ABSTRACT
Although globalization may feel like a twenty-first-century phenomenon, humans have been creating an evermore global world for millennia. Throughout human history, the discovery of distant lands often led to the establishment of new trading routes that brought not only the flow of new products, but also people, ideas, innovations, and philosophies. In addressing the question of what’s new under the globalization sun, the authors have developed a simple but robust framework that helps put the globalization of businesses in context. Despite the independence and a myriad of possible positions and routes, our research and experience show that the majority of companies follow a common path through this two-dimensional space. For manufactured goods with any degree of economies of scale, exporting can help firms get full utilization out of existing capacity. In addition to the economic incentives to move from Stage 1 to 2 that the authors just covered, our research suggests that psychological drivers are nearly as powerful.
