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Peripheral Hubs for Global Business

To commemorate C. K. Prahalad’ s work, strategy+business published an article that was in progress at the time of his death in April 2010. C.K. Prahalad was the Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at the University of Michigan’ s Ross School of Business and the author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing, 2005). The article was published with the permission of his family.

In it, he and his coauthor, Hrishi Bhattacharyya, present a strategy with important implications for global companies and cities as well. They argue for a global corporate structure with no headquarters. Instead of a single center, companies would establish core “hubs” in most of 20 gateway countries of today’s global world. This hub strategy will enable a company to provide products and services everywhere. Companies can accomplish this only with a more decentralized and comprehensive strategy that (1) customizes the products and services according the hubs around the world, (2) unites the decentralized units around a platform of proprietary knowledge and competencies, and (3) arbitraging globally to gain cost-effectiveness, productivity and efficiency.

Source: strategy+business

Download the paper: C.K. Prahalad and Hrishi Bhattacharyya “How to Be a Truly Global Company”