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Download PDF (101KB) Editorial: The local, national and global communities: Identifying with one or all Consider the following list: Bhutan, own politicians seem to want to take us Brunei Darussalam, Burkina Faso, in the opposite direction. They are Cape Verde, Comoros, Guinea-Bissau, working to draw the member nations Kiribati, Kyrgyzstan, Marshall Islands, of the European union into an ever Nauru, Palau, Sa˜o Tomé, Tajikis- closer, ever more integrated body. At tan, Turkmenistan, Uzbekistan and thesametimetheyresistthepressures Vanuatu. What do they all have in of Globalisation as far as they are able. common? I think even the most This of course means that there are sophisticated readers could be forgiven very few European companies that can if they did not immediately come up describe themselves as global in the with the answer. The fact is that each way that the giant American and Asian of these sovereign states is a fully corporations can. fledged member of the United In Europe there are 15 member Nations.1 nations of the European Union but Since the end of the Cold War and there are 45 official languages spoken the fall of the Berlin Wall, the main by their peoples, and that is not geopolitical trend on the planet has including the dialects of their in- been for the acceleration of one of the digenous populations such as Geordie principal purposes of the United Na- nor the tongues of their more recent tions; that is self-determination. There immigrants such as Gujerati. In the UK are now 188 full-member states in the this dichotomy has led to the process United Nations, and that still excludes of devolution, ostensibly a return Switzerland, which remains an ob- of power to local and regional as- server. semblies. Atthesametime,theprincipal Remember the extraordinary scenes economic trend on the planet has been at the WTO round in Seattle?2 On the Globalisation and largely for the same 30th November, 1999 the mayor of reason. As the market system has Seattle was forced to declare a state of largely won there are new markets for emergency as a result of violent the world’s multi-national corporations Anti-WTO street protests. The mission to conquer and new media, which pay of the WTO is to create a prospering scant attention to the political bound- global economy, increasing the flow of aries, to help them in the process. Fifty goods and services around the world. of the world’s largest economies are, in Butcriticsarguethatmostofthe fact, corporations. planet’s population will not benefit Here in Europe it is sometimes dif- from WTO actions and may, in fact, be ficult to recognise these trends, as our harmed by them. This is a subject of ᭧ HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 1, 5–10 SEPTEMBER 2000 5 EDITORIAL huge importance but, whatever the restaurant chains, McDonalds and Pizza merits of either argument, this is the Hut and a few clothing retailers — political and economic background Marks & Spencer and The Gap. They against which brand owners have to were not selling other brands except as manage their assets. accessories to the central purchase. But now the giants who have to expand beyond their home markets are flexing THE NEW AND EVOLVING CHALLENGES their muscles. Is this just a continuation TO THE WORLD’S GREAT BRAND of the same inevitable consolidation OWNERS that started when an owner manager There is a new factor at play, and that opened his second store? Or are their is the Internet. While much of the fundamental barriers that frustrate this impact of the Internet has been exag- process at the local, regional, national gerated, it is certainly going to change or international level? the way we work in a fundamental One important barrier is people. way. It is possible that the role of the When an owner-manager opens his middleman will change forever or even second store he needs to trust the disappear. The supply chain will be person who looks after it. That is why streamlined; inventory collapsed and this is so often a family member. But much quicker response to real market the size of the family will be a con- demand will be possible. These are straint to growth. If he solves this his factors that encourage Globalisation. next barrier will be geography. He will We are told that it will be possible want to visit each of his stores every to hold one-to-one relations with the day, checking on his staff, motivating consumer.3 Here I am more sceptical. them and transferring success around While I acknowledge that interactive his stores. When this is physically im- communication between a manufac- possible he will need a second tier of turer and his consumer is theoretically management. If he solves that he can possible, the reason why these big grow quickly if his finances permit. In companies developed in the first place the UK and the USA public funding was that they could achieve economies or equity has usually assisted progress of scale that the local producer could through this barrier. In Germany it has not match. Once these are sacrificed been more normally by bank finance the advantage of the large producer is or debt. The German system of bank- lost. This tension is particularly inter- ing has also provided a degree of esting in the retail arena. I used to protection to the local operator. believe that there were no global If we contrast the models of a retailers. Often national champions retailer developing his organisation from the USA would come over to through the barriers of management, Europe and fall flat on their fascia. geography and finance with a manufac- Some brave Brits tried the reverse but turer it is clear that the manufac- with the same result. Then those turer has an advantage. First, the retailers who controlled most of their manufacturer can access the benefits of product supply chain in a vertical economy of scale without complexity model had some success. These in- in his organisation. Second, he can cluded petrol retailers, Esso and Shell, distribute through available channels 6 ᭧ HENRY STEWART PUBLICATIONS 1350-231X (2000) BRAND MANAGEMENT VOL.8,NO.1,5–10 SEPTEMBER 2000 EDITORIAL wherever they may be without equiv- million people. Most of the brands that alent investment. Thus he can invest figure in any list of global brands are the proceeds of economy of scale in American. This is the result of their widening the brand franchise. When in inventiveness; the strength of their his history he chooses to take his brand home market; their success in brand overseas, he can do this initially in a development. It may also be the result low risk way by export and then, when of the pervasiveness of their culture and he has built up economy of scale in the the fact that a business career is seen as new market, he can begin to invest in attractive and therefore attracts the best local production either by acquisition graduates from their schools. or by start-up. He will certainly have a Any non-US-based corporation brush with local politicians at this stage. must succeed in the USA if its His locally based competitors will ambition is global. The extraordinary accuse him of dumping and eventually success of Sony as a truly global brand he will choose to invest in local is probably based on the fact that Akio production, partly to avoid these Morita recognised this truth early in tedious accusations and partly to be the company’s history. He established seen as a good corporate citizen. Of his family home in New York and course personally supervised the business. The he will exact a price for his beneficence products were exported from Japan to in terms of tax holidays or grants. America but the reputation of the company was exported from America to the rest of the world. CHARACTERISING THE WORLD A distinguished professor from Har- MARKETS: UK, USA, EUROPE AND vard told me recently that there is JAPAN nothing happening in Europe. Per- haps this is harsh and not true in Lessons to be learned some specific industries, such as motor To what extent does this vary by the cars and fashion, where the European major regions of the world? I have gift for design stimulates innovation. worked for American, Japanese and But certainly the USA and Japan lead British brand owners and I can as- the new industries of information and suredly say that there are marked varia- technology. An exception has been tions between them. But there are cellular telephones where an unusual variations among different companies combination of deregulation, led by from the same region. I can tell you the UK, and agreement on a stan- what it is like to work for Sony but I dard has created a vibrant market led am not sure that I can tell you what it by worldclass producers, Nokia and is like to work for the Japanese. Ericsson, and service providers such as The regional variations are certainly Vodafone and Orange. as marked. The USA is pivotal to many But the reality is that there are few markets. It is a vast market though global brands and practically no global within it there are massive variations. corporations. To examine the truth of There are no truly national newspapers this let us consider some of the leaders but a single spot on the Superbowl can whenever there is any consideration of announce a new product to over 100 this question. ᭧ HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL.8,NO.1,5–10 SEPTEMBER 2000 7 EDITORIAL SUCCESS CRITERIA FOR MANAGING Or consider another European food GLOBAL BRANDS giant, Danone.5 Again, a visit to their ‘Unilever is dedicated to meeting the web-site reveals that they regard them- everyday needs of people everywhere’, selves ‘as a global corporation’,but according to their website.4 ‘Around ‘DANONE approaches the world with the world people use its products respect for diversity of cultures deeply 150 million times a day.’ There is rooted in solid, fundamental values.
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