Rooted Maps

Presented By

Chirag Nahar Swapnil Dandekar Sampada Bodas

About the Author

• Pankaj Ghemawat is currently a Professor of Global Strategy at IESE Business School and Between 1983 and 2008, was on the faculty at the Harvard Business School where, in 1991, he became the youngest person in the school's history to be appointed a full professor. 

Professor Ghemawat earned his bachelors degree in Applied Mathematics from Harvard College,, and his Ph.D in Business Economics from Harvard University.

He has been featured in Harvard Business School's Faculty Seminar Series: "Great Ideas from Business Thought Leaders."

http://www.ghemawat.com/default.aspx

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The author’s quote

Remapping your strategic mind-set

In this article he writes of how we can shake up our thinking by looking at the world from the perspective of a particular country, industry, or company.

He introduces the concept of “Rooted” maps and how they can help one unearth hidden opportunities and threats.

Before We Remap, Lets Recap!

An international bestselling book by  Thomas Friedman  that analyzes  globalization, primarily in the early 21st century.

It includes fresh stories and insights to help us understand the flattening of the world.

The World is Flat

How did the world get flat ??

GLOBALIZATION!!

The Ten Forces That Flattened the World

Collapse of Berlin Wall

NetscapeWork Flow SoftwareUploading

OutsourcingOffshoringSupply-ChainingInsourcingIn-formingThe Steroids

Flattening of the world means,

“that we are now connecting all the

knowledge centers of the world together into a single global network,

which if politics and terrorism do not get in

the way – could usher in an amazing era of

prosperity and innovation.”

Are we really Globalised??

Factors in favour of semi-globalized world :-CultureAdministration/PoliticsGeographyEconomy

Or are we Semi- Globalized??

If yes… then how to redefine global strategy??

Measuring differences in terms of the distances between countries along a variety of cultural, administrative, geographic and economic factors – the CAGE framework

Culture refers to the attributes of a society that are sustained mainly by interactions among people rather than by force

Administrative attributes encompass laws, politics and institutions that emerge from a political process

Geographic attributes of countries that can affect cross-border economic activity mostly grow out of natural phenomena

Economic distance refers to differences that affect cross-border economic activity and integration

The CAGE framework

The CAGE framework

It may also be used to understand patterns of trade, capital, information, and people flows.  

One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors

A country-level example

China seems more attractive than India to general purpose U.S. investors on many geographic and economics grounds, but less attractive on a number of cultural and administrative grounds

THEN WHY NOT TRY,REMAPPING THE WORLD MAP

“ ROOTED MAPS ”

Now, that we have redefined global strategy….

What Is Rooted Map?

A new strategic research tool which can help businesses identify the impact of borders, distances and differences in global markets

The author has called a “rooted map”—to help leaders enhance their intuition about the opportunities and threats inherent in our semi- globalized world.

In the real world, though, geographic distance and differences in culture and policy matter. But to better reflect this reality, rooted maps depict the world from a specific perspective and with a particular purpose in mind. 

Using rooted maps to understand opportunities

The distances between the countries or regions depicted in rooted maps represent vast untapped opportunities to create value across borders in ways that recognize differences rather than trying to obliterate them.

The starting point is creating a reference map that depicts your industry environment but doesn’t yet reflect your own company’s or country’s unique place in it. 

Then comparing with the rooted map relating to the specific country, company or industry.

How to remap your strategic mind-set?

Understanding the world and measuring distance

Clarifying threats Visualizing global risks

Example :- Understanding world and measuring the distance

The implications of the map

The largest markets where US films dominate are all English-speaking countries

This finding helps explain why Europe is so big in the Hollywood map, and the pattern also holds for other industries, making language a useful proxy for cultural distance

 The maps also reflect administrative distances spurred on by the extensive interventions of many governments in the film industry

Eg.  China allows only about 20 foreign films to be released in its cinemas each year, a trade restriction that prompted the World Trade Organization to rule against it recently.

Finally, the maps underscore how much geography still matters. Film exports decline as distance from the United States increases.

Example 2:- Maps to clarify threat

Rooted maps also can help strategists detect looming threats—competitive ones, as well as broader external risks.

The idea that capital knows no boundaries becomes questionable when a mapping perspective is applied.

The exposure of foreign banks to the “PIIGS” countries (Portugal, Ireland, Italy, Greece, and Spain) has been a major concern recently.

Together, these five are only a minor part of the global banking system. But when this issue is viewed through two rooted maps, drawn from the perspectives of Germany and the United States, respectively, we can see how much more exposed Germany is to these countries in comparison with the U.S. 

Rooted Map showing German exposure

Rooted Map showing the U.S.A. exposure

Example 3 :- Visualizing global risks

Rooted maps can illuminate global energy and supply chain risks.

Eg: Oil consumers in US & China The map portray starkly different profiles of

import dependency for the world’s two largest oil consumers, the United States and China.

Rooted Map showing the U.S.A.’s Oil Import dependency

Rooted Map showing China’s Oil Import dependency

Rooted Map showing Libya’s oil export partners

The implications of the map

USA & China are the world's two largest oil importers.

The countries from which they both import are different and differ in size of quantity imported

Any crisis or political shift in this exporting nations would affect the strategic position of both these countries importing oil

Libya is exports most of its oil output to European nations. The ongoing European crisis may force Libya to export its oil to the U.S. or China

Take Homes

In short, by using rooted maps, senior executives can make their perceptions of the business environment more accurate.

Through the use of a rooted map businesses can reduce the “distance” between them and their markets, gain insight into the preferences of that market, detect looming threats such as competition and broader external risks, etc.

THANK YOU

Reference links:-https://www.mckinseyquarterly.com/

Remapping_your_strategic_mind-set_2837#1http://www.ghemawat.com/