Answer to Question 1
The emerging global economy changes thinking about competitive strategies in two
major ways. First, the sheer size and complexity of the global economy means that any
organization that chooses a strategy allowing it to compete industry-wide is taking a very big
risk. Competing in many different countries, with products localized to the language and culture
of those countries, is an enormous and expensive task.
The second major way today's world economy changes competitive strategies is that its size,
combined with the Internet, enables unprecedented product differentiation.
Answer to Question 2
Supply chain profitability is the difference between the sum of the revenue generated
by the supply chain and the sum of the costs that all organizations in the supply chain incur to
obtain that revenue. In general, the maximum profit to the supply chain will not occur if each
organization in the supply chain maximizes its own profits in isolation. Usually, the profitability
of the supply chain increases if one or more of the organizations operate at less than their own
maximum profitability.
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