automobile than for substitutes made in
other countries. The Net does not eliminate this “country
of origin” effect. The national origin of the Web site, and
the products and services sold through it, may have a large
impact on customers’ perceptions of its quality and value.
Do
The country associated with the site itself—regardless of
where the server is located—may be of utmost importance
to companies selling information, financial products, and
auctions online. Naturally, in the case of branded goods
the country of origin of the merchandise itself will proba-
bly remain more important than the perceived national
origin of the Web site, and of the products. For commodi-
ties, the reputation and origin of the e-seller may prove
most influential in terms of shaping buyer expectations.
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What strategy is best?
os
A
s we have just seen, the Net poses a litany of cross-
border challenges to firms that intend to use it as a
new instrument for doing business internationally.
Fortunately, many of these challenges are not new. Compa-
nies bumped into national peculiarities long before the
Internet age, and their successes and failures can offer
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guidance in online markets. One type of organization, the
multinational corporation (MNC), is used to wrestling
with the daily complications created by distance, culture,
language, politics, and the like. Traditionally, MNCs have
found ways to adapt to and benefit from national differ-
ences, prosaic as these might be. They can use national
borders as the boundaries of price discrimination policies,
with excellent results in terms of enhanced profitability. Or
they can deploy their assets and employees throughout the
world to engage in cross-border arbitrage and to tap into
the best resources at the most competitive prices, wherever
they may be located. The field of international business
strategy has contributed sound concepts and tools to tackle
the complexities national boundaries generate.
Dot-coms and incumbents alike can learn from the ways
in which MNCs have adapted to cross-national differences
without sacrificing global integration and coherence. It is
important to realize that the extent to which a firm needs
to adapt to local peculiarities depends on the nature of
the product or service it sells. No general recipes can be
proposed, but one can certainly think analytically about
the demands for local adaptation that the nature of the
product or service will place on the firm’s efforts to gener-
ate international sales and fulfill them profitably.
If dot-coms and incumbents are to take advantage of the
Net as an instrument for doing business abroad, they
need to understand the basic dilemma involved in operat-
ing across borders. MNCs are designed to deal with two
conflicting sets of demands. On the one hand, they need
to deliver what the customer wants, even if it requires
costly local adaptation and responsiveness. On the other
hand, they seek to improve operational efficiency by inte-
grating across borders so as not to be outperformed by
local players in each national market. Understanding the
relative importance of local responsiveness and global
integration lies at the core of a successful global strategy
for any firm, including e-companies. Firms will face differ-
ent degrees of pressure for both, depending on the nature
of the product or service. Figure 2 presents the basic
dilemma of international strategy in matrix form.
When adapting to local peculiarities represents the key
competitive advantage, and few gains can be obtained
from global integration (because national markets are
large enough to reap the benefits of economies of scale,
for instance), MNCs pursue a strategy of national differen-
tiation (Cell 1 in Figure 2). Branded packaged goods such
 t
as consumer nondurables,
food, and beer are good Figure
Figure 22

examples of this situation.
Product or service charac-
teristics, however, may be
os
The
The integration-responsiveness frameworkofofinternational
integration-responsiveness framework international strategy
strategy

High
such that there is no real
Transnational cost-adaptive strategy Nationally differentiated strategy

LOCAL RESPONSIVENESS
need to be locally respon-
sive, while efficiency pres- Both efficiency & adaptation Adapting to local peculiarities is
give competitive advantage. main source of competitive advantage.

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sures on a global scale are
• Example: Telecom equipment • Example: Branded packaged goods
the main source of compet- 4 1
itive advantage. Consumer
electronics are an example 3 2
Global low-cost strategy Pure local adaptation strategy
of this situation (Cell 3).
Firms in this industry tend Efficiency is the main source Commodity products not subject
of competitive advantage. to global scale efficiencies.
to adopt a strategy geared • Example: Consumer electronics • Example: Cement
Low

toward global integration

yo
in order to achieve cost cuts
High Low
and to be able to invest GLOBAL INTEGRATION
large sums of money in
R&D. Adapted from Bartlett (1986) and Prahalad and Doz (1987)

Cells 1 and 3 pose no

intrinsic dilemma to the extent that competitive advan-
tage derives only from global integration, or only from
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local responsiveness. But when both integration and
responsiveness are equally important sources of competi-
tive advantage, then the firm needs to strike a strategic
and operational balance between the two. The telecom
equipment industry is generally presented as an example
of such competing demands on the firm (Cell 4). The
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3). Examples include clothing, used cars, collectible art,
and goods offered through online auctions. Internet com-
panies selling look ‘n’ feel goods need to choose national
markets carefully, making sure there is enough growth
potential to justify a strategy of playing to the peculiarities
of each market without sacrificing efficiency.
Despite their obvious cultural character, such goods as
books, CDs, and videos have become global commodities,

solution to such a conundrum is hardly obvious or easy.
A flexible, malleable, and extremely dynamic transna-
tional matrix organization is required for a firm to be able
to obtain responsiveness and integration simultaneously.
Finally, when neither local responsiveness nor global inte-
gration provides competitive advantage, a strategy of pure
local adaptation is generally followed, the example being
commodity products such as cement (Cell 2).
No
just like industrial components. The MNC selling such
goods over the Net would be wise to pursue the opposite
strategy to that proposed for look ‘n’ feel goods (Cell 3).
Here the challenge is to be cost-effective in order to offer
a wide selection of goods at the most competitive prices.
The name of the game is to seek and exploit economies of
scale and scope by integrating globally across national
borders, thereby developing a distinct competitive ad-

vantage over e-sellers that have a presence in just one

national market and whose main strength is to customize
International strategies their offerings. The global low-cost strategy represents the
main competitive edge that firms such as Amazon or Dell
for the Net have over purely local competitors. They tend to empha-
size standardized Web sites and selling conditions while

G
oods and services sold over the Net also differ sys-
still adapting to certain local peculiarities, though without
tematically in the extent to which they may force
sacrificing efficiency. Commodities can also be local in
a firm to be locally responsive, globally inte-
the sense that cross-border barriers or sheer geographical
Do

grated, or both (see Figure 3). Products whose features

and performance are best examined directly by the cus-
tomer will require a great deal of local responsiveness in
terms of Web site design, local language and currency,
examination and return policies, and payment options, as
well as in terms of investments in customer service. Such
“look ‘n’ feel” goods and services require companies to
implement nationally differentiated strategies, but do not
always require strong global integration (Cell 1 in Figure
distance renders attempts at global integration futile.
Examples include produce and Internet dialup access serv-
ices (Cell 2).
Truly cultural or regulated goods and services are perhaps
the only category that clearly requires both high local
responsiveness and high global integration (Cell 4). On-
line sellers of wines, financial products, or information
understand that national tastes, preferences, and regula-

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 t
tions force them to tailor
their strategy to each market, Figure
Figure 33

os
while a global scale may Global
Global Internet
Internetstrategies
strategiesaccording
accordingtoto
nature of of
nature good or or
good service being
service soldsold
being
allow them to cut costs while
offering a wide selection of

High
products and services, thus

LOCAL RESPONSIVENESS
outperforming purely local Cultural or regulated goods & services Look ‘n’ feel goods & services
players. A transnational cost- (Transnational cost-adaptive strategy) (Nationally differentiated strategy)

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adaptive strategy is best for Examples: Wines, financial Examples: Clothing, used cars,
products, information collectible art, auctions
these kinds of goods and
services. It will be expensive, 4 1
though, because it requires 3 2
customizing Web site design, Global commodities Local commodities
languages, currencies, pay- (Global low-cost strategy) (Pure local adaptation strategy)
ment methods, and examina- Examples: Books, CDs, videos, used Examples: Produce, Internet access
records, industrial goods & components
tion and return policies
Low

yo
while offering a wide range
of products and services at High Low
low prices. GLOBAL INTEGRATION

enter a few markets at first and leave others for later, or

Sequence and speed seek local partners that can take care of the distribution. If
of global expansion
op
language is a key impediment, the firm may want to target
markets for which English is a working language. Later, it

A
n analysis of products’ demands for local respon-
siveness and global integration is only the first of
several key questions companies need to address
to be internationally successful on the Net. If local re-
sponsiveness is a must, then the firm needs to decide
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can start translating the Web site into different languages
following an order of decreasing market size or growth. In
general, consultants and analysts agree that firms need to
focus on the high-potential markets first in order to avoid
spreading themselves thin across too many markets.

which markets to tackle first. Even on the fast-paced Net,

there is time to choose a sequence of foreign market entry Any decision on entry sequence needs to be accompanied
that makes sense for the company. If building up distribu- by an analysis of the competitive dynamics affecting the
tion logistics worldwide is costly, the firm may want to firm. The speed of foreign market entry depends heavily
on what competitors
might already be
doing or may do in
WEB response to the
No

TOUR Resources on the Net and local responsiveness firm’s own moves.
Experienced interna-
● www.altavista.com Offers language browser ● www.lisa.org Web site of the Localization tional e-marketers
translation tools Industry Standards Association, which offers argue that a strategy
assistance to companies attempting to enter of dominance on a
● www.ebusinessforum.com Contains a wealth
foreign markets via the Net country-by-country
of information on the telecommunication and
Internet industries of more than 100 countries ● www.nielsen-netratings.com Statistics on basis, or of a specific
the 10 most visited Web sites by country region of the world,
● www.glreach.com Maintains an International is preferable under
Online Marketing Center with useful articles ● www.nua.ie/surveys/how many online/
Do

two conditions:
and links index.html Statistics on Internet use by
(1) when customer
country and year
● www.idc.com Reports on the "Information tastes and prefer-
Society Index," a composite measure of Internet ● www.telegeography.com Maps and charts ences vary among
development by country describing the worldwide growth of the Net countries, and (2)
● www.itu.int/ti Statistics on a number of tele- ● www.worldlingo.com Offers language trans- when supply-chain
com indicators by country, including the num- lation objects and browser translation tools and distribution
bers of Internet users and hosts free of charge logistics are impor-
tant to success. In

This
What document
is the is authorized
best global for educator
strategy review use only by MANSOOR AHMED, ${institution} until Jan 2024. Copying or posting is an infringement of copyright. 45
for the Internet?
Permissions@hbsp.harvard.edu or 617.783.7860

other words, it is precisely when pressures for local
responsiveness are high that a strategy of establishing a
dominant position makes sense. At the same time, build-
ing local capabilities in response to local peculiarities is
an arduous process that is hard to achieve quickly in sev-
eral countries at once. Thus, the Net poses a big challenge
if the products being sold require local responsiveness.
E-marketers also argue that a strategy of building the com-
pany’s presence globally and as quickly as possible makes
more sense “when the business does not involve deliver-
ing orders, and when the business model can be hijacked
relatively easily by local competitors” (Sawhney and Man-
dal). For those reasons, portals and B2B e-marketplaces
are good examples of companies that need to move fast. It
is interesting to note that the first companies to expand
yo
abroad consciously were such portals and infomediaries
as Yahoo!, Excite, and Lycos. E-marketers of global com-
modities such as Amazon and eToys came next. Now it
seems to be the turn of B2B e-marketplaces.
T he Internet manager—whether at a dot-com or at
an incumbent firm—must keep in mind that suc-
op
cessful globalization requires making decisions
that go beyond the mere “Let’s go global” call to arms. The
question of whether companies can use the Internet as a
global medium is not a rhetorical one. Neither is it merely
of academic interest. As the Web spreads throughout the
world, a company’s future may depend on how success-
tC
fully international opportunities are pursued. The point is
not whether going global is possible or necessary, but
rather what type of global strategy will prove most prof-
itable for a firm. Now that growth and market share are no
longer the yardsticks of performance among e-companies,
perhaps we can start talking about what might be the most
profitable global strategy in the Internet age. The basic
message is clear: Making money internationally depends
No
on how well a firm understands and balances the pressures
for local responsiveness and global integration. ❍
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