KEY THEMES OF THIS BOOK

The world's largest 500 companies are often called multinational enterprises (MNEs), i.e. they produce and/or distribute products and/or services across national borders. These MNEs have repeatedly been identified as the drivers of globalization. Yet, very few are “global” firms, with a “global” strategy, defined as the ability to sell the same products and/or services around the world. Instead, nearly all the top 500 firms are regionally based in their home region of the “triad” of North America, the EU, or Asia. It follows that a firm can be internationally active across its home-region market but not be global.

A large firm can have what appears to be an international “global” strategy within its home region. This occurs if the firm's successful strategy includes selling the same products and/or services in the same manner within its home region of the triad, allowing the firm to gain all the potential economies of scale and scope and/or differentiation advantages within its home region market. The data presented in this book show that there appear to be no additional scale, scope, or differentiation advantages to be gained by going global.

If firms have exhausted their growth in their home region of the triad and still go into other regions, they then face a liability of foreignness and other additional risks by this global expansion.