The early 1990s were a wonderful time for global firms. China, India and the countries of the former Soviet Union opened their markets, and the European Economic Area (now the EU) was established. Businesses began to standardize their operating model and created, in the words of IBM’s CEO Sam Palmisano, “the globally integrated enterprise.”
Today, a number of global firms are struggling. Wages in many low-cost countries are rising. Local firms are becoming fierce competitors. The EU and other countries are making it more difficult to move profits around as a way of minimizing taxes. Environmental regulations are tightening. The dollar is strong, but oil prices are low.