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Competitive Asymmetry vs. Corporate Strategy: The Perilous Nexus in a Treacherous Chasm

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by Marquis Codjia



In the past, corporate strategists sought to maximize overall firm profitability by devising the best modus operandi that will help achieve results efficiently and effectively. Such a strategy routinely took advantage of the endogenous analogies of a homogenous market or geographic zone, such as culture, regulatory landscape, uniformity in fiscal or monetary policies, and socio-political affinity.

This system of similarities was observed in North America between Canada and the United States, in Western Europe prior to the Schengen Accords that led to higher economic integration within the European federation, and Japan within its Asian economic and geopolitical fiefdom. It has proven very fruitful for many a company because the strategic proximity afforded them lower implementation costs and higher profitability.

Nowadays, globalization along with its cohort of uncertainties is rebalancing the economic landscape and swinging the strategic pendulum in unlikely whereabouts. Globalization forces companies to review their tactical practices because of inherent execution difficulties in cross-cultural environments.

Tactics ought not to be mixed up with strategy. The former deals with detailed maneuvers to achieve aims set by the latter.

The need to control and instill a grain of homogeneity in the global marketplace has forced Western governments – mainly – to found organizations that will promote anti-protectionist measures and greater legislative coordination in world’s business. World Trade Organizations (WTC), North American Free Trade Agreement (NAFTA), and Eurozone are examples of such institutions or zones.

Though these international bodies have help catapult capitalistic free-trade as the preferred ethos, they have proven ineffective at creating a common economic environment in which corporations can engineer the same strategy to achieve their goals across geographical zones or markets.

This failure is due to the complex continuum of events taking place daily in the global arena that forces corporate leaders to include new factors in their strategy matrices.

A strategy matrix indicates how effectively a business entity can achieve profitability by juxtaposing such factors as store location, operating procedures, goods/services offered, pricing tactics, store atmosphere and customer services, and promotional methods.

New factors to be added to the mix are diverse and intricate; hence, an exhaustive analytical list cannot be within the purview of this paper. Some emerging trends relate to online marketing, higher government intervention, shareholder activism, military deals with domestic or foreign vendors, terrorism and war effects, and intellectual property theft.

Business leaders usually lump some of these issues in several corporate functions: risk management, government relations, regulatory, marketing, human resources, etc., and address them at higher echelons only when their magnitude dictates executive decision-making.

This approach is erroneous because it fails to recognize the systemic pedigree of corporate strategy and the notion that it must include all risks and objectives across the organization to be successful. The threats cited earlier are complex and diverse, and they usually change market equilibria by permitting, for instance, small firms to compete against larger rivals in markets they once couldn’t have penetrated.

This is the reason why I ascribe the concept of “competitive asymmetry” to this new phenomenon.

Numerous news headlines illustrate competitive asymmetry in the market. Western luxury brands are nowadays faced with fierce competition from “made in China” faked items, while American pharmaceutical mammoths like Pfizer and Johnson & Johnson observe powerlessly patent-protected pills being fraudulently transformed into generics in India. Another example is activist investor Carl Icahn confronting Time Warner’s management and demanding a change in corporate strategy or organizational structure (segment divestiture, merger, acquisition, etc.).

Other instances include Boeing filing a contract protest with the US Government Accountability Office after it lost a military deal to Northrop Grumman Corp and Europe’s EADS or fast-food giant McDonald losing an eight-year trademark battle to stop Malaysian Indian McCurry Restaurant from using the “Mc” trademark.

These trends are obviously deleterious for most firms within the western hemisphere because that asymmetric rivalry deprives them of the profits their R&D investment must have normally secured over a large time span. The threat is coming principally from emerging and underdeveloped countries because now mature European, American and Japanese markets no longer offer maximal growth prospects and enjoy a legal environment that disincentivizes intellectual property malpractice.

Major companies cannot underestimate the criticality of these emerging trends because they not only stand to lose market share at home but also see their profits eroded in those international markets where growth rates are healthier.

I’ll end with some geoeconomics questions: how will Google’s recent infuriation at China affect the firm’s country strategy given that the current 300 million Chinese computer users constitute a less ignorable niche? What about its overall Asia strategy? Will business prevail over politics? Will Google’s potential exit from the Chinese market propel rival Baidu to domestic and global supremacy? How will that affect the firm strategy with respect to launching other products in a country with 1.3 billion customers? How will this affect Google’s overall profit line?

  1. Pacman
    February 19, 2010 at 7:27 am

    Very good article!

  2. Rueo
    February 19, 2010 at 7:28 am

    Good strategy to talk abt strategy.

  3. Court209
    February 19, 2010 at 7:28 am

    Organization strategies relates to finding the best ways to implement objectives. This article is good in that it shows how that may be complex.

  4. Bart20
    February 19, 2010 at 7:29 am

    Wanted to share this article about another strategy expert
    Former News Corp exec Gary Ginsberg is joining Time Warner.
    Murdoch’s former communications chief, said to be his liaison to the Democratic party, left News Corp in November. His move to Time Warner, where he will advise CEO Jeff Bewkes on corporate strategy as well as marketing and corporate affairs, follows the departure last week of longtime Time Warner corporate communications head Ed Adler.
    Nikki Finke reports, “Ginsberg is telling folks it’s a bigger job than Ed Adler’s and involves more advising and strategy stuff.”
    The New York Post’s Peter Lauria reports that the 47-year-old Ginsberg “will advise Bewkes on a wide range of corporate issues, including oversight of marketing and corporate affairs” and that “his appointment is just the first stage of what will ultimately be a restructuring of Time Warner’s senior-management ranks under Bewkes.”

  5. James
    February 19, 2010 at 7:30 am

    Excellent article

  6. Kinsey1
    February 19, 2010 at 7:31 am

    I’ve been a consultant for more than 20 yrs in strategic management and this is one of the best articles I’ve read so far this year. Strategy and competiton are very complex ideas to think about when you have a multinational firm because of so many ramifications. I’d like to offer another definition of corporate strategy: approach to future that involves (1) examination of the current and anticipated factorsassociated with customers and competitors (external environment) and the firm itself (internal environment), (2) envisioning a new or effective role for the firm in a creative manner, and (3) aligning policies, practices, and resources to realize that vision.
    (source http://www.businessdictionary.com/definition/corporate-strategy.html)

  7. Ragrior
    February 19, 2010 at 7:31 am

    Google better stay in China to get profits.

  8. Stuart10
    February 19, 2010 at 7:32 am

    I disagree that strategy cannot be lumped into one corporate function. And strategy in itself is not risk because you face risks based on your strategy and tactics. If you don’t go somewhere, you won’t risk anything.

  9. Marilyn
    February 19, 2010 at 7:33 am

    Sign me up 🙂 for your blog. I luv’ your materials.

  10. Nirgo
    February 19, 2010 at 7:33 am

    What about governance rules? I think they’re also important b’coz companies sometimes bribe governments in poor countries. Or military incentives.

  11. James
    February 19, 2010 at 7:35 am

    This is interesting. How does Coke, McDonald’s or other big firms manage to sell their products in nations that hate capitalism?

    • Folier
      February 19, 2010 at 7:38 am

      it’s because most countries don’t hate capitalism, they hate the loss of power attributed to a capitalistic society where everyone is allowed to choose things for themselves. In that setting the power players in government lose their ‘god’ like status (overseeing most aspects of their subjects lives) which isn’t something that interests them. The reason for allowing these large capitalistic companies into their territory is purely financial. It brings more money into the society and into their pocket. Sounds like capitalism huh? Think about it….

      • Veepr
        February 19, 2010 at 7:56 am

        countries don’t actualy hate capitalism, they just hate the american type of capitalism. those companies get to distribute in those countries because they bribe a lot of officials, and do things to ensure that their employees will be paid better wages than most people.

    • Fepra
      February 19, 2010 at 7:39 am

      Oh, I don’t think so many countries hate Capitalism.

      I think a lot of countries hate what America has come to represent.

      But, our products: food, movies, music, clothing . . . are sought out by a lot of people.

      When the first McDonald’s opened in Kuwait, the line of cars to get in was six miles long. That is a more extreme example, but, other such premiere introductions of American products have solicited a lot of interest and hype.

      And, if you ask people around the world what they think of Capitalism, many would give it a thumbs up. Those same people would give America a thumbs down.

      Capitalism vs. current American values. They don’t necessarily go hand in hand.

    • artoa
      February 19, 2010 at 7:41 am

      Because people see the perceived value and benefit in a product for which they pay a price. McDonald’s and Coke just figured out the value and benefit people want and delivered that. The result was satisfied customers who flocked to get these products. Generally, people are least concerned with capitalism or socialism, they just focus on what benefit them.

      • Bring30
        February 19, 2010 at 7:41 am

        ts bring $$ to their country and Im sure in order to have McDonald’s there. They had to “donate” funds to the country. It happens often in business. We give you so much money for letting us do business here.

      • Gogoa
        February 19, 2010 at 7:44 am

        because people in other countries like to be fat dumb people

      • Belgrace
        February 19, 2010 at 8:24 am

        Microsoft has solved that competitive problem already by applying a unique strategy for all its market. They dominate the world based on their tactics that are so good.

      • Carl37
        February 19, 2010 at 7:55 am

        cause everyone loves a burger and a coke ! Universal greatness!

    • Raprgo
      February 19, 2010 at 7:57 am

      The government may hate capitalism but the people of the countries most likely don’t feel the same way. If the demand is there, then McDonalds would do well in any country with strong demand.

    • NanaHypo
      February 19, 2010 at 7:58 am

      Because there is a difference in hating capitalism and hating money – Interesting question tho – maybe a bit of research to check out what sort of barriers they had to cross in order to gain entry into these areas – which countries specifically are you refering to?

      • Greek
        February 19, 2010 at 8:00 am

        I would venture to say it’s because the food is darn good!! But it can be that they have people from that same country working to produce their products.

        With such big corporations, their is always a need for employees when you branch out. By hiring employees from that area, and paying them at a rate they would very much appreciate, it’s very unlikely that job seekers would pass up this job opportunity.

  12. Pizzaman
    February 19, 2010 at 7:42 am

    I luv’ the article

  13. Great
    February 19, 2010 at 7:43 am

    BECAUSE THE PEOPLE IN THOSE COUNTRIES STILL WANT TO HAVE AMERICANISM IN THEIR LIFE WITHOUT THE CAPITALISM.

  14. Alrobes1967
    February 19, 2010 at 7:45 am

    Money talks the same language in any country!

    • Cigylur
      February 19, 2010 at 7:48 am

      Coke is better than wine.

  15. NYnicks
    February 19, 2010 at 7:47 am

    thx 4 the article. luv’it. i just signed up also. gd goin

  16. John
    February 19, 2010 at 7:50 am

    Google is losin the strategic battle to China. and we can revert that. they’re willing to sell electricity and gas now. good move?

  17. Moneytalks
    February 19, 2010 at 7:50 am

    Very gd analysis.

  18. WSJLeo
    February 19, 2010 at 7:52 am

    Hi,
    I’m a financial journalist based in NY. I just sent u a priate email. Please contact me when you can. Good work by the way!

  19. Garcia
    February 19, 2010 at 7:54 am

    Companies today have so many product lines in so many countries that it’s almost impossible to cover everything. Either way they’ll always have enough risks to worry wherever they go.

  20. Asianman
    February 19, 2010 at 7:55 am

    Walmart and McDo win overseas ‘coz everybody loves good American food and cheap clothes.

  21. Archie
    February 19, 2010 at 8:21 am

    luv’d it!

  22. Margaret
    February 19, 2010 at 8:22 am

    excellent!!!!!!!!!!!!!!!!!!!!!!

  23. Jed97
    February 19, 2010 at 8:25 am

    where is the french translation? cld u pls put it up. thx

  24. DEco
    February 19, 2010 at 8:26 am

    Google will face many uphills ahead because won’t let them get in their market without intervention and they may risk losing market share. Or profitability.

  25. Push29
    February 19, 2010 at 3:58 pm

    Strategy is what defines people and countries as well as companies. Good article.

  26. omlar
    February 19, 2010 at 4:00 pm

    thx for da artilce. lu’vd it.

  27. Paris298
    February 19, 2010 at 4:03 pm

    why do we have to go overseas to sell to people anyway? it seems they always cheat on our quality of work and do fake products and steal from us and thus reducing our market share and profit.

  28. Proce
    February 19, 2010 at 4:08 pm

    awesome work… u shd teach my friend and quit work. or just write books.🙂 Proce

  29. Benny
    February 19, 2010 at 4:10 pm

    Thx for this, luv it.

  30. Shaq29
    February 19, 2010 at 4:13 pm

    gr8 article

  31. Guccigirl
    February 19, 2010 at 4:14 pm

    thx for the excllent insight.

  32. Convew
    February 19, 2010 at 5:50 pm

    How we reconcile risk and strategy is what will define corporate success in the future. it’s not theoretical debates.

  33. PatMan
    February 19, 2010 at 5:53 pm

    Thx for the great article.

  34. LDuez
    February 19, 2010 at 5:54 pm

    thx for this. luv’d it.

  35. Sart
    February 19, 2010 at 5:56 pm

    awesome reading. thx

  36. Tube
    February 19, 2010 at 5:58 pm

    great work. keep it up, i signed up for your blog.

  37. Romeo
    February 20, 2010 at 7:50 pm

    luv it thx

  38. Gateo30
    February 20, 2010 at 7:54 pm

    Thx for the article, luv it:)

  39. PeterPan
    February 20, 2010 at 7:54 pm

    Learned a lot here. i signed up for ur blog. give us more good stuff……..

  40. Rwaro
    February 20, 2010 at 7:56 pm

    thx for sharing. hello everyone

  41. MrFara
    February 21, 2010 at 2:56 pm

    thx 4 the wonderful article. I wonder if u can write more abt management processes. will luv it ‘coz i’m studing that rite now at NYU.

  42. Rose
    February 21, 2010 at 2:58 pm

    thx :)…………

  43. Jonhhy
    February 22, 2010 at 5:42 pm

    Cool article. Learnt a lot

  44. Asteroid@30
    February 22, 2010 at 5:45 pm

    Why happens when there’s no strategy then? I think we’d all be dead ‘coz the only difference b/n other animals and us is our brains.

  45. Arsenal
    February 22, 2010 at 5:45 pm

    Cool

  46. GuyMass
    February 22, 2010 at 5:47 pm

    😉

  47. Liegue
    February 24, 2010 at 4:45 pm

    i’ve used google so many times for school and work and i agree with the author that if used well, it can be great aid.

  48. MoscowKid
    February 24, 2010 at 4:53 pm

    this is great, luv’d it. this is exactly what i needed to understand.

  49. View35
    February 26, 2010 at 9:41 am

    Thx for this

  50. Newear
    February 26, 2010 at 9:43 am

    I think politicians use same strategy when they go vs. a smaller rival.

  51. AnnickJ
    February 26, 2010 at 9:46 am

    🙂 Luv’ it.

  52. PhilDr1958
    February 26, 2010 at 9:48 am

    Great posting. Keep it up. I sign up to your site!

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