Strategies for Global Value Creation
PART 2 FOCUSES ON STRATEGIES for adding value in the face of large cross-border differences. Chapters 4–6 introduce the AAA strategies for responding to differences: adaptation, aggregation, and arbitrage. Chapters 7 and 8 provide an integrative perspective.
• Chapter 4 focuses on adaptation strategies that adjust to differences across countries. Since this category of responses to differences will already be familiar, the chapter aims to stretch thinking by emphasizing the range of levers and sublevers available for adapting more effectively.
• Chapter 5 focuses on aggregation strategies that overcome some differences among countries by grouping them based on similarities. While there are many possible bases of aggregation, this chapter strives for depth rather than breadth by focusing on geographic aggregation by region.
• Chapter 6 focuses on arbitrage strategies that exploit selected differences across countries instead of treating them all as constraints. The chapter reviews arbitrage strategies based on the CAGE differences discussed in chapter 2, but covers economic arbitrage, especially labor arbitrage, in particular detail.
• Chapter 7 examines the trade-offs among the AAA strategies and the extent to which it is possible and advisable to pursue more than one of the As at the same time. It addresses, in other words, the development of integrated strategies for playing the differences.
• Chapter 8 concludes the book with a look at the future of globalization, about which both optimism and pessimism have been expressed. Insights developed in the earlier chapters are used to cut through such debates—and to suggest a step-by-step approach for companies to enhance global value creation.