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The global competitive strategy means superior per-formances as compared to the competition on both

the national and the international markets. The man-agers act with respect to the global perspective andstandards in terms of costs, efficiency, product qualityand innovations, at the same time adjusting their offerto the local tastes and specific demands. The interna-tional global competitive strategy integrates the dualrequirements put both in relation to the internationalstandard and in relation to the local particularities.Differences among countries do create problems, how-ever, they may be an opportunity to do business. Thebook presents a special tool called “Analysis by thestar“ that provides support to managers in their formu-lating the global strategy based on taking into accountthe key differences among countries. The five arms ofthe star refer to the need that the firm should respectand adjust to the requirements of its own country, thesupplier countries, consumers, partners and competi-tion. This method is praised to serve as a consistent andsystematic approach to varied information on the spe-cific features of the countries that the global firm doesbusiness with.

The analysis by the star helps managers create a globalcompetitive strategy, and the author, Daniel Spulberlists five basic types which he names the “G5 strategies“.The first is the strategy of global platform, insisting thatthe firm should define itself by choosing the activities todo in accordance with the global, world standard, as

well as those it will tailor separately, as the demand oflocal markets may be.

The global network strategy focuses upon the buildingof a large and complex network of consumers and sup-pliers, linked into global supply chains and distributionsystems.

The global mediatory strategy means that the firm fo-cuses upon the mediating activities or the activities of

connecting the major players, or has the role of the cre-ator of a specific market on which the parties con-cerned will compete. In such a case, the focus of thisstrategy shifts towards increasing the efficiency oftransactions to be executed by means of globally ven-turing beyond the national borders.

The fourth strategy is that of the global enterpreneurthat creates new combinations in the consumer – sup-plier relations in an international frame.

The global investment strategy stresses the differencebetween the horizontal and vertical forms of foreign di-rect investments and refers to the alternative possibili-ties of entering a target market.

These strategies make it possible for the company toachieve a global competitive advantage in a more de-tailed and subtle way compared to the classic, tradition-al approach that means achieving competitive advan-tage by decreasing costs and/or by differenciation.

D.F. Spulber, Global Competitive Strategy, Cambridge University Press, 2007

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An important step in achieving global competitive ad-vantage is related to the research into the global addedvalue created within the company. The value of inter-national business operations is estimated on the basisof the revenues achieved by trading that exceeds thenational borders, from which the costs of such a tradingare deducted. The profitability of international tradingdepends on the amount of value created the companymay retain, having in mind the complexity of transac-tions normally expected in the international context.This capability is said to be directly related to the glob-al competitive advantage expressed by a relative ratioof added value the company offers in comparison to itscompetition.

International trade includes huge costs that are spentto go beyond national borders, thus the term “sticky“

borders is used to depict more vividly the need toanalyse in detail whatever “sticks“ to the border whencrossing it. Varied costs act as economic terms for the“stickiness“ of international borders. The transactioncosts are listed as the first type of costs generated in in-ternational trading. The firm accounts for costs relatedto adjusting to different business environments in dif-ferent countries, which includes the difference betweenlanguages, cultures, social circumstances, businesspractices, political, legal and legislative conditions.There are also differences in time zones, which requirespecial type of adjusting, doing business using differentcurrency with all costs and risks involved. The firmmeets different local suppliers and consumer groups atdifferent localities, which will involve further adaptingthe business methods and approaches to use. In each ofthe concrete situations the international trading will re-quire that prices, products, sales, services, contracts,supplies, employment and the very management prac-tice should be adapted.

The international trading makes a large number of in-ternational transactions by means of bringing into con-

tact the suppliers and the consumers from various partsof the world. The personal computer purchaser, for ex-ample, is virtually unaware that the producer has previ-ously achieved the best combination of the parts for thecomputer through a global supply chain that links alarge number of countries. These are, for the customer,the activities going on “backstage“, by linking differentsuppliers and customers from different countries viadifferent legally valid contracts which are to ensure thatthe end product or service are offered timely and in theright place, and provide the required quality at a con-tracted price.

Transaction costs, however, may be a source of valu-able advantage for the companies that use creative

approaches to ensure greater efficiency and reducethese costs. This is a significant potential opportunityfor achieving competitive advantage in internationaltrading. The author lists tariff and non-tariff costs,transport costs, as well as costs related to the time thatelapses while the transaction is in progress.

The international business brings a number of advan-tages that the managers can recognize and try to use toa highest possible extent; these include achieving a va-riety and economy of scope, a comparative advantage,a comparative availability of production factors, and in-novation and technology transfer.

The global and competitive advantage is achieved bycreating an appropriate global investment strategy.Direct International Investments (DII) are executed inaccordance with either a strategic choice to retain theoperations “within the house“, in which case the firm isvertically integrated, or to “outsource“ certain opera-tions, in which case a certain operation is left to the oth-ers to do – to suppliers, consumers or to partners. Theglobal strategies are presented on the examples of theLenovo, Cemex, Danone and other companies.

Dr Maja Levi-Jak{i}