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date: 29 June 2022

Global Strategy and Multinational Corporation Capabilitieslocked

Global Strategy and Multinational Corporation Capabilitieslocked

  • Donald R. LessardDonald R. LessardMIT Sloan School of Management, Massachusetts Institute of Technology
  •  and D. Eleanor WestneyD. Eleanor WestneyMIT Sloan School of Management, Massachusetts Institute of Technology

Summary

Strategy 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. The resources that the firm accesses from its home country provide it with international competitive advantage only if they are relevant in other markets, if the value they create is appropriable, and if they are transferable to those markets (RAT), These resources include tangible assets and factors of production, but, importantly, also the capabilities the firm develops. Similarly, the resources that it taps from other contexts provide it with further competitive advantage only if these resources are complementary to the firm’s existing resources, appropriable, and transferable to the locations where it can exploit them (CAT). These two sets of factors—RAT and CAT—provide a framework for international strategic decisions that emphasizes developing, acquiring, and transferring capabilities.

Subjects

  • Business Policy and Strategy
  • International Business
  • Organization Theory

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