This article was originally published in Chinese in the Harvard Business Review Annual Report on the Future of Management 2025.

Chinese enterprises are now in the global spotlight, facing increasingly complex challenges and expanding opportunities. The current era is critical, with major shifts in the international landscape which provides a strategic window for China’s development. Economic globalization remains a major and irreversible trend, while the common crises facing humanity require the building of a community of human destiny.

As an important driving force of economic globalization, the need for companies to find new momentum in balancing globalization and localization has become a core strategic issue for expansion and competition.

Against this backdrop, Chinese enterprises must develop a clear insight into the profound changes in the global economic landscape, define a clear strategic direction and continue to enhance their international competitiveness. How to balance global perspectives and local needs in the process of globalization has moved from a theoretical discussion to a serious practical issue. This multidimensional challenge heightens uncertainty in the global operations of organizations and places greater demands on strategic planning and execution.

Five stages of enterprise globalization

The globalization of enterprises can usually be divided into five progressive stages, each of which reflects the evolution of the enterprise from basic international market expansion to deep globalization.

1.Globalized sales

At this stage, enterprises view overseas markets as mere sales channels and meet international market demand by exporting products. At this point, the definition of globalization is limited to market coverage, and the core competencies of the enterprise are still largely focused on the home country.

2.Globalized operations

As overseas markets expand, companies begin to set up resident teams to serve local customers directly and innovate their products to better suit market needs. Such localized operations not only provide a deeper understanding of culture and consumer habits, but also enable companies to reach a self-supporting level of revenue locally, driving further growth.

3.Globalized capacity deployment

The deepening of globalization requires companies to distribute their core competence modules where they are best suited according to the comparative advantages of different regions. Whether it’s R&D, production, assembly, logistics or back-office functions such as finance and human resources, companies need to optimize the allocation of resources globally to enable efficient operations. This stage marks the transformation of firms from simple market participants to builders of global value chains.

4.Globalized talent

As companies deepen their globalization strategies, the globalization of talent is a key challenge. In the early stages, Chinese companies usually rely on local talent to drive internationalization, but when companies reach a certain level of globalization, how they attract and integrate the best global talent becomes an important indicator. The ability to build and work with cross-cultural teams has a direct impact on the global competitiveness of an organization.

5.Globalized organizational culture

The highest level of globalization is the globalization of organizational culture. Culture is the core values and codes of conduct that a company develops over a long period of time, such as Huawei’s “Wolf Culture” or IBM’s “Basic Beliefs.” In the early stages of globalization, companies tend to focus on sales, operations and capacity deployment, and are yet to develop a unified cultural identity. The cultural imprint of globalization can only be formed when a company has accumulated a global presence for a sufficiently long period of time, absorbed a large number of multinational talents and continues to pass on its core values. This cultural imprint allows employees to embody a consistent pattern of behavior and philosophy wherever they are, truly transforming the company into a globally competitive multinational.

Throughout these five stages, an enterprise not only shifts from market expansion to deep organizational cultivation, but also from business globalization to cultural globalization, laying a solid foundation for long-term development.

Dialectical balance between globalization and localization

In the process of enterprise globalization, globalization and localization are not opposites, rather they are two sides of an interdependent coin, closely linked and complementary at all stages of enterprise development. This relationship runs through the whole process, from market development to organizational culture shaping, and companies need to find the right balance between the two.

In the early stages of global expansion, companies must be conscious of the importance of localization.

Especially in the global sales phase, expanding local sales networks and understanding the local market needs are the foundation for a company to take root and grow. With globalized operations, proper localization is reflected in the construction of market and operations teams including local talent at their core; at the same time, the allocation of global resources must be combined with localized capacity building to ensure local execution tracks with the company’s global perspective.

In terms of globalized talent development, attracting local talent and integrating them into the corporate ecosystem is key. But, as mentioned, this does not mean compromising the fundamentals of the globalization process, in fact, globalization puts increased emphasis on improving the multicultural adaptability and management efficiency of companies through mixed teams and cultural integration. Companies need to maintain their global strategies while respecting local cultures.

There are two keys to success in this process:

Customer demand orientation. Rather than relying solely on local talent, companies should provide services and products based on the needs of the local market and in a “language that local customers can understand.”

Budget awareness and robust operations. Globalization requires companies to have strict cost management and operational capabilities to ensure that each step is taken when ready to sustainably develop the competencies required for globalization in practice.

The tension between globalization and localization is particularly acute in the shaping of organisational culture. While product development, production and sales levels can be highly localized, the organisational culture of the company must remain unified globally. At the heart of a global organisational culture is the creation of a shared vision and values that permeate all regions and divisions of the company, rather than simply piecing together elements of the culture of each local subsidiary. If the culture of each location is fragmented, it will inevitably affect the long-term stability and synergistic development of the enterprise.

A successful global organisational culture is usually rooted in the cultural DNA of the company which has been built up during its initial domestic growth.

For example, Huawei’s ‘Wolf Culture’ and TCL’s ‘Spirit of Change’ are all drawn from China’s entrepreneurial journey and gradually embodied by global employees during the globalization process. These cultures must be deeply embedded in the perceptions and work of local employees, and only if they are respected and understood globally can they support the global management and operations of the organization.

A globalized organisational culture does not form spontaneously; it needs to be forged and transmitted through a systematic approach.

Here are a few paths to practice:

Cultural export and landing. Dispatch core cadres who are familiar with the corporate culture to the local market to help build the team, pass on the culture, and drive market expansion

Reverse input from key local talent. Select outstanding employees from local markets to return to headquarters to receive cultural training, so that they can understand the company’s history, mission and code of conduct, and enhance the sense of cultural identity.

Cross-regional rotations and exchanges. Arrange for global staff rotation or cross-market training, so that they can experience first-hand the success stories of teams in different countries under the guidance of the corporate culture, strengthening cultural consistency and the spirit of collaboration.

Through this three-dimensional culture transfer mechanism, companies are not only able to maintain the consistency of organisational culture on a global scale, but also cultivate deep cultural cohesion, thus laying a solid foundation for the long-term development of globalization.

Global localization paths and the achievement of balance:

Cases and insights

‘Glocalization’ is not only a market entry strategy, but also a comprehensive system covering products, operations capabilities and culture, and is a strategy for the deep integration of globalization and localization. From the successes of Apple and Huawei, we can summarize two typical global localization paths and explore how to achieve a dynamic balance in practice

Path 1: Globalization before localization – Apple

Apple’s globalization strategy is centered on standardization, with its unique branding and innovative design rapidly capturing market share. However, as the market grew, Apple gradually made localization adjustments in different regions, such as launching specific color schemes and feature optimization for the Chinese market, which enhanced market penetration. Apple’s success shows that even when globalization comes first, companies still need to adapt locally to the characteristics of the market in order to achieve a balance between global operational efficiency and market demand.

Path2: Localization before globalization – Huawei

Unlike Apple, Huawei has adopted a “localization before globalization” strategy, especially when entering developing markets, adjusting its products and services according to local needs, and building local teams to understand market demands. In this way, Huawei gradually rolled out adaptive products globally, ultimately achieving global standardization and a leading position in the global communications field. This strategy emphasizes the accumulation of market experience through localized practices and the standardization of products and services after gaining a deeper understanding of market needs. It was through this path that Huawei eventually overtook Ericsson as the global communications leader in 2013.

Regardless of which path is chosen, the balance between globalization and localization is not a one-off event, but a dynamic adjustment process whereby companies need to flexibly optimise their strategies at different stages in response to market changes.

Aggregation strategy: New paths to meet the challenges of globalization

Against the backdrop of an increasingly complex global economy and business environment, competition has grown fiercer and it has become significantly more difficult for companies to globalize. In this environment, aggregation strategies have emerged as an important way to enhance global competitiveness. Through resource integration, scale expansion and operation optimization, the aggregation strategy not only improves efficiency and reduces costs, but also creates stronger international competitiveness for enterprises, especially in new energy, intelligent manufacturing and other areas that require high supply chain synergy.

There are several key conditions that need to be met for the successful implementation of an aggregation strategy.

Firstly, economies of scale and market concentration are central prerequisites. The concentration of market demand is high enough to support large-scale resource integration, which in turn reduces costs and improves profitability through centralized procurement and production.

Second, standardization of products and services, as well as compatibility of technologies and processes, can reduce complexity and costs in the integration process and improve operational efficiency. At the same time, a stable supply chain system is essential. With the most complete supply chain system in the world, Chinese companies have a natural advantage to implement an aggregation strategy.

Additionally, strong management capacity and a sound legal and regulatory environment are crucial. An efficient management team coordinates the different business units to ensure operational efficiency after integration, while a sound legal environment provides clear boundaries for behavior and reduces risks.

Finally, sufficient capital is the guarantee of the success of the aggregation strategy. Large-scale integration requires a large amount of financial support, enterprises need to have long-term financing capabilities or access through strategic cooperation to introduce external funds.

Regional integration of resources is particularly important in the process of globalization.

Taking the New Energy Vehicle (NEV) industry as an example, China is leading in the global production of NEVs, and the international market for related supporting industries such as charging infrastructure is also growing at a fast pace. In this context, upstream and downstream enterprises working together is obviously more advantageous than going it alone. This can not only reduce the risk, but also form a strong industrial cluster effect.

The key to the success of a brand enterprise lies in having a long-term industrial vision, insight into the direction of the global industrial chain, and establishing long-term cooperative relationships with supply chain partners to realize resource complementarity and market synergy. For non-end-product companies, it is especially important to keep up with the global industrial layout and understand global market trends. For example, the lithium battery structural components enterprise Kodali entered European markets such as Hungary with the help of the wider development of China’s NEV industry.

When implementing an aggregation strategy, companies also need to focus on the diversity of industry standards.

International projects often rely on international standards and supply chain databases, with high-end projects following European and American standards even in emerging markets such as Southeast Asia. Enterprises need to design flexible responses to different markets in order to meet high standards while also adapting to actual needs.

The globalization experience of Japanese companies is worth learning from: in the 1990s, Japanese think tanks promoted globalization by providing companies with intelligence and policy coordination support through in-depth studies of industry standards and economic policies in target markets. Chinese enterprises can learn from this model and explore the new path of standards optimization and supply chain integration in Singapore, Hong Kong and other regions, so as to inject new energy into their globalization strategies.

Global production and resource allocation

In the complex context of globalization, the configuration of production, manufacturing and sales modules no longer seeks to maximise “economic effects,” but rather to find the optimal solution in a comprehensive balance of multi-dimensional factors. Especially in the current uncertain global market, security, supply chain support and trade barriers and other non-economic factors have an increasingly significant impact on decision-making.

Security has become a primary consideration for businesses across their global locations. While certain regions may offer low labour costs and abundant resources, political instability or security issues can significantly increase operational risk. For example, although Africa is rich in resources and has huge market potential, poor infrastructure and a shortage of skilled labor mean that companies need to bear a higher cost of security when investing there.

Huawei and TranSwitch, for example, both have a significant presence in the European market, but their manufacturing bases are still largely located in China, a decision that is partly based on China’s relatively stable security environment and mature manufacturing ecosystem. This suggests that when moving across borders, companies need to find a balance between potential risks and cost-effectiveness.

In recent years, the transfer of manufacturing to Southeast Asia has become a hot topic, but the reality is often more complex. In Vietnam, for example, although some low-end assembly links have been relocated locally, the production of core components is still concentrated in China.The reason is that China is the only country in the world with a complete industrial chain, from raw materials to components, and this is difficult for other countries to copy.

Therefore, when considering the layout of production bases, enterprises need to ensure the integrity of the supply chain and supporting capacity. If the core support can not be found, then the relocation of some factories may not optimize overall benefits, although it may reduce labor costs in the short term.

As geopolitical and trade relations change, trade barriers become an important consideration in the global landscape. In recent years, with the intensification of strategic competition between China and the US, tariffs and policy barriers for Chinese companies in Europe and the US have been escalating. In the face of this complex international environment, enterprises need to be more flexible in adjusting global resource allocation to minimize the impact of barriers.

Mexico, as an example, provides Chinese companies with low-cost access to the US market by virtue of its geographic advantages. However, as the international situation changes, Mexico’s advantage may diminish due to policy adjustments. Therefore, companies need to pay close attention to the trade environment among major markets when making decisions in order to dynamically optimize their global layout.

The optimal global resource allocation strategy also needs to match the company’s industrial layout and its own capabilities.

Porton PharmaTech chose New Jersey, US, as its R&D center because the US is at the heart of global R&D for innovative medicines, while its manufacturing site is located in Slovenia to comply with US policy requirements for supply chain security. This kind of global layout based on industrial demand and market orientation helps enterprises to enhance their global competitiveness and better cope with external changes.

In the process of internationalization, businesses need to consider three key maps: the map of global political and economic relations, the map of the global industrial layout and its future direction, and the full map of their own capabilities. By comparing and analysing these three maps, enterprises can identify global opportunities and potential risks, so as to formulate a more measured resource allocation strategy. In this process, the focus of decision-making is no longer about where to find the lowest cost, but where to realize long-term strategic value and competitive advantage.

New productive forces: cracking the critical path of China’s economic transformation

After four decades of reform and opening up, China’s economy has produced astonishingly high growth, however, with the intensification of uncertainties in the global environment and the transformation of its domestic growth model, the country is facing a new economic test.

How can this challenge be overcome? New productive forces may be the right approach.

The core of new productive forces lies in continuous innovation on all fronts. It provides a sustainable impetus for the Chinese economy to cope with the global slowdown and internal growth difficulties. As the key to finding a new engine for the domestic economy, new product forces also provide an important path for China to reshape its competitive advantage in the context of the restructuring of global industrial chains.

The essence of global competition is found in innovation, and Chinese enterprises have a unique advantage in this regard. Relying on the massive market requiring high levels of agility, Chinese enterprises have demonstrated strong competitiveness in a number of areas. From consumer electronics to e-commerce services to logistics systems, Chinese companies have always been guided by market demand and rapid innovation iteration. For example, China’s speed of innovation in the field of packaging equipment far exceeds that of the Southeast Asian market, reflecting the efficient adaptability and creativity of Chinese companies. National policy support will further unleash this potential and help Chinese companies to take a more favorable position in global competition.

Emerging industries, especially high-tech fields such as biomedicine, new energy and artificial intelligence, have become the core of future international competition. The advancement of new productive forces will drive transformation and development in these frontier areas. Chinese companies have made remarkable achievements in the new energy sector, but still need to accelerate breakthroughs in other high-tech areas. The policy orientation will lay a solid foundation for Chinese companies to dominate these industries.

In addition, the new productive forces not only represent a transformation of China’s economic strategy, but also reflects China’s active commitment to global sustainable development. By promoting high-quality development, China has made contributions in areas such as environmental protection, employment and social equity, and has injected the power of peace and cooperation into the international community. This development model has provided strong support for Chinese enterprises to win international respect and recognition.

In the process of globalization, Chinese enterprises should go beyond mere competition and pay more attention to how to benefit the local community and achieve win-win outcomes. Driven by new productive forces, Chinese companies are not only able to cope with domestic and international challenges, but also pursue sustainable long-term development in global competition.

The future of Chinese corporate globalization

The success of an enterprise not only depends on its products and markets, but is also deeply rooted in the depth and breadth of entrepreneurial spirit. The process of enterprise growth is essentially the process of entrepreneurs constantly cultivating and innovating themselves. Successful global business leaders often possess a strategic vision, a spirit of innovation, organisational adaptability, a win-win mentality and a strong sense of long-termism.

In the face of increasingly complex challenges in the process of globalization, Chinese enterprises need to enhance their international competitiveness through innovation, optimising supply chains, promoting organisational change and improving entrepreneurial cognizance.

Enterprises need to gain advantages through original innovation and technological breakthroughs. For example, BYD has not only taken the lead in the China market, but also demonstrated strong competitiveness in the global market through its continuous R&D of its product offerings and industry chain integration. At the same time, optimizing the global supply chain and enhancing resilience are inevitable requirements to cope with external risks and policy changes. Enterprises should flexibly adjust their strategies according to different market demands and policy environments, and build a smart supply chain to enhance global competitiveness.

Organizational structure and decision-making mechanisms of enterprises need to be adjusted in tandem with the globalization process. Decentralised organisational structures and efficient information and decision-making processes can help enterprises to respond quickly to the ever-changing market demands. Entrepreneurs also need to continuously improve their cognitive framework and broaden their decision-making horizons in this process. Paying attention to global political and economic changes and cutting-edge technological development can help with forward-looking strategic decisions.

Against the backdrop of the current changes in the global political and economic landscape and the strategic competition between China and the US, Chinese companies are facing severe challenges and must maintain keen market insights, ensure stable cash flows and enhance their risk resistance.

The intelligent revolution has brought new opportunities for various industries, enterprises should seize this trend, promote the transformation from “going out” to “going up”, improve the quality and price ratio, and deeply docking the global market.

The intelligent revolution has brought new opportunities for various industries, and businesses should seize this trend, look to shift from “going out” to “going up,” improve quality and price ratios, and connect with the global market.

As one of the top business schools in China, CKGSB will increase the depth of its programmes in areas such as global politics, history, AI and digital transformation in the future. This is designed to cultivate business leaders with global vision and an innovative spirit, and help Chinese enterprises achieve sustainable growth and longevity in the complex international environment.