The number of multinational enterprises (MNEs) has exploded exponentially in recent years, as digitization enabled enterprises to build their capabilities and expand across borders. But according to management professors Satish Nambisan and Yadong Luo, before penetrating foreign markets, MNEs must consider potential complexities and adjust their strategies accordingly. Whether you’re operating an Alibaba storefront or a giant MNE, Nambisan and Luo stress the importance of analyzing and adapting to everything from digitally-powered recombinant innovation strategies to restrictive local regulations.
Digitization fuels the unprecedented growth of multinational enterprises (MNEs).
Digitization has dramatically altered global market contexts: Between 2000 and 2010, for example, the number of multinational enterprises (MNEs) nearly tripled. Today, MNEs comprise half of all global exports, one-third of the global GDP and roughly 25% of employment, worldwide. This accelerated growth results from developments in digital technologies such as artificial intelligence (AI), mobile computing and the Internet of Things (IoT). This technology grants companies the power to innovate and create value across geographic borders via new pathways connecting markets and businesses. Many product-based businesses leverage digital technologies, infrastructures and platforms to expand faster with more ease and affordability.
Business leaders must consider barriers to globalization – such as geopolitical nationalism and localization – and adapt their strategies accordingly. Uber failed to do this in Asia, for example; it penetrated this market rapidly via network effects without adequately adapting its strategy to geopolitical ...
Professor of technology management at Case Western Reserve University’s Weatherhead School of Management Satish Nambisan also authored The Global Brain. Emery M. Findley Distinguished Chair and a professor of management at the University of Miami Yadong Luo authored Global Dimensions of Corporate Governance.