Global Strategy and MNC Capabilities

Strategy in a global setting involves competition in industries that extend across national boundaries and among firms with different national home bases that may tap into strategic resources in more than one location. The resources that the firm accesses from its home country provide it with international competitive advantage only if they are relevant in other markets, if they are transferable in those markets, and if the value created from international expansion is appropriable. These resources include tangible assets and factors of production, but importantly also the capabilities the firm develops. Similarly, the resources that it taps from other contexts provide it with further competitive adnate only if these resource are more complementary to the firms exiting resources, transferable to the locations where it can exploit them, and appropriable. The resulting RAT and CAT tests provide a framework for international strategic decisions with an emphasis on developing, acquiring, and transferring capabilities.