Global Strategy: Creating and Sustaining Advantage across Borders

Global Strategy: Creating and Sustaining Advantage across Borders

Global Strategy: Creating and Sustaining Advantage across Borders

Global Strategy: Creating and Sustaining Advantage across Borders

Excerpt

The impact of global competition is being felt in every industry. Firms and countries long used to dominance in their respective international markets must reckon with aggressive and innovative competitors from all corners of the globe. For example, the United States, long the world's largest exporter of agricultural products, now finds itself facing strengthening competition from countries such as Russia, Brazil, and Mexico. The steel industry over the past 150 years has seen a series of competitive jolts that have upset the established order of business. At the turn of the previous century, radical new technologies and fastgrowing markets allowed the U.S. steel industry to surge ahead in size and productivity. After World War II, though, Japanese firms and then Korean firms became powerful low-cost competitors, decimating the U.S. steel industry. In 2004, a U.S. company called International Steel Group, Inc., agreed to a $4.5 billion buyout bid from a Dutch company that would create the world's largest steel company. International Steel Group was created by the financier Wilbur Ross, who purchased the bankrupt assets of U.S. steel companies including LTV, Bethlehem Steel, and Acme Steel. The Dutch company was controlled by Lakshmi Mittal, an Indian-born billionaire based in London. Mittal built up a global steel company by investing in countries such as Poland, Romania, Czech Republic, Algeria, South Africa, Mexico, and the United States (his company Ispat purchased the former Inland Steel plant in Illinois).

For many companies, the deployment of value-chain activities is increasingly being done on a global scale. An article in the Economist described how Brillian, an American company, is developing a new television. Brillian has a research and development (R&D) contract with Wipro, an Indian technology company based in Bangalore. Wipro was sourcing the television components from companies in America, Japan, Taiwan, and South Korea. Once the television was . . .

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