And this comes from the idea of the world being increasingly flat.
In other words, because of global competition and
technology and a variety of factors the opportunity to attempt
some sort of an international strategy is easier than ever.
I think that's true.
So that's what we mean by global integration.
What do we mean by local responsiveness?
Well, this is sort of the flip side of that.
And this comes from the perspective that says, well, as you take a closer look at
these different foreign locations that you might do business in, it turns out that,
yeah, from a ways away it may seem flat, but from up close it seems kind of lumpy.
In other words, there's a higher degree of local responsiveness that might be
required in order for
a business organization to succeed in that new location.
So in other words, there's some things that might make internationalization
a little bit more difficult.
So generally speaking, there's a tension between these two ideas.
And some industries experience high benefits of global integration.
Other industries place a high premium on local responsiveness.
Generally speaking, as one goes up, the other goes down.
Not always, but often times these ideas are in tension.
So we can essentially take these two ideas and
put them on different axis to sort of put some sort of analytical chart on them.
So on one axis we have global integration,
on the other axis we have local responsiveness.
And maybe the first step here is to think about how industries differ.
As I mentioned, some industries place a premium on global integration.
Others might place a premium, or
realize a lot of advantages, from local responsiveness.
So industries might differ.
So perhaps the first step here is to understand the industry or
market segment that you're focused on, and where you would put it on this diagram.
Is it an industry that favors global integration and could
really take advantage of standardization and centralized production, or
is it an industry that places a large premium on local responsiveness?
So again, we could think of a number of different industries and we could place
them here based on how we would analyze them based on these two criteria.
So industries like airplane manufacturing or agriculture,
those might be industries where there's a high premium placed on global integration.
There's not a lot of national differentiation between products, or
we might produce them from certain locations where it's especially
easy to produce those products.
That's easy to transport them around the world and
therefore global integration might be highly beneficial in those industries.
On the other hand, you might think of industries like consulting or frozen food.
These are industries that might place a higher premium on local responsiveness.
The same kinds of frozen dinners that are for sale in Russia might be very different
from the kinds of frozen dinners for sale in, say, Venezuela.
So the first step is to just understand how your industry or market segment might
differ on these two criteria, because that might help lead you to certain conclusions
about how you ought to pursue an internationalization strategy.
Now, one thing to remember is that scoping the industry, or
the market segment is itself kind of an interesting and complicated idea.
You can scope it more narrowly or more broadly, and that will have implications
for what sort of insights you gain from an analysis like this.