What primarily drives a firm's decision to adopt a global strategy?

A firm's decision to adopt a global strategy is primarily driven by the need for competitive advantage. Global strategies enable companies to leverage their strengths in a broader market context, allowing them to capitalize on opportunities that exist beyond their domestic borders. This approach often includes efforts to enhance market share, innovate products and services, and optimize resources across international markets. By pursuing a global strategy, firms can achieve economies of scale, access new customer bases, and benefit from diverse market insights and innovations that might not be available locally.

While reducing operational costs is also an important consideration for many firms, it is often a byproduct of a more comprehensive strategy aimed at gaining competitive advantage rather than the sole motivator. Similarly, being locally relevant or having a preference for non-diversified markets typically limits a firm's global ambitions and does not align with the broader objectives of gaining competitive edge on a global scale. Therefore, the need for competitive advantage remains the primary driver for firms looking to expand their strategies internationally.