Companies should internationalize because the company is good at something that travels or because the industry is global in scope. And when those companies internationalize, MIT Sloan Professor Don Lessard provides a framework for exploiting and enhancing that can lead to a successful internationalization: RATs and CATs.
Professor Lessard shared this framework with MIT Sloan alumni in his Alumni Weekend workshop, “RATs and CATs: A Capabilities-based Guide to Internationalization.”
RATs refers to what competencies does the company have that it is seeking to exploit internationally.
• R: Are they Relevant in other countries?
• A: Are they Appropriable—can the company create value in another place?
• T: And are they Transferable—can the company capture that value in that other country?
CATs refers to that competencies the company might be able to tap and develop in a particular country.
• C: Are they Complementary?
• A: Are they Appropriable?
• T: Are they Transferable?
“This is a corporate strategy framework,” Lessard says. “How do you think about corporate strategy in terms of exploiting and enhancing capability?”