Published by:
Harvard Business Publishing
Length: 11 pages
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Abstract
Some manufacturers hold and even increase profitability against international competitors because they change from a multidomestic strategy, which allows individual subsidiaries to compete independently in different domestic markets, to a global one, which pits the company''s entire worldwide system of product and market position against the competition. Before forging a global strategy, a company that recognizes its business as potentially global should consider the following: what kind of strategic innovation might trigger global competition, what is the best position to establish among all competitors to defend the advantages of global strategy, and what kind of long-term resources will be required to establish the leading position? The examples of three companies (Caterpillar, L.M. Ericsson, and Honda) that successfully forged global strategies illustrate how companies can change the rules of international competition to their favor.
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Abstract
Some manufacturers hold and even increase profitability against international competitors because they change from a multidomestic strategy, which allows individual subsidiaries to compete independently in different domestic markets, to a global one, which pits the company''s entire worldwide system of product and market position against the competition. Before forging a global strategy, a company that recognizes its business as potentially global should consider the following: what kind of strategic innovation might trigger global competition, what is the best position to establish among all competitors to defend the advantages of global strategy, and what kind of long-term resources will be required to establish the leading position? The examples of three companies (Caterpillar, L.M. Ericsson, and Honda) that successfully forged global strategies illustrate how companies can change the rules of international competition to their favor.