Global companies (like Coca-Cola and McDonald’s) selling the same product in the same way worldwide.
How to be a successful global company
1. Shared values (or corporate culture)
The company’s culture must give every employee worldwide the same purpose, particularly to:
- freely exchange knowledge between countries.
2. Sell successfully to Europe, North America and Asia
Success (i.e. customer delight) in these three main markets of the world requires global
branding, selling something unique with brilliant customer
service (like Coca-Cola).
A joint venture with a local company may be necessary to gain market knowledge or retail
outlets in a particular country.
China and India are particularly profitable and growing markets -
pictured right is a McDonald's in China.
3. Hire the right people
Managers in global companies must be internationalists (preferably fluent in the local
- work successfully with employees from other countries.
- see every country as a potential market opportunity.
4. Think global, act local
This strategy is sometimes referred to as “glocal” and combines:
- a global corporate strategy and
- autonomy given to subsidiaries in each country (making them highly responsive to
local customer needs).
The boss (chief executive) must
6. Be patient
Instant success in an overseas market is unlikely, because it takes time to learn how to sell effectively
For example, Disneyland Paris (pictured right) made years of losses before it became
7. Accept cultural differences between countries
Employees and customers may act and think differently in different countries.
These differences must be taken into account and valuable lessons learned from other
Key quotes explained
“Sells the same things in the same way
- Theodore Levitt (American marketing professor,
This is how Levitt defined a global company in an influential 1983 Harvard Business Review article. He invented
the term “globalization”.
“The borderless world” (
the title of a 1990 book)
- Kenichi Ohmae, Japanese management expert (pictured
The world is borderless because competition between companies is global. Internet links also cross borders
turning the world into what the Canadian, Marshall McLuhan,
called a “global village”.
To think internationally it helps to call yourself “a citizen of the world”, as the Greek
philosopher, Diogenes, did.
“Only if we together put some idealism back on the global agenda will
there be a light at the end of the tunnel”,
Roddick, the founder of the Body Shop.(pictured
Global companies have a responsibility to help solve global problems like famine, poverty and climate
They mustn’t exploit the weak and the poor.
Jimmy Carter, the former American president, said:
“If you’re illiterate and living on one dollar a day, the benefits of globalization will never come to
Bartlett (pictured right) and Sumantra
Ghoshal (pictured right below),
Managing Across Borders (1989)
A “transnational” company is best that:
- satisfies local customer needs.
- continually learns from knowledge sharing
- fully benefits from the cost advantages (economies of scale like low cost production
and global marketing) of selling a product worldwide.
Its structure (called an “integrated network”) is a mixture of functions for the whole
organization (e.g. research and strategy) and activities (like production) in different countries.
Trompenaars (pictured right),
Riding the Waves of Culture (1993)
Anglo-American culture and values shouldn’t be rigidly applied everywhere in the world.
Much can be learned from other cultures: preference for working in groups, showing emotions, honouring the past
and greater humanity at work.
Porter (pictured right), The
Competitive Advantage of Nations (1990)
Four factors lead to international business success (called his “diamond model”):
(or factors of production) - particularly:
- the availability of skilled labour.
- infrastructure (roads, transport, education, etc.)
b) support from related industries
(particularly the sharing of innovative ideas and knowledge).
(leading to the need for continuous innovation and quality improvement).
- a big domestic market (e.g. America)
- demand from customers for product improvement.
Naomi Klein (pictured right), No Logo (2000)
Global companies are social disasters because they:
- exploit employees (with low paid and boring jobs).
- manipulate customers (via advertising and branding).
- destroy small local businesses.
Prahalad (pictured right), The
Fortune at the Bottom of the Pyramid (2005)
Globalization helps the world’s poor (the “bottom of the pyramid”) and the rich by making poor
countries wealthier and so creating markets for companies in rich countries.
(pictured right), Culture’s Consequences
Employees worldwide differ in four ways. Hofstede’s research showed that they have high/low influence in
(how autocratic and hierarchical management is)
High (France, India, Belgium).
Low (Germany, Denmark, Finland, Netherlands, Norway and Sweden).
(avoidance of uncertainty, innovation and risk taking)
High (France, India, Belgium).
Low (America, Denmark, Hong Kong).
(respect for the individual)
High (America, UK, Australia, Canada, New Zealand, South Africa, Ireland).
Low (India, Pakistan, Taiwan, Thailand, Greece).
(emphasis on performance and results)
High (same countries with high score for individualism).
Low (Germany and countries with low power-distance).
Friedman (pictured right), The
World is Flat (2005)
Global capitalism (following the collapse of communism) and the Internet have minimized (or flattened)
countries’ political, economic and cultural differences.
Thomas Friedman, Lexus
and the Olive Tree (1999)
Global society should balance the:
- Lexus (the wealth creating global economy).
- Olive tree (preserving the identity of individuals, communities and countries).
For more detail see Lexus and the Olive
Tree in the Business Books section