Frameworks for Global Strategic Analysis

Frameworks for Global Strategic Analysis

Donald R. Lessard 1

Massachusetts Institute of Technology

Keywords: global strategy, competitiveness, geographic scope, internationalization,

globalization/localization.

1. Introduction

Strategic analysis in a global setting involves competition in industries that

extend across national boundaries and among firms with different national

home bases that may tap into strategic resources in more than one location.

This note provides frameworks for global strategic analysis at four levels: the

geographic scope of the industry, the competitiveness of various locations, the

geographic reach of the firm, and the global integration vs. local focus of

specific activities. This multilevel approach makes it possible to "zoom in" on

a particular strategic setting, taking into account the most important factors at

each level.

2. Levels of Analysis: Issues, Frameworks and Actions

This note introduces the principal frames of reference required for strategic

thinking and action in an international context. These include those required

for defining the geographic scope of industries, the competitive advantage of

countries (regions) and its implications for the location of activities, and the

appropriate tradeoffs between local responsiveness and global integration of

different activities in the value chain. Strategic thinking in any context

involves the identification of a set of issues, the selection and/or development

of an appropriate conceptual framework for assessing these issues and

identifying potential courses of action, measuring key variables, and selecting

courses of action.

1. Epoch Foundation Professor of International Management, MIT Sloan School of

Management. This note is adapted from an MIT Sloan School teaching note that reflects

the “multi-level” approach to IM developed together with Eleanor Westney over the years.

While I have attempted to cite the prior works I draw on directly, this note does not attempt

to provide a complete bibliography of the extensive IM literature underlying these key

concepts. For an excellent early bibliography see Kogut (1989).

82 Frameworks for Global Strategic Analysis

International strategic management involves competition in industries that

extend across national boundaries, among firms with different national home

bases, and with firms that operate across national boundaries and may tap into

strategic resources in more than one location. As a result, in addition to the

“standard” strategic frameworks for assessing the desirability of an industry or

business and the firm’s capabilities that give it a competitive advantage in

particular businesses, international strategic thinking requires frameworks for

the following levels of analysis:

• the geographic scope of the relevant industry,

• the attractiveness of various locations as markets, sources of factor

inputs or strategic competencies, and the overall competitive

advantage afforded by various locations,

• the sustainability of internationalization as a (dimension of)

competitive strategy for a particular firm,

• the degree of global integration and local focus of activities or

processes.