On August 1 Uber announced that it is selling its Chinese brand and operations to Didi Chuxing for $1 billion, its annual burn rate in that market, in exchange for a 20% stake in the local competitor.
The Uber-Didi deal reminds us that before your global strategy takes a platform-based approach, there are at least five questions to ask:
- How asset-light is the proposed approach really?
- Are there really global network economies?
- Do switching costs help sustain network advantages?
- What cross-country differences might favor national/local competitors?
- What are the sociopolitical constraints on market dominance?
Read more on HBR.org article written by Pankaj Ghemawat
