Global Advantage Framework
Gain edge via global competition
The Global Advantage Framework highlights the benefits of competing globally, including economies of scale, learning, and reputation. It also identifies sources of global advantage, such as production economies, logistical economies, and purchasing economies. However, it notes that impediments like transportation costs, differing product needs, and established distribution channels can limit global competition.
- Global competition can provide economies of scale and learning
- Differing product needs and established distribution channels can impede global competition
- Governmental impediments can limit global competition
- Identify Sources of Global AdvantageDetermine the sources of global advantage, such as production economies, logistical economies, and purchasing economies.Pro tipConsider the industry's characteristics and the company's capabilitiesWarningBe aware of potential impediments to global competition
- Assess Impediments to Global CompetitionEvaluate the impediments to global competition, such as transportation costs, differing product needs, and established distribution channels.Pro tipConsider the company's resources and capabilities to overcome impedimentsWarningBe aware of governmental impediments that can limit global competition
- Develop a Global StrategyCreate a global strategy that leverages sources of global advantage and overcomes impediments to global competition.Pro tipConsider the company's strengths and weaknesses, as well as industry trendsWarningBe aware of the potential risks and challenges of global competition
The global competition in the television set industry has led to economies of scale and learning, with companies like Samsung and LG dominating the market.
The global competition in the high-fashion cosmetics industry has led to a reputation and credibility advantage for companies like L'Oréal and Estee Lauder.
The concept of global advantage has evolved over time, with the rise of multinational corporations and globalization. As companies expand their operations globally, they can leverage economies of scale, learning, and reputation to gain a competitive edge.