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Brain circuits

Does your company need to strengthen or weaken its regional focus?

Published 30 March 2021 in Brain circuits • 1 min read

This exercise helps you to evaluate whether your company’s regional focus needs to be strengthened or weakened.

Ask yourself the following three questions: 

  1. Is your company’s objective for the next 2-5 years to enter new countries?
  2. Is your company’s objective for the next 2-5 years to increase sales in a region other than your home region?
  3. Is you company’s objective for the next 2-5 years to maintain or increase the number of regional hubs?

If your answers contain at least two ‘yes’, your company will likely need to revise its regional strategy. Research shows that regions have played a crucial role in cross-country integration and continue to do so these days. Companies’ international strategies have regularly used regions as a crucial unit of analysis. The key point – often underestimated by managers – is that regional initiatives do not exclude local and/or global ones. All three co-exist in multinational companies. The crucial tenet is that they need to be aligned to generate most value for the company.

In the aftermath of the COVID-19 pandemic, many companies will need to revise their regional strategies. Several industries are being fundamentally reshaped. Here are the links to two recent cases I wrote on Adidas and PVH Corporation – parent company of iconic fashion brands Tommy Hilfiger and Calvin Klein – and how regional initiatives will likely play a role in their future development.  

For more information on my latest research on regional strategies and how, at IMD, we are working together with companies that are revising their regionally focused strategies, feel free to connect.

Authors

Niccolo Pisani - IMD Professor

Niccolò Pisani

IMD Professor of Strategy and International Business

His area of expertise are strategic management and international business, with emphasis on globalization, sustainability and digitization. One of Niccolò’s key areas of interest is corporate social responsibility – his research in this stream has recently focused on inequality and sustainable cities. 

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