The document discusses when companies should avoid global expansion strategies. It provides examples of companies like Revlon, eBay, Vodafone, Walmart, and Daimler-Benz that failed due to not properly assessing whether globalization made strategic sense or executing effectively. Before going global, companies need to determine if there are potential benefits, whether they have the management skills required, and if costs will outweigh profits to avoid costly mistakes like these companies experienced. Proper planning and localized strategies are essential to succeeding globally.

1. When You Shouldn’t Go Global Marcus Alexander and Harry Korine Harvard Business Review | December 2008 Presented by: Diana Lim 2010.09.28

2. 20th Century Walls Political Walls Trade Walls Transportation Walls Communication Walls

3. The Walls Come Tumbling Down

4. The Walls Come Tumbling Down

5. The Walls Come Tumbling Down

6. The Walls Come Tumbling Down

9. Revlon Revlon’s expansion in Brazil in Brazil, the Camellia flower is for funeral purpose Revlon launched a perfume with the aroma of Camellia They need to recall back their product and find other market to sell it Brand name infected, spent extra time, money and effort

10. Avoiding Ill-Fated Strategies Are there potential benefits for our company? Do you have the necessary management skills? Will the costs outweigh the benefits? eBay’s failure in Japan may well have been prevented with a self-assessment like this

11. eBay from eBay’s foundation in 1995 they were profitable launched its Japanese site on February 28, 2000 Two years later when eBay pulled the plug on its Japanese operations – pulverized by Yahoo! Japan Auctions

12. eBay they hired the wrong person as country manager tried to force Japanese consumers to fit the company’s American-centric service model made grandiose announcements about their entry into the Japanese market, well before they had a localized product ready to launch in Japan missing the first mover advantage was perhaps eBay’s single biggest blunder

13. Globalization’s Siren Song Deregulated Industries (telecom, postal service, utilities) – increased competition in home markets and new found freedom Service Industries (retail, banking, insurance) – scale economies and growth beyond home markets Manufacturing Industries (automobiles and communication equipment) – mergers and consolidation in order to survive

15. Vodafone acquired J-phone in 2001

16. full range of mobiles with features and styling almost a generation behind those available from the other major carriers

17. Did not increase investment to catch up

18. delay in launching accompanying 3G services

20. Entered in 1998, exited in 2006

21. Difference in product preferences

22. Located outside cities

23. Do not distinguish between discount and normal prices – no compelling reason

24. Visually oriented customers (prefer the department store-like, neat, clean, and sophisticated atmosphere)

26. Chrysler's primary reason for teaming with Daimler-Benz is to extend its international reach“Mercedes was universally perceived as the fancy, special brand, while Chrysler, Dodge, Plymouth and Jeep were the poorer, blue collar relations” -- James Holden, President of Chrysler

27. The future will be more unpredictable Globalization is getting more complex and this change is getting more rapid.

28. "I think there is a world market for maybe five computers” Thomas Watson, chairman of IBM, 1943

29. “Sen. Obama cannot possibly believe, and doesn't even act as if he believes, that he can be elected president of the United States next year.” – Christopher Hitchens, author/journalist, 2007

30. “Overall risks to the outlook seem less threatening than months ago.” IMF 2007 World Economic Outlook

31. Ikea first came to Japan in the mid 1970s pulled out of Japan in 1986 reopened in 2006 “It’s not good enough just to land here and hope that everything is going to work. You need to have everything in place—the whole supply chain, the well-trained workers and an organization that can actually expand and grow.” --Lars Petersson, CEO of IKEA’s Japan operations

32. Summary Not all globalization strategies are flawed But many have stumbled Great vision, lousy execution Before launching a global move, need to conduct a self-assessment Ensure efforts make strategic sense to avoid disastrous consequences

33. Summary Is this just a fad that is driven more by “bandwagon” thinking than actual business value? Promoted by analysts, consultants, and media as the only way to succeed? Are we implementing solutions or buzzwords?