Companies with manufacturing facilities in a particular country are more cost competitive in exporting goods to world markets when the local currency is weak; their competitiveness erodes when the Brazilian real grows stronger relative to the currencies of the countries where the locally made goods are being sold.
Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. Exporters win when the currency of the country where goods are being manufactured grows weaker and they lose when the currency grows stronger. Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the countries where the imported goods are being made.
Multicountry competition exists when competition in one national market is not closely connected to competition in another national market — there is no global or world market, just a collection of self-contained country markets.
Global competition exists when competitive conditions across national markets are linked strongly enough to form a true international market and when leading competitors compete head to head in many different countries.
Companies that compete multinationally can pursue competitive advantage in world markets by locating their value chain activities in whatever nations prove most advantageous.
Companies with large, protected profit sanctuaries have competitive advantage over companies that do not have a protected sanctuary. Companies with multiple profit sanctuaries have a competitive advantage over companies with a single sanctuary.
Cross-market subsidization — supporting competitive offensives in one market with resources and profits diverted from operations in other markets — is a powerful competitive weapon.
Strategic alliances can help companies in globally competitive industries strengthen their competitive positions while still preserving their independence.
Strategic alliances are more effective in helping establish a beachhead of new opportunity in world markets than in achieving and sustaining global leadership.
Profitability in emerging country markets rarely comes quickly or easily — new entrants have to be very sensitive to local conditions, be willing to invest in developing the market for their products over the long term, and be patient in earning a profit.
