Microsoft china strategy

P A R T1 FOUNDATIONS OFGLOBAL STRATEGY

1 Strategizing Around the Globe

2 Managing Industry Competition

3 Leveraging Resources and Capabilities

4 Emphasizing Institutions, Culture, and Ethics

CHAPTER1

STRATEGIZING AROUND THE GLOBE

KNOWLEDGE OBJECT IVES

After studying this chapter, you should be able to

1. Offer a basic critique of the traditional, narrowly defined “global strategy”

2. Articulate the rationale behind studying global strategy

3. Define what is strategy and what is global strategy

4. Outline the four fundamental questions in strategy

5. Participate in the debate on globalization with a reasonably balanced view and a keen awareness of your likely bias

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OPENING CASE

The Global Strategy of Global Strategy

Launched in 2005, Global Strategy has been used by business schools in over 30 countries and is now available in Chinese, Spanish, and Portuguese in addition to English. Global Strategy has also spawned two related books: Glo- bal Business (a more comprehensive, traditional textbook in international business) and GLOBAL (a more compact, innovative paperback). Everybody knows global competi- tion is tough. How do Global Strategy and its sister books compete around the world? In other words, what is the nature of the global strategy of Global Strategy?

Global Strategy and its sister books are published by South-Western Cengage Learning, which is a division of Cen- gage Learning. Cengage Learning serves students, teachers, and libraries in the secondary and higher education markets, as well as government agencies and corporations. While the copyright page of this book indicates an address in Mason, Ohio (a suburb of Cincinnati), note that this is the address for the specific division: South-Western. The corporate headquar- ters of Cengage Learning is in Stamford, Connecticut. Cen- gage Learning is a global company, which is owned by Apax Partners of the UK and OMERS Capital Partners of Canada, two private equity groups. Overall, the global nature of Cen- gage Learning permeates the organization: it is UK- and Canadian-owned and US-headquartered. With annual sales of over $2 billion, Cengage Learning has approximately 5,800 employees worldwide across 35 countries.

In business and economics textbooks, South-Western Cengage Learning vies for number one in the world in terms of market share with McGraw-Hill Irwin and Pearson Prentice Hall, the other two members of the Big Three in this industry. While competition historically focused on the United States and other English-speaking countries, it is now worldwide. Global Strategy targets courses in strategic management and international business. While there is no shortage of textbooks in these two areas, Global Strategy broke new ground by being the first to specifically address their intersection. Thanks to enthusiastic students and pro- fessors in Angola, Australia, Austria, Brazil, Britain, Canada, Chile, China, Finland, France, Denmark, Germany, Hong Kong, India, Ireland, Japan, Macau, Malaysia, Mexico, the Netherlands, Netherlands Antilles, New Zealand, Norway,

Portugal, Romania, Singapore, South Korea, Spain, Swe- den, Taiwan, Thailand, and the United States, Global Strat- egy achieved unprecedented success.

While competition is primarily among the Big Three, Glo- bal Strategy has also attracted new entrants—competing textbooks published by smaller, historically more specialized academic publishers such as Cambridge, Oxford, and Wiley that are interested in breaking into the mainstream textbook market. In addition to new entrants, the publishing industry has also been experiencing another challenge: the digital revolution. E-books have emerged as a viable substitute to the printed version. Amazon now sells more Kindle versions than printed versions of books. To keep up with this movement, the Kindle version of Global Strategy has been available since the second edition.

Although competition, in theory, is global, in practice Cengage Learning needs to win one local market after another—literally, one course taught by one instructor in one school in one country. Obviously, no instructor tea- ches globally, and no student studies globally. Teaching and learning remain very local. For the company as a

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A Global Global-Strategy Book How do firms, such as Cengage Learning, McGraw-Hill, and Pearson, compete around the globe? In the publishing industry in each country, how do various foreign entrants and local firms interact, compete, and/or sometimes collaborate? What determines their success and failure? Since strategy is about competing and winning, this book on global strategy will help current and would-be strategists answer these and other important questions. Setting an example by itself, the book you are reading is a real global product that leverages its strengths, engages rivals, and competes around the world (see Opening Case).

However, this book does not focus on a particular form of international (cross-border) strategy, which is characterized by the production and distribution of standardized products and services on a worldwide basis. For over two decades, this strategy, com- monly referred to as “global strategy” for lack of a better term, has often been advocated by traditional global-strategy books.1 However, there is now a great deal of rumbling and soul-searching among managers frustrated by the inability of their “world car,” “world drink,” or “world commercial” to conquer the world.