Title: A national competitiveness-based portfolio approach for international strategic management: illustrated with the case of the TATA industries

Authors: Holger Schiele; Rainer Harms; Shrestho Banerjee

Addresses: Department Business Administration, University of Twente, PO Box 217, NL-7500 AE Enschede, The Netherlands ' Department Business Administration, University of Twente, PO Box 217, NL-7500 AE Enschede, The Netherlands ' XLRI - Xavier School of Management, C.H. Area (East), Jamshedpur 831001, Jharkhand, India

Abstract: International firms with multiple business units are dealing with the question of how to balance the international dimension of their business portfolio. Which business units should go international and where should they contract or expand their international activities? Previous research lacks tools providing a foundation for this decision. Drawing on the concept of national competitiveness, we make a crucial contribution to the BCG matrix. We develop a national competitiveness-market growth matrix to identify business units that are promising targets for internationalisation. The case of TATA illustrates the meaningfulness and viability of this new matrix. Three quarters of the analysed business units of India's most successful conglomerate are active in the country's strongest export industries. This finding substantiates Porter's home base thesis: internationally active firms should capitalise on their geographical advantages. Consequently, we postulate that international managers should take precautions if a business unit of their firm has its home base in a country whose 'revealed comparative advantage' in this industry is less than one, i.e. below average.

Keywords: industrial clusters; India; international management; national competitive advantage; portfolio analysis; strategic management; TATA Industries; national competitiveness; internationalisation; geographical advantages.

DOI: 10.1504/EJIM.2014.058494

European Journal of International Management, 2014 Vol.8 No.1, pp.106 - 125

Published online: 14 Oct 2014 *

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