How to establish global presence, then achieve and sustain a competitive advantage
As Jeffrey Garten explains in the Foreword, this Second Edition offers “not only updates, not only new examples, and not only a more confident analysis. There are three entirely new chapters.” Given all that has happened since the first edition (2001), these are indeed welcome additions. Anil Gupta, Vijay Govindarajan, and Haiyan Wang focus on four tasks essential for any company to emerge and stay as the globally dominant player within its industry:
1. “One, people must ensure that their company leads the industry in identifying new marketing opportunities worldwide and in pursuing these opportunities by establishing the necessary presence in all key markets.”
2. “Two, people must work relentlessly to convert global presence into global competitive advantage.”
3. “Three, people must cultivate a global mindset.”
4. “Four, in developing global strategies, people must take full account of the rapid growth of emerging markets, in particular the rise of China and India.”
As the co-authors would be the first to acknowledge, it is quite easy to offer prescriptions such as these. Presumably they agree with Thomas Edison: “Vision without execution is hallucination.” After briefly but precisely identifying the “what” of “transforming global presence into global competitive advantage,” the authors devote the bulk of their attention to explaining the “how.” They intended that their book be broad in its coverage of issues relating to the creating and exploiting of global presence, and, that each chapter would focus on a specific action-oriented issue such as building global presence, cultivating a global mindset, or the dynamics of global business teams.
While citing real-world initiatives by several dozen exemplary companies (e.g. Cisco Systems, FedEx, Hewlett-Packard, IBM, Ikea, Marriott, Microsoft, Nucor, Procter & Gamble, and Wal-Mart), the authors address key questions, issues, and challenges such as these:
• Which five imperatives drive the pursuit of global expansion
• Under which conditions is accelerated global expansion more appropriate?
• When location decisions are made, which criteria should be considered?
• Which four factors drive the speed with which to cultivate a global mindset?
• What are the most common barriers to effective and efficient knowledge transmission?
• What are the primary reasons for the failure of a global business team (GBT)?
• How to overcome communication barriers within a global organization?
• What is a “two-track strategy” and why should it be executed in both China and India?
Gupta, Govindarajan, and Wang are to be commended on the wealth of information they provide and, especially, on the rigor of their analysis of that information. All three are pragmatists. What has worked for other global companies that have transformed their global presence into global competitive advantage? What lessons can be learned from those initiatives? In this context, I am reminded of what Peter Drucker once observed: “We spend a lot of time teaching leaders what to do. We don’t spend enough time teaching leaders what to stop. Half the leaders I have met don’t need to learn what to do. They need to learn what to stop.”
All of the observations and suggestions that Gupta, Govindarajan, and Wang include throughout their narrative share a single purpose: To guide and inform the process by which correct decisions can be made, decisions that will address what not to do as well as what to do. Although their book is a “must read” for C-level executives in companies that seek to transform their global presence into competitive advantage, I think it should also be read by C-level executives in other (non-global) organizations that are within the supply/value chain of those companies.