Global Business Strategy, 2nd Edition

CHAPTER 2

The Globalization of Companies and Competitive Advantage

Introduction

This chapter considers the globalization of companies and the primary sources of competitive advantage. We begin by considering the pressures on companies to expand globally. Next, we discuss three generic strategies for creating value in a global context: adaptation, aggregation, and arbitrage.¹ Finally, we consider how and why companies globalize in stages. In the first stage of globalization, companies move from a domestic to an international strategy. In the second stage of globalization, commitment to overseas markets increases, and the company adopts a global or a multidomestic strategy. Adopting a transnational strategy defines the final stage of company globalization. ...