There are certain strengths that allow a company to expand its borders. But for this to happen, not only the local experience is enough where there can be a good positioning of the brand or service, good response from consumers, a good cost structure, a good sales approach or even, high standards of quality and productive efficiency; This apparent dichotomy is evident in the diverse dynamics of global markets where there may be products of similar quality and characteristics with large price differences; Aspects such as distance and costs related to supplies, transportation, tariffs and taxes in general, are only part of the analysis. This may not matter if a good global expansion strategy is not established (8.6 Notes: Global business strategies).

Nevertheless, internationalization is not an unattainable phenomenon from companies with high standards of efficiency and the empirical evidence shows that an adequate strategy of market penetration considering the right dimension, can have great worldwide success. One of the success stories is that of Inditex, a multinational that operates in more than 70 countries.

a. Adapting to global market

Following Ghemawat's analysis that the world is semi-global, companies not only have to compete on costs or quality but also consider cultures, traditions or geographical aspects of countries. Of course, a good business strategy by breaking paradigms is a component of success. Inditex, a Spanish company that owns the Zara brand, has based its strategy on various pillars in the textile sector where the competition in design, quality, prices and standards is one of the most complexes in the world. The pillars of the strategy are the following:

1.- Vertical integration model (high response to the market and low costs)
Benefits: rapid adaptation to trends, high response to demand, eliminate high costs of positioning fashion products

2.- Own production and local and external suppliers (Spain, Portugal and Morocco)
Benefits: Great control of your supply chain, adaptation and productive flexibility.

3.- Own stores (in most cases)
Benefits: control of the sale to the retailer and increase of the margins of profitability, greater control of distribution and inventories.

b. The multinational INDITEX under the AAA framework of Ghemawat

As mentioned by Professor Klaus Meyer (8.8 interactive video Module 8), in internationalization strategies multiple factors must be considered, in some cases more than one approach can be taken to delineate a corporate strategy. Here are some brief elements of ZARA's strategy to compete in the global market.

Ghemawat AAA framework
Strategies of multinational Inditex (Zara)
Aggregation strategy
The integration of the firm's operations achieved greater administrative and operational control and a broad capacity to respond to the market

Focus on minimum adaptation:
Sell products with global fashion trends, following a Pull strategy

Share costs with local firms:
Not all Zara stores are owned which shows that they have mixed strategies
Flexible business models:
High response capacity to the market which makes the company more flexible to others in the textile segment.  
Fragmentation of the supply chain with own plants in Spain, Portugal and Morocco

Elaboration: Holger Ramos Benavides; Sources: 8.6 course notes (AAA framework), El País, Zara international success


The AAA framework puts in perspective what are the elements that a company must analyze in the elaboration of an expansion strategy from the local to the international level. It is also necessary to understand that the strategies must consider the local aspects and how these can affect the business turnaround. Although there is no exact formula, innovation and adaptation are still determining factors in the success of these strategies, such is the case of Inditex described in this essay.


If we consider globalisation as a multifaceted phenomenon that implies important relations between the social, technological, economic, environmental and political (relations known as STEEP) between countries we identity new elements to explain integration and not just the purely economic analyses made in post war periods. To cite a case, the debate on 1974 about the alleged loss of economic power in the US consequence of the 1971 and 1973 international monetary crisis was spinning around the overvaluation of the dollar that occur from 1960 to 1971 (Paul Samuelson 1974).

In this context globalization was not yet understood as a phenomenon that could drastically change the power relationship between East and West, not only from the ideological spectrum; under this context the US continued to maintain the conditions to be called a hegemonic country (Hegemonic stability theory). Nevertheless even in this period we could also consider the evidence of the world integration on some aspects like finance, among others the influence of the US on international monetary system. One of the principal teachings of that crisis was the importance of improve competitiveness on international market, take care of the called "benign neglect", monetary and fiscal policies, among other topics.

But we could find a deeper integration from 1990 to 2015 period in which the liberalism, explained as a dominant force that converges toward a unification of ideas of cooperation, integration and free trade, generated the consolidation of International Organizations as the European Union (Maastricht Treaty 1992) the participation of transnational and transgovernmental actors. The question is if the US will led the globalisation on the present century or other nations will arise as China.


A new change in the world's economic leadership is a possibility, at least there is enough evidence in academia. The growth of the product and consolidation of China in global markets, the problems experienced in the integration of the European Union with key points in the crisis in Greece and the exit of the UK from this bloc, give us the measure of a partial redistribution of power. On the other hand, the current US government maintains a discourse with the tinge of protectionism "US first". In the redistribution of power we can find some explanations in history, in the advent and fall of nations that are explained in the theory of long cycles (Myers 2007). Although it is complex to establish a causal relationship that explains the changes in power in the world, even so, we cannot ignore the power exercised by a country that predominate on economic, military and at the same time is perceived by other nations in maintaining of human values.

A redistribution of effective power must also contemplate keeping public institutions and organizations of countries current and efficient. On the other hand a particular case is that both US and China are two countries that will inevitably dispute the leadership but the EU acts with a "sprit de corps", which despite the problems can be a long-term strength.


Globalization has deepened the vision of a more integrated world politically, economically, environmentally, socially and technologically and according to this vision many international institutions have laid the premises for a hoped balanced development. This vision, although it is shared by the EU, US and China, which is demonstrated in the participation of them in entities such as the World Trade Organization, this does not exclude a more accelerated development of some than of others; Although in terms of product China seems to have greater potential, a change of world leadership is still under analysis.


As a starting point it can be mentioned that the rise of so-called populism in the 21st century is a phenomenon that concerns both developing and developed countries non excluding emerging economies (Left and right populism in the US; course notes). It is so from the Academy have realized various analyzes about their causes and among others, cites the citizen perception that globalization has brought a greater integration but has not improved the quality of life of people which is reflected in low real wages, low average labor productivity, over-indebtedness and lack of adequate access to education, health and housing. This perception could be seen more clearly in the developing countries, but analyzing the income inequality in United States or the United Kingdom i. e., we can verify that discontent has been extended and is one of the reasons to people seek new forms of governance.

This discontent is evidenced in three particular events, the 2008 financial crisis, the election of Trump and the Brexit. In emerging countries like Brazil, the recent triumph of Jair Bolsonaro (waiting for the second round) displaces a left-wing political party with an anti-globalization and "class" discourse present in more than 10 years. But the discourse of Bolsonaro also has brought in tune popular discontent for the lack of employment, rise of organized crime and delegitimization of public institutions.

In this context, the business community has some challenges that must be addressed as the susceptibility of regulatory changes by governments that fall within the populist approach (Defining populism; course notes) and how these affect the entrepreneurial exercise. To this is added how to develop business strategies with a focus on Sustainability in the long term.


We can start by describing the generating sectors of wealth of a country summarized in trade, manufacturing, services and agriculture and then distinguish its productive engines whether national companies or Multinationals. In this context, each country has clear advantages and strengths in certain sectors and capacities and deficiencies to sustain its local market. This basic structure can be affected by several ways but let us mention some: 1. Changes in fiscal and monetary policy that affect the formation of prices on sectors with high impact on local economy. 2. Regulatory changes that present additional pressures on the production of goods or services and redistribution of the average income of citizens.

These factors are a real measure of how the economy is moving and based on these real changes is evident if a discourse framed in the populist approach is in fact radical. Many governments began a similar discourse but not in practice. The former president of Brazil, Henrique Cardoso, told to "Lula" da Silva years after Lula won the presidency that he (Cardoso) had been as liberal as Lula, socialist. In this context, the productive challenges are focused on those who do not have better skills in business management, technological and financial capabilities. Here comes the role of multinationals (The growing power of multinational corporations (MNCs); Naomi Klein) and how they have progressed in local market participation, production of goods and services and to managing certain export sectors and even in services.

In practice, the so-called populist governments have not made radical changes in relation to the internal or external market, with few exceptions, although in practice, there is evidence that investments in developing countries are held back by a lack of legal security. Nevertheless by the moment it is too early to say that populism is radically changing the rules of the game in business but the signs are visible mainly through the Trump and Brexit effect.