Questions
12-1. Which element of Zara’s strategy do you believe best explains its success?
12-2. Assess the difficulty a competitor, such as Gap, faces trying to re-create the resources,
capabilities, and core competencies that define Zara.
TEACHING TIPS: Carefully review the PowerPoint slides for Chapter Twelve, as well as
the opening case regarding Zara, which is cited throughout the chapter.
CLOSING CASE: The Multinational Enterprise of
the Future: Leading Scenarios
Evolving workflows, technology platforms, and market dynamics intensify globalization trends.
MNEs respond in kind, rethinking visions, clarifying missions, adjusting strategies, and
reconfiguring value chains to compete in the brave new world. Now, like the Internet, the
globally integrated enterprise designs its strategy, configures its activities, and coordinates its
processes to connect everything, everywhere, 24/7.
In the future, goes this scenario, world-class operational efficiency will no longer determine an
MNE’s competitive advantage. Nor will an MNE build superior competitiveness from unique
features of its home country or, for that matter, from a set of national subsidiaries. Rather, victory
will go to those who move from designing multinational operations to synthesizing metanational
competencies.
The future frontier for the MNE is set by the matter of size, say others. The average size is falling
—many of the 80,000 plus firms that operate internationally employ fewer than 250 people. This
anomaly signals the era of so-called “micro-multinationals”: nimble, small firms that are born
global, operating internationally from day one.
Advocates of regionalization endorse the awkward term “Glorecalization” as the next logical
step of global strategy. Glorecalization, a portmanteau of
Globalization-Regionalization-Localization, champions a global vision and customized local
tactics through a value chain configured to exploit location economies within a regional
market. The glocalization MNE leverages its regional network to gain the necessary operational
efficiencies without forsaking local flexibility
Another emerging organizational form is the cybercorp, a company that operates exclusively in
cyberspace and is not impacted by the physical geography of lines on a map. Strategically, the
cybercorp looks to develop competences that make it ready to react in real time to changes in its
customers, competition, industry, and environment.
Questions
12-3. You have a choice to work for a globally integrated enterprise, a metanational, a
glorecalized MNE, a micro-multinational, or a cybercorp. Which would you choose? Why?
12-4. Looking out over the next decade, estimate the likely standards of how an MNE will create
value. In your opinion, which form of MNE is best designed for this scenario? Why?
The “globally integrated enterprise” is the future, and it is one that puts investments,
people, and work anywhere in the world based on the right cost, right skills, and the
12-5. The MNE of the future, in whatever form it takes, will face pressures for global integration
along with those clamoring for local responsiveness. In your opinion, which form will best
reconcile that challenge?
ADDITIONAL EXERCISES: The Strategy of International Business
Exercise 12.1. Have the students perform a value chain analysis on Zara. Which of
Zara’s value chain activities create the most value for the company? What are Zara’s core
competencies? (LO: 5, Learning Outcome: To profile the types of strategies MNEs use,
AACSB: Analytical Skills.)
Exercise 12.2. Ask the students to use the five fundamental forces model to analyze one
of the industries listed in the integration-responsiveness grid (Fig. 12.6). Does the pressure
for local responsiveness and/or global integration impact the five forces in the industry they
selected? (LO: 3, Learning Outcome: To assess how managers configure and coordinate a
value chain, AACSB: Analytical Skills.)
Exercise 12.3. Have the students refer to the Fortune Global 500
(http://money.cnn.com/magazines/fortune/global500/). Categorize each of the top five
global firms in terms of strategy types (Fig. 12.7). Ask the students to specify what
information they would need to make an informed judgment on strategy type for any given
company. Have them identify sources of that information. (LO: 1, Learning Outcome: To
evaluate industry structure, firm strategy, and value creation, AACSB: Analytical Skills.)
Exercise 12.4. Select two large multinational enterprises that are known to the students,
one consumer-oriented (e.g., Toyota) and one industrial (e.g., BASF). Then ask students to
discuss the pressures for local responsiveness and global integration faced by each firm.
Which experiences the greater pull toward local responsiveness? Why? Which faces a
greater need for global standardization? Why? (LO: 5, Learning Outcome: To profile the
types of strategies MNEs use, AACSB: Dynamics of the Global Economy.)