The article Harnessing the Best of Globalization focuses majorly on how businesses can leverage globalization for their success. It focuses on three most important sections. First, it identifies different business models for global expansion. Then, it highlights the best practices that can support managers in globalizing their businesses, which range from designing the company for the local environment to leveraging global network effects. Also, the article examines the increased operational complexity of global ventures and how considering the trade-offs between the benefits and costs can aid managers to find the optimal global footprint for their businesses. The article draws from successful global companies such as Airbnb, Uber, and Upwork Global Inc. to develop its concept.
Models for Global Expansion
The article identifies two business models that businesses can use to leverage globalization. The first approach involves globalizing the best that the entity can offer. In this approach, the core focus is on how globalization can improve the existing business's products and profit formulas. According to the article, this model is the traditional approach to globalization that a majority of companies use where they take existing products or services to new markets. The second model involves harnessing the best that the world has to offer. The article uses Airbnb, Upwork, Alvogen Inc., Rocket Internet, and Bloomberg's New Energy Finance as examples of innovators who applied this model to create successful global businesses. The familiar concept among these companies is that they all identified a worldwide opportunity and set out to harness it. For example, Upwork focused on the substantial differences in wage rates and talent availability to connect companies and contractors.
The article then asserts that, with any global businesses, the natural initial step is to identify the factors being globalized such as labor, products, sources of finance, or ideas and technologies. The next step is to ask under which business model the venture falls. According to the article, determining this help the management establish how the investment will operate, the key factors that will govern its success, and the type of management and leadership it will need.
What Companies Can Do
The article outlines a set of best practices that can help managers pursue global expansion successfully. Specifically, it argues that entities must learn how to take advantage of the local and global network effects that surround global ventures. Moreover, the significant profitability and strategic advantages accrue to business that can establish large=scale network effects. Then it asserts that companies must recognize the importance of customizing business models to the particular geographies the company seeks to enter. Customization provides an opportunity for sustained advantage. Finally, the business should identify companies to partner with and manage their partnership efficiently. Furthermore, global ventures are sometimes enabled by partnerships with other global entities.
Integrating the Pieces
The article stresses that globalization needs balancing the benefits that accrue from business-model advantages against the accompanying costs. The essential ways a business can attain this is through investing in alignment company objectives and ensuring that the top management team reflects the global market. Also, the company needs to create employment practices and an organizational culture that operates efficiently across countries. However, the article concludes that it is crucial for entrepreneurs and corporate leaders to analyze their global ventures to develop clear expectations and decision-making processes in the global business platform.
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