The document argues that globalization is a myth and that companies primarily operate at a regional level within three main economic blocs - North America, Europe, and Asia. It provides evidence that the majority of world trade occurs within these regional blocs rather than globally. The conclusion is that business strategies must be tailored regionally rather than assuming an integrated global market.

1. “The Myth of Global Strategy”
by
Alan M. Rugman (2001)
Wendy Wu
Kenny Lo
Yu Chen

2. Overview

Globalization is a myth and it does not
exist

Companies only operate at regional
Level

3. Introduction

Most business activities take place in regional
blocks

The triad blocks – North America, the
European Union and Japan

MNEs compete for regional market share

Business strategies are triad/regional and
tailored to local taste

4. Globalization defined as
•
Selling homogenous type of products or
services
Arguments
•
MNEs’ Foreign sales >50% => Triad-Regional
•
MNEs are not monolithic + powerful in political
terms
•
MNEs have to adapt their products for local
market

5. World trade is highly
regional

World trade
provides a good
example of just
how regional
MNEs are

6. World trade is highly regional

The triad continues to dominate the
amount of trade in terms of exports
and imports

The core triad members rely on other
members of their own triad

7. World trade is highly regional
NAFTA
1010.9
Intra-NAFTA
496.4(49.1%)
220.0
182.1
226.0
ASIA 1042.6
Intra-Asia
553.4(53.1%)
155.3
153.3
197.6
EUROPEAN UNION
2092.3
Intra-EU
1268.5(60.%)
Exports in the broad triad (data are for 1997,in US＄billion)

8. World trade is highly regional

Majority of world trade in the
European and Asian triads happen
within their internal markets

Nearly half of North America’s trading
activities is intra-regional

Most trading of rest of world is
between triad members

9. Conclusion





Do not assume an integrated global market
Design organization structures that recognize
triad-based know-how capability
Increase knowledge about regional business
networks and triad-based cluster
Develop analytical methods for assessing
regional drivers of success
Businesses need to think local and act
regional

10. Our thoughts…

Formation of trading blocs simulated
trading at a regional level

“Glocalization”