As the companies that were once the suppliers to multinationals have grown into multinationals themselves, competitors can suddenly come from anywhere, according to Hal Sirkin
Could you explain the concept of globality?
In the late 1990s, multinationals went to the developing world basically playing a giant labor arbitrage. They outsourced to low-cost companies in India and China — and in the process taught them how to produce quality products. These developing companies built scale based upon the volumes they received from the developed country companies and figured out how to serve the developed world. Some were happy merely being suppliers. Some asked themselves, "Why can't we be the multinational?" And they began to compete with their outsourcing customers.
[This article has been reproduced with permission from Qn, a publication of the Yale School of Management http://qn.som.yale.edu]