Imagine Rajesh & Co. Pvt. Ltd., a Pune-based textile exporter. Five years ago, they sold only within India. Today, they source cotton from Egypt, manufacture in India, sell to retailers in Germany, and have a warehouse in Singapore. That journey — from local to global — is exactly what Globalisation Strategy is about.
Globalisation Strategy is a firm's plan to expand its operations, markets, or value chain across multiple countries to gain competitive advantage. The ICAI curriculum identifies three core approaches under this: Multidomestic Strategy, Global Strategy, and Transnational Strategy. In a Multidomestic Strategy, the firm customises its product and approach for each country (think: McDonald's serving McAloo Tikki in India). In a Global Strategy, the firm standardises everything worldwide to achieve cost leadership — same product, same process, everywhere (think: Intel chips). A Transnational Strategy tries to balance both — global efficiency and local responsiveness simultaneously — which is the hardest to execute but often the most powerful.
Why do firms go global? The key drivers are: access to new markets (higher revenue), access to cheaper inputs (labour, raw material), economies of scale (spreading fixed costs over larger output), and knowledge transfer (learning best practices from global operations). The flip side — the risks — are equally important for your exam: political risk, exchange rate risk, cultural misfit, and regulatory complexity. ICAI expects you to evaluate both sides.
Two concepts are frequently tested alongside this: Porter's Diamond Model (which explains why certain nations develop competitive advantage in specific industries — e.g., India in IT services) and the EPRG Framework — Ethnocentric, Polycentric, Regiocentric, Geocentric — which describes a firm's mindset toward global operations. A Geocentric firm treats the world as one market and hires the best talent regardless of nationality; an Ethnocentric firm imposes home-country practices everywhere. For exam answers, link the strategy type to the EPRG stage — it earns extra marks.