The Globalization Capability Gap: Execution, Not Strategy, Separates Leaders from Laggards

Over the past few decades, the rise of emerging markets—initially as sources of cheap labor and then as rapidly growing consumer markets and centers of capital investment and innovation—has caused most companies of size and stature to enlarge their global ambitions. But despite this concerted push to globalize, few companies are ready to build and run truly global organizations and operations.

  • Only about 10 percent of companies believe they have the full complement of capabilities required to win overseas. Most companies are barely mastering the basics.
  • A smart strategy is necessary but insufficient. The winners in globalization also execute better than their competitors.
  • Companies struggle with three specific areas overseas: strengthening their go-to-market, logistics, and other value-chain activities; aligning their organization to support the global agenda through, for example, the spread of best practices; and mastering mergers and acquisitions.
  • Line managers who run businesses or regions are much more pessimistic about their companies’ global readiness than headquarters staff.
  • Midsize companies are at the greatest risk in going global. They are less nimble than smaller companies and do not have the scale or systems of larger ones.

Those are the primary messages of the Global Readiness Survey, which was conducted jointly by BCG and IMD business school. (For details on our methodology, see the sidebar “What We Asked, Whom We Surveyed, How We Scored.”) In this report, we explore our findings and take a detailed look at what separates the leaders from the laggards in globalization.

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Despite high aspirations, few companies are ready to build and run truly global organizations and operations.

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