Globalfocusing: From Domestic Conglomerates to Global Specialists*

Abstract

Globalization is changing the competitive terrain on which companies develop their corporate strategy. On the global stage, key competitive advantages are gained through internationally fungible resources. Consequently, diversified conglomerates are converting to global specialists in narrower niche markets and competing with a small number of multinational enterprises operating worldwide. Their internationalization and their reduction of product diversification are opposite sides of the same coin: globalfocusing. I extend Penrosian resource-based theory to analyse this change process, notably by distinguishing country and industry specificity of firms' core competences, and by integrating divestment as part of firm growth processes. Globalfocusing is driven by shifts in the relative importance of country-specific and industry-specific resources and capabilities due to changes in the internal and external environment, notably the globalization of markets and supply chains. The argument is developed using case studies of restructuring of two Danish manufacturing enterprises. On this basis, I analyse the forces driving globalfocusing processes and suggest propositions for empirical testing.

Corporate Strategies during the Global Downturn: Initiating a Forward-Looking Debate

“…In consequence, Danisco sold its erstwhile largest business unit, Danisco Sugar, in March 2009 to focus entirely on food ingredients. Many major European conglomerates restructured in a similar direction, though rarely as radical as in these two case examples (Meyer, 2009 (Meyer, 2006). Globalisation has created an integrated competitive landscape, where (almost) every firm competes with any other firm that happens to offer similar products or services.…”

“…The shift from domestic to global growth paths in the past three decades has been driven by shifts in barriers to entry across industries and countries due to the globalisation of markets, resources, supply chains and business models (Meyer, 2006). These global strategies, operations and resources position MNEs them quite differently than during earlier recessions.…”

A Microeconometric Analysis of the Springboard Subsidiary: The Case of Spanish Firms

“…Globalization is changing ways of doing business (O'Donnell, 2000) and the competitive environment in which companies carry out their corporate strategies (Meyer, 2006). Multinational companies (MNCs) are the main proponents of growing economic interdependence between nations and regions, which has transformed them into "key actors in the globalization process" (Rugman and Verbeke, 2004).…”

Assessing the Impact of Business Group Diversification on the Internationalization of their Affiliates: The Case of Latin American Firms

“…Nevertheless, as mentioned by Yiu et al (2007), there is a paucity of research associated with the internationalization of business groups. While several of the benefits provided by diversified business groups seems to be location-bound (Tan and Meyer, 2010;Meyer, 2006), empirical evidence is not conclusive about the impact of diversified business groups on the internationalization of their affiliates.…”

“…However, Meyer (2006) suggested that knowledge of institutional systems and links with government officials are specific to a particular country.…”