Truly Global Company
strategy+business
ISSUE 64 AUTUMN 2011
How to Be a Truly
Global Company
Many multinational business models are no longer relevant.
Skillful companies can integrate three strategies — customization, competencies, and arbitrage —into a better form of organization.
BY C.K. PRAHALAD AND
HRISHI BHATTACHARY YA
REPRINT 11308
features global perspective
1
How to Be a Truly Global
Company
by C.K. P r a ha lad a nd H r ish i Bhat t acha r y ya
Photo illustration by Holly Lindem, portrait by Martin Mörck
During the high-growth years between and other emerging markets. The 1 bil1992 and 2007, the globalization of com- lion customers of yesterday’s global busimerce galloped at a faster pace than in any nesses have been joined by 4 billion more.
These customers reside in a other period in history. Now, much larger geographic area; amid the chronic unemploythree-quarters of them are new ment and anti-trade rhetoric of to the consumer economy, and the post-financial-crisis world, they need the infrastructure, some observers wonder whether products, and services that only globalization needs a time-out. global companies provide.
However, the experience of multinational companies in the
The problem is not globalizafield suggests the opposite. For tion, but the way our current inthem, globalization isn’t hap- C.K. Prahalad, 1941–2010 stitutions are set up to respond pening rapidly enough. Whereas to this new demand. The preGDP growth has stalled in the industrial- vailing corporate operating model does not ized world, consumption demand is still work well with the structural changes that expanding in China, India, Russia, Brazil, have taken place in the global economy.
features global perspective
Many multinational business models are no longer relevant. Skillful companies can integrate three strategies — customization, competencies, and arbitrage — into a better form of organization.
2
features management
ISSUE 64 AUTUMN 2011
How to Be a Truly
Global Company
Many multinational business models are no longer relevant.
Skillful companies can integrate three strategies — customization, competencies, and arbitrage —into a better form of organization.
BY C.K. PRAHALAD AND
HRISHI BHATTACHARY YA
REPRINT 11308
features global perspective
1
How to Be a Truly Global
Company
by C.K. P r a ha lad a nd H r ish i Bhat t acha r y ya
Photo illustration by Holly Lindem, portrait by Martin Mörck
During the high-growth years between and other emerging markets. The 1 bil1992 and 2007, the globalization of com- lion customers of yesterday’s global busimerce galloped at a faster pace than in any nesses have been joined by 4 billion more.
These customers reside in a other period in history. Now, much larger geographic area; amid the chronic unemploythree-quarters of them are new ment and anti-trade rhetoric of to the consumer economy, and the post-financial-crisis world, they need the infrastructure, some observers wonder whether products, and services that only globalization needs a time-out. global companies provide.
However, the experience of multinational companies in the
The problem is not globalizafield suggests the opposite. For tion, but the way our current inthem, globalization isn’t hap- C.K. Prahalad, 1941–2010 stitutions are set up to respond pening rapidly enough. Whereas to this new demand. The preGDP growth has stalled in the industrial- vailing corporate operating model does not ized world, consumption demand is still work well with the structural changes that expanding in China, India, Russia, Brazil, have taken place in the global economy.
features global perspective
Many multinational business models are no longer relevant. Skillful companies can integrate three strategies — customization, competencies, and arbitrage — into a better form of organization.
2
features management