Coursera – Globalization of Business Enterprise

courseraFantastic course!  I was completely incorrect in my understanding of the world – and I was not alone… 🙂  Many people do not completely understand the state of globalization and tend to overestimate it (proponents and opponents of the globalization alike).

The most hilarious term to describe this state is globaloney – and, yes, my head was full of it!

The course highlighted the level of misunderstanding and popularization of common beliefs among business and population in general.  Majority of people believe that the world is closer to being “flat,” what data suggests is rather incorrect.

how-global

The “World 3.0” approach suggests that the world’s interactions are influenced by several factors, which will predict how two particular countries behave in the economic sphere.  Four points comprise the CAGE Distance Framework: Cultural, Administrative, Economic, and Geographic distance.

Cage

The CAGE Distance Framework can be helpful in predication of international expansion of a business and success of this  expansion.

Cage-2

 

Businesses are advised to understand the differences between their company’s home country and potential international expansion and take them into consideration.  The AAA strategy is recommended, when a company can consider all three approaches, but should find one that can differentiate it from its competitors.

  • Adaptation (understanding that the other country is different and adapt approach to its preferences – example is a variety of drinks Coca Cola produces in Japan that are very unique in flavor)
  • Aggregation (combining some approaches for several similar countries, etc. – example is Toyota creating a series of vehicles on a larger frame demanded by US penchant for tracks)
  • Arbitrage (exploiting differences – example of the difference in pay of knowledgeable Indian programmers and their European and American counterparts that allow Indian companies to provide outsourcing services)

AAA

 

One of the interesting parts is difference of the application of approaches by established global companies and emerging ones.

AAA2

One of the major points of the strategy approach is to understand the differences, as many strategies created with significant influence of globaloney on the decision makers.

book

It would be helpful to read the book Redefining Global Strategy to learn more…   It is now on my future reading list 🙂

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