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Business unit strategies between regionalisation and globalisation

by H. Proff
International Business Review ()

Abstract

Although in both the economic literature and in practice the most frequently used catchword is "globalisation", the current company environment in reality is not characterised by such worldwide multilateralism or an increasing degree of homogeneity in customers' tastes. Instead, a trend towards regionalism ("regionalisation") has become evident recently, especially with the current formation of new regional integrations outside the triad-markets, especially in East Asia, South America, and Southern Africa. Nevertheless, some indications point to a transition from regionalisation to globalisation in the long run. Above all, a cluster analysis of environmental conditions in the member countries of these new regional integrations already reveals a degree of inter-regional homogeneity, which characterises the current regionalisation as an "open" rather than a "closed" aggressive stabilisation of trading blocks. Although the transition towards globalisation lies beyond even the most long-term strategic planning, companies have to concentrate their current strategies on an "open" multi-regional economic setting. On the business unit level, this opens possibilities for strengthening hybrid advantages of low costs and differentiation as well as a regiocentric (dual) international orientation for many companies. ?? 2002 Elsevier Science Ltd. All rights reserved.

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