Basis of Global Strategies: 2 Models

• Porter’s
• Yip’s
International vs. Global
• International – carrying out business across
national borders

• Global
– Customer needs are similar internationally
– Compete in globalized industries
– Locate value-adding activities in places world-wide
where the greatest competitive advantage can be
made
– Integrate and coordinate international activities
between countries
Porter and Multidomesticity

• According to Porter, a company is:

– Multidomestic if competition in each nation
is independent
– Global if the competition is global
Yip’s Framework
• The extent and degree of globalization depends on 4
drivers
– Market drivers
– Cost drivers
– Government drivers
– Competitive drivers

• Each driver should be analyzed for the industry and

market under consideration

• Helps determine which features of a strategy are global,

and which are locally adapted
Yip’s Framework
Market drivers

Industry and Market Government

Cost drivers Globalization drivers

Competitive drivers
Summary of Globalization Drivers
Market drivers
▪ common customer needs
▪ global customers
▪ global distribution channels
▪ transferable marketing
techniques
▪ a presence in lead countries
Government drivers
▪ favorable trade policies
▪ compatible technical standards
▪ common marketing regulations
▪ government owned competitors
and customers
▪ host government concerns
Cost drivers
▪ global scale economies
▪ steep experience curve
▪ sourcing efficiencies
▪ favorable logistics
▪ differences in country costs
▪ high product development costs
▪ rapidly changing technology
Competitive drivers
▪ high exports and imports
▪ competitors from different
continents
▪ interdependence of countries
▪ competitors globalized