Newest edition of think: act CONTENT unlocks secrets of global value creation

• Companies looking to expand globally are chasing a moving target
• New study identifies key questions for companies planning an internationalization of their value chain

The pressure on companies has grown over the past months, as the demands of developing a truly global value chain increase. Even major players, such as toy maker Mattel, have stumbled in balancing low-cost production in Asia with stringent health and safety standards in their Western sales markets. Increasingly empowered and globally savvy customers are forcing companies to reconsider the importance that ethical and social corporate behavior play in extending their global footprint. All of these aspects make 'going global' an increasingly difficult task. The newest edition of 'think:act CONTENT,' Roland Berger Strategy Consultant's executive magazine highlights key questions for managers looking to make the most of a global game in which the rules are constantly changing.

To excel in this situation, business leaders must be aware of current developments and future trends and examine their own business according to a number of key questions, the authors argue. Simply scouring the globe for the lowest cost production site can no longer suffice. Companies must create a holistic global footprint that respects new principles of sustainability
and is backed by strong corporate ethics.

In a first instance, managers must ask themselves whether the internationalization of value creation can:

• Make a valuable contribution to the core business?
• Mitigate and spread out current financial, currency and product risks?
• Achieve sustainable tax advantages over the long term?
• Produce sustainable capital and labor cost advantages?
• Help the company tap into current and future innovation and knowledge potential?

To be effective, managers must create a roadmap that integrates global value creation and sustainability programs into the overall business strategy. They can thus direct their capital and talent toward the most profitable and sustainable growth opportunities, according to the study's authors.

"Each company must decide how much of their operations
they can afford to keep close to home and which parts should be outsourced. Staying in higher-cost locations or near-sourcing has its advantages, including tighter control over productivity and quality standards. But outsourcing may eventually become unavoidable," says Roland Schwientek, Partner in the consultancy.

But, he underlines, a new trend is also emerging: a number of companies are returning their production facilities to the 'old world,' following changes to the corporate environment. The study points to pharmaceutical giant Sanofi Aventis, who rediscovered the European market following improved labor conditions and tax breaks arising from political and economic reforms in Europe and used these to its advantage. Thus, companies have to keep a close eye on these developments to make the best possible decisions for their business.

The publication offers insights into new trends and examines how leading companies tackle global sourcing, manage the creation of R&D facilities in developing countries and build and retain a sustainable human resources policy across all facilities that make up their global footprint.