Global Meets Digital: Global Strategy for Digital Businesses - Digital Strategy for Global Businesses

The world today is at the intersection of two megatrends – Globalization and Digitalization – a business revolution unfolding in real time. Global Meets Digital captures the many nuances of this revolution succinctly, including its impact on our lives and business. An immediate implication of this revolution is that the economic principles that underpinned business and strategy for hundreds of years, such as diminishing returns to scale and resource scarcity, are no longer valid for a large and growing number of products and services. The book will challenge you to think differently not just about digital products, but also about physical products. In the global-digital world, products are of three kinds—physical, digital, and smart machines (products that are both physical and digital, and connected to the internet)—a distinction missed by most books on strategy and global business. The economics of each kind of products is distinct from that of the others, which has strategic implications for all kinds of businesses –implications such as how to compete and how to create and capture value. With several mini case studies and over 300 company examples, the book covers themes and cutting-edge issues like the paradox of globalization, digital disruption, disruptive business models, exponential technologies, Internet of Things, competition in digital markets, winner-take-all market dynamics, Industry 4.0, how to innovate, strategizing for the New Normal, and value creation and value capture in both B2C and B2B contexts. The book derives its underpinnings from the practice of global and digital business, while theory remains in the background. Intended specifically for an executive/professional audience, Global Meets Digital should also be of value to business students and professors learning to dip their toes into a digital world. Vinod Jain is an expert in global and digital strategy, award-winning professor, Fulbright Scholar, and author of an MBA textbook, Global Strategy. He taught at the Rutgers Business School, Newark and New Brunswick, and the Robert H. Smith School of Business, University of Maryland, College Park. At Maryland, he was also the Founding Director of the federally funded Center for International Business Education and Research and Academic Director of Smith School’s Executive MBA program in China. Since leaving Maryland, he has taught in China, Denmark, Finland, Poland, and India as a visiting or term professor. His opinion pieces have appeared in The Washington Post, The Baltimore Sun, Mensa Bulletin, and Economic Times and Mint (India's #1 and #2 business dailies), among other media. In the past, he worked as a middle- and senior-level executive with American and British multinationals. Vinod has a PhD in Strategy and International Business from the University of Maryland, College Park, MS in Management from UCLA, and MS and BS (Hons) in Statistics from the Indian Statistical Institute, Calcutta. Cover Half Title Title Page Copyright Page Dedication Table of Contents Preface Acknowledgments Author Section 1 The Context 1 Global Meets Digital The Global–Digital Economy Old Is New Again! Globalization: From Divergence to Interdependence to Convergence to Technology—On Steroids What’s Behind the Growth of IT? Competition—A Changing Paradigm Notes 2 Paradox of Globalization When Did Globalization Begin? What Is Behind the Growth of Globalization in Recent Periods? Multilateral Institutions Governments Multinational Enterprises Information and Communication Technologies Globalization Today Reversal of Attitudes toward Globalization Reverse Innovation Reverse FDI Reverse Outsourcing/Offshoring Globalization Today Versus in Earlier Eras The Paradox Notes 3 Digital Business: Technology at Warp Speed Economics of Digital Products Technologies Artificial Intelligence Robotics 3D Printing Cloud Blockchain 5G Exponential Characteristics of Information Technologies Digital Disruption Value Creation and Capture with Technology Notes Section 2 Strategy 4 Entering Foreign Markets Foreign Market Selection The PRISM Framework P: Political Economy Political Systems Economic Systems R: Resources I: Institutions and Infrastructure S: Society and Culture M: Market Potential Industry Structure A Systematic Approach Learning about Foreign Markets Entering Foreign Markets Exporting/Importing Licensing Franchising Foreign Direct Investment Strategic Alliances Notes 5 Global Strategy for Digital Businesses Spotify How Spotify Creates Value How Spotify Captures Value Spotify’s Global Strategy Peloton How Peloton Creates Value How Peloton Captures Value Peloton’s Global Strategy The Globalization–Localization Dilemma Global Strategy for Digital Businesses Network Effects Technology and Innovation First Movers, Fast Seconds, and Imitators Localization Licensing and Partnering IP Protection Notes 6 Digital Business Models Direct Selling Subscription Freemium Outcome Based Razor and Blade Data Monetization Platform Ecosystem Business Models for Professional Services Firms How Law Firms Bill Their Clients Productization of Services Notes 7 Digital Strategy for Global B2C Businesses What Is a Global Business? What Is Digital Strategy? Economics of Digital Markets Value Creation and Value Capture How Value Is Created How Value Is Captured Competition and Competitive Advantage in Digital Markets Establishing Competitive Advantage in Digital Markets Digital Strategy for Global B2C Businesses Nestlé Digital Transformation at Nestlé Nestlé’s Digital Strategy Notes 8 Digital Strategy for Global B2B Businesses The Four Industrial Revolutions Industry 4.0 How IoT (IIoT) Changes Manufacturing Some Specific Advantages of the IIoT How XCMG Benefits from the IIoT Value Creation-Value-Capture Framework for IoT (IIoT) Businesses Value-Creation Layer 1: Physical Thing Value-Creation Layer 2: Sensors and Actuators Value-Creation Layer 3: Connectivity Value-Creation Layer 4: Analytics Value-Creation Layer 5: Digital Service Bosch Digital Transformation at Bosch Bosch Group’s Digital Strategy Notes 9 Reinventing Innovation How Innovation Happens Serendipity Invisible Hand of Market Visible Hand of Management How to Innovate The Build|Buy|Ally Framework Build: Innovation through Internal Development Buy: Acquiring Innovation through M&A Ally: Acquiring Innovation through Alliances Open Innovation Notes 10 Reimagining Business The Five Megatrends Globalization Digitalization Competition The Fourth Industrial Revolution The New Normal Strategizing for the New Normal It’s a Global–Digital World Reach and Richness Improved Performance Value Creation and Value Capture 1. Globality How to Leverage Globality 2. Competition’s New Logic and Logistics Some Features of Digital Markets How to Establish and Sustain Competitive Advantage in Digital Markets 3. Innovation’s New Logistics 4. Disrupt/Cannibalize Yourself 5. The Fourth Industrial Revolution 6. Disruptive Business Models 7. Exponential Notes Index