5
Reach
Going global
The majority of firms are born local and stay local. Some are born local and then become global. Only a select few are born global. This chapter is about the reach of the firm, the geographical extent of its operations. Reach is about internationalization. It is about why firms become transnational companies and how that extra reach helps them in achieving competitive success.
Why all firms are not multinationals
We start with a counterintuitive question. Why aren’t all firms global? One normally assumes that it makes economic sense to start local and then gradually increase reach, but let’s pause and think about this for a moment. Firms are capitalist entities. Their main purpose is to maximize profit for the shareholders. ...
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