The forgotten strategy by Pankaj Ghemawat

Forgotten Strategy- Pankaj Ghemawat

In a sense, Pankaj Ghemawat's article, "The Forgotten Strategy," resumes where his previous article, "Distance Still Matters" left off. In that latter article, the author gave four separate definitions of distance as it relates to geographic location, economics, administrative and institutional differences, and to culture. In the former article, the author uses this same four-point framework to put forward a new thesis. Essentially, the author discusses the failure of globalization due to an assumption that in the 1990's and the 2000's, there are fundamental similarities that exits between foreign lands due to improvements in communication, the internet, and in travel. He gives a number of convincing examples that by exploiting the differences between such locations, organizations with global aspirations can succeed.

What is most important about the author's viewpoint, however, is the fact that despite presenting a lot of examples in which his thesis is proved, he does not neglect the overall picture. In fact, he believes that to merely focus on the differences between foreign places would be as short-sighted as only focusing on the similarities between them. Instead, the larger point of his essay is that by creating a balance in which a company focuses on both similarities and differences between global locations, it can best succeed as an international brand.

To his credit, Ghemawat provides a number of convincing examples that demonstrate his viewpoint. One of these examples is the history involved with arbitrage, which is the term for exploiting distances differences between locations. The author points out, for example, that historically, most of the world's international trade revolved around differences between locations and what people in them had, wanted and needed. It is these differences in "cost and availability (Ghemawat 2004, p. 84) that accounted for the success of arbitrage. What is even more crucial about this point is that each of the four types of distance that Ghemawat has outlined can be included in this assessment of the history of globalization.

For the most part, there appears to be a good deal of truth in the author's recommendation for a balanced approach towards successfully implementing globalization. There certainly seems to be a large amount of pride involved in the traditional notion of globalization, in which countries assume that it is only due to their "superior business model" (Ghemawat, 2003, p. 78) that their product is succeeding domestically, and they merely have to mimic those same domestic tactics internationally to achieve global success.