Reading 3-1: Managing Differences: The Central Challenge of Global Strategy

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Reading 3-1: Managing Differences: The Central Challenge of Global Strategy by Mind Map: Reading 3-1: Managing Differences: The Central Challenge of Global Strategy

1. Main goal of any global strategy must be to manage the large differences that arise at borders

1.1. Exploiting differences found at borders is large opportunity for value creation

2. AAA Triangle

2.1. Three A's

2.1.1. Arbitrage

2.1.2. Aggregation

2.1.3. Adaption

2.2. Most companies emphasize different A's at different points in their evolution

2.3. Most companies do and should focus on just one A at a time

2.4. Look at income statement to see which A or which A's are most important for you

2.4.1. High Advertising = Adapt

2.4.2. High R&D = Aggregate

2.4.3. High Labor = Arbitrage

2.5. Pursuing two A's simultaneously

2.5.1. Requires considerable organizational and material innovation

2.5.1.1. Hard

2.5.1.2. Soft

2.6. Pursuing all three A's at the same time is constricted

2.6.1. Problems

2.6.1.1. External relationships

2.6.1.2. Competition can force company into choosing a dimension

2.6.1.3. Many think that company should have only one culture and that can get in the way of achieving multiple strategic goals

2.6.1.4. Complexity of doing so collides with managerial bandwidth

2.6.2. Only possible when tensions between A's are weak

2.7. Developing a AAA Strategy

2.7.1. Plot competitors in one AAA triangle to see their strategies

2.7.2. Use AAA to visualize tradeoffs between A's

3. Broader Lessons

3.1. Focus on one or two A's

3.2. Make sure the new elements of a strategy are a good organizational fit

3.3. Employ multiple integration mechanisms

3.4. Think About Externalizing Integration

3.4.1. Joint Ventures

3.4.2. Open innovation

3.5. Know when NOT to integrate

3.5.1. Remain flexible

3.5.2. Keeping certain activities separated might be better than trying to integrate them all