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This is Anil Gupta.
I'm Michael Dingman Chair and Professor
of Strategy and Globalization
at the Smith School of Business
at the University of Maryland.
This presentation will cover
some of the "Foundational Ideas"
that underly the whole process
that a company needs to go through,
in designing a global strategy.
So the first idea
I would like to cover
is, at what level of the company
executives should be thinking
about global strategy?
My favorite quote here
is from Jack Welch,
the celebrated former CEO of GE.
He says, "When I was CEO,
I was often asked,
'What is GE's global strategy?'
And my stock answer was,
'GE does not have a global strategy.
Each of my businesses
has a global strategy, but not GE.'"
And so the point here is
that when we think
about the global strategy of GE,
actually, the starting point
is the global strategy.
For example, for GE Capital,
or GE Healthcare, or GE Transportation.
And then from that to then go up
to the next level,
to the corporate strategy level,
and see how does it add up.
What does it mean
in terms of the global strategy
of the corporation as a whole?
To summarize this point,
it's that when we think about
the global strategy
of a multi-business
the starting point should be
at the line of business level
and then to aggregate up.
And so essentially when we think
about the business strategy,
for instance, GE Transportation,
or let's say the beauty care
business of Procter & Gamble,
or say the software business of IBM.
So at that level of business, of course,
we are thinking
about this business strategy.
Which is in terms of
what is the market space
the business will compete in?
What its competitive advantage will be?
How will it win?
Then, of course, we focus on,
what is the growth strategy
for that particular business?
And then another central dimension
of the business strategy
is, of course,
how should that business globalize?
Or, in fact, if that business
should globalize at all?
Going back to GE, for instance.
One of the big businesses of GE
is home appliances.
Now we know that, for instance,
or GE Aircraft Engines or Aerospace,
they are highly globalized businesses.
But look at home appliances,
it's almost totally US
or North America-centric
or hardly globalized at all.
And so that's my point here.
It's that the global strategy
can be very different
across individual businesses.
Even in a company like IBM,
where every business of IBM
is extremely global.
But the specifics
and, in fact, important specifics
of how the different businesses
have been globalized are very different.
Look at IBM's hardware business
which is very heavily China-centric,
in terms of where the hardware
Software, very heavily US-centric.
But on the other hand
you look at IBM's services business,
very heavily India-centric.
And so therefore,
even for a very globalized company
where the different businesses appear
highly integrated with each other;
the best way
to understand IBM's global strategy,
in fact, the best way
to design IBM's global strategy
is to start
at the level of individual businesses.
And then to aggregate up
from there to the corporate level.
So this is an important point
because if we get
the level of aggregation incorrect
in terms of thinking about
how to understand, how to interpret,
how to design
the global strategy of the company;
we essentially are going to misfire
on the rest of the analysis.