Converting Global Presence into a Global Competitive Advantage

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Converting global presence into global competitive advantage "Building global presence gives you the right to play the game. However, it says little about whether and how you will actually win the game. Furthermore, winning one game does not ensure that you will win the next one." . To convert global presence into global competitive advantage, firms must exploit five value creation-opportunities: - Adapt to local market differences

- Exploit economies of global scale
- Exploit economies of global scope
- Tap optimal locations for activities & resources
- Maximize knowledge transfer across locations

Purposeful thinking, systematic analysis and careful orchestration are key to transform global presence into global competitive advantage. Without a disciplined approach, global presence can easily degenerate into a liability that distracts management and wastes resources 1) Adapt to local markets differences

Responding to inevitable heterogeneity. Difference in language, culture, customer preference ..etc. i.e, cell phone product adaptability. benefits in three fundamental areas: Market Share, Price Realization, Competitive Position Challenges

May increase the company’s cost structure and at times, may be misguided.( i.e TGIF experience in Korea). Firms must study local markets carefully detecting customers needs and satisfaction
2) Exploit economies of global scale - expanding firms scale of operation Spreading fixed costs, reducing capital and operating costs, pooling purchasing power and creating critical mass are competitive advantages for a firm applying such actions to convert scale into economies of scale. Challenges

can be realized only by concentrating scale sensitive resources & activities in one or a few locations “ Now if you misjudge the market, you are wrong in 15 countries rather than only one” 3) Exploit economies of global scope - The economic value is enormous when serving global customers Refers to an array of regions or...
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