Globalization is misunderstood—it does not, and has never, existed in terms of a single world market with free trade.
Triad-based business is the past, current, and future reality.
Multinational enterprises operate within triad markets and access other triad markets; they have regional, not global, strategies.
National governments strongly regulate most service sectors, thereby limiting free market forces; the extent of regulation is not decreasing.
Businesses need to think local and act regional; they should forget global.
Introduction: The Myth of Global Strategy
Recent research suggests that globalization is a myth. Far from taking place in a single global market, most business activity by large firms takes place in regional blocks. There is no uniform spread of US market capitalism, nor are global markets becoming homogenized. Government regulations and cultural differences divide the world into the triad blocks of North America, the European Union, and Japan. Rival multinational enterprises from the triad compete for regional market share and so enhance economic efficiency. As a result, top managers now need to design triad-based regional strategies, not global ones. Only in a few sectors, such as consumer electronics, is a global strategy of economic integration viable. For most other manufacturing sectors (automobiles, for example) and for all services, strategies of national responsiveness are required, often coupled with integration strategies.
The real drivers of globalization are the network managers of large multinational enterprises. But their business strategies are triadic, or regional, in scope and are responsive to local consumers; they are not global and uniform.
The specialty chemicals business and the automobile industry are triad-based, not global. There is no global automobile; more than 90% of all automobiles produced in Europe are sold in Europe, and regional production and predominantly local sales are also the norm in North America and Japan. Successful multinationals now design strategies on a regional basis; unsuccessful ones pursue global strategies.
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