Highlights from the DHL Global Connectedness Index 2019 Update

Short video about the state of globalization at the world-level from the DHL Global Connectedness Index 2019 Update.

How Globalized are Countries Around the World?

Summary of country-level results from the DHL Global Connectedness Index 2018.

DHL Global Connectedness Index Background

Introduction to key features of the DHL Global Connectedness Index, including the distinction between measures of the “depth” versus the “breadth” of global connectedness.

Introduction

Size and distance both shape international interactions, as illustrated by the examples of the US and China’s largest trade partners.

Visualizing International Interactions

Online cartograms (“rooted maps”) illustrate patterns of international flows. (Note: This video displays an earlier version of the relevant website. The current version, with expanded and updated content, is at www.ghemawat.com/maps.)

Generalizing the CAGE Distance Framework

Examples of countries’ trade flows motivate the CAGE (Cultural, Administrative, Geographic, Economic) distance framework.

CAGE Distance Beyond Trade

Ghemawat’s CAGE-based “Law of Distance” is applied beyond trade to various types of activity ranging from the international expansion of multinational firms to patterns of who follows whom on Twitter.

CAGE Distance at the Industry Level

The effects of Cultural, Administrative, Geographic and Economic distance vary across industries and companies, as illustrated using challenges faced by Internet-based businesses.

CAGE Distance and Market Selection

CAGE analysis is applied to weighing the effects of size and distance in market selection. (Note: This video displays an earlier version of the relevant website.  The current version, with expanded and updated content, is at www.ghemawat.com/cage.)

CAGE Distance and the AAA Strategies

The company-level effects of CAGE distance are illustrated using the example of Walmart, motivating consideration of three (“AAA”) strategies for deal with distance: Adaptation, Aggregation, and Arbitrage.

Walmart AAA Strategies

The AAA strategies are further elaborated, extending the Walmart example.

Tensions Among AAA Strategies

There are inherent tensions among the AAA strategies, with powerful implications for competitive advantage and for the organization of multinational firms.

Analyzing Value Creation via Global Strategy

Corporate globalization is an option rather than an imperative, motivating the importance of a value-based approach to analyzing globalization strategies.

The ADDING Value Scorecard

The ADDING Value Scorecard parses business value creation (or destruction) via global strategy into the following components: Adding volume, Decreasing costs, Differentiating/increasing willingness-to-pay, Improving industry attractiveness, Neutralizing/normalizing risk, and Generating and using knowledge and other resources.