Tag Archive for 'Globalisation'

Globalisation meets Web 2.0

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ron
on June 26, 2007
in Emerging Markets, Global Strategy and Social Media
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Globalisation meets Web 2.0

We’re now at the busy crossroads where globalisation meets Web 2.0.

This presents both a challenge to the old ways of doing business and an opportunity to gain tremendous leverage via the right goods and services.

To thrive in this era, companies will have to figure out how to engage young people from all over the world when they conceive of products and services. Businesses need their help in turning concepts into finished products and, especially, in marketing them.

Another angle: Companies can follow the trail of blogs and social networking sites to find and recruit young employees all over the world. (Source: BusinessWeek cover story “Children of the web”)

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The new radar screen of VCs

Published
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ron
on June 17, 2007
in Emerging Markets and International Finance
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What’s currently on the radar screen of Venture Capitalists (VCs)? In short, finally, they are starting to look beyond China and India respectively: Central and Eastern Europe.

At the very moment, first, there is Central and Eastern Europe. At least $500 million is sitting in fund targeting the Central and Eastern European region and much more is foreseen. This growth is enabled by a few success stories such as Skype and Last.fm, and in turn, this has triggered a new wave of fresh and new European entrepreneurial spirit. Furthermore, the accession of ten new European Union members from Central and Easter European countries has spurred investments across the region. The previous locked up energetic talent in this region has now gained equal access - as their Western European counterparts - to European capital markets and legislative protection.

In addition, as BusinessWeek pointed out earlier VCs are even having their eyesight beyond the traditional BRIC and Next Eleven (N-11) countries for example out of all places, Colombia, Latin-America. A multitude of young, bright and entrepreneurial minded people is ready to take the country up on the economic ladder. BusinessWeek typified Colombia as an extreme emerging market. It take guts and political sensitivity to start investing there but it can reap endless possibilities.

Here you can find a list of the top 500 European hot growth companies. Another listing can be found here. The latest and greatest news on European Private Equity & venture capital can be found here.

Some more great webpages to keep you updated on any activity at the European VC front can be found here. European Venture Capital & Private Equity Journal; FT European Venture Capital Report; Venture Capital in Europe (Book); and Profitability of venture capital investment in Europe and the US (Research Paper).

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Drinking Beauty?

Published
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ron
on April 8, 2007
in International Business
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CocaCola Loreal
What do you get if the American giant Coca-Cola and the French beauty brand L’Oreal team-up? Uuhh…Think think hard… a health-and-beauty beverage called Lumae…?

L’Oreal and Coca Cola are working on developing a nutraceutical drink that will hit the market in 2008. Lumae is a tea-based drink and is “expected to contain ingredients that will help women care for their skin’ and targets ‘active, influential, image-conscious women over the age of 25 who embrace health and wellness”.

This move is quite comprehensible for Coke I think; diversify its product range with healthier products but for L’Oreal, what’s in it for them? When I think of L’Oreal I think of moisturisers, face creams, anti-aging, skin creams, etc. Will the woman who like to drink L’Oreal stand-up? I’ve strong doubts by this drink. Source: Bevnet’s report.

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The Globally Integrated Enterprise

Published
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ron
on April 7, 2007
in Emerging Markets, Global Strategy and International Business
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Samuel IBM
At the end of last year, Samuel J. Palmisano, IBM’s Chairman and Chief Executive Officer gave a speech at INSEAD, France. He elaborated on the evolution of the enterprise through three distinct models.

1] In the 19th century the “International model” emerged. Most operations where centred in the home country complemented with overseas sales and distribution subsidiaries.

2] The 20th century was characterised by the “Multinational model“. In order to gain access to local markets the Multinational created smaller versions of the parent company in multiple countries around the world.

3] What once looked like efficiency is now coming to look like redundancy. Therefore all businesses that operate globally around the world are moving to the next model the “globally integrated enterprise“. This enterprise shapes its strategy, management, and operations in a truly global way. It locates operations and functions anywhere in the world based on the right cost, right skills, and the right business environment. And it integrates those operations horizontally and globally.

The idea of this third 21st century model “the globally integrated enterprise” is similar to the transnational model defined by Barlett & Ghosal (2003).

According to Palmisano, in this sphere, the dynamic flow of work across the global platform is driven by three forces: Economics, Expertise, and Openness. This sphere requires two main challenges stated Palmisano, a new model of leadership and the vital issue of trust. The global integrated company will have to be led by a new generation of leaders, with different skills, experiences, and acumen.

The issue of the new skill set required is widely discussed by academics and industry leaders. Up till now there isn’t made any consensus but being cross-cultural minded in all your actions seems like a requisite.

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The new World?

Published
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ron
on March 16, 2007
in Emerging Markets
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New World

Asian cities are in the race to build the boldest and biggest skyscrapers in the world. The region’s economic dynamism ensures the resources needed to make their mark in the 21st century architecture.

Case in point, Asia is already accommodating eleven out of the fifteen largest skyscrapers in the world. European and American architects have targeted Asia as their new playing field for architectural innovation and “wonders”. This movement is not likely to stop and will continue into the next decade since technological advances in construction materials, glass, and building bracings.

The build-up of various monster towers also highlights the rise of Asia’s new economic powerhouses at the capitalistic forefront. China is already putting up five skyscrapers in the current top ten largest buildings in the world.

So the question remains! Is there a casual relationship between the number and height of skyscrapers in a country and its stage of economic development? Are emerging economies using skyscrapers to put themselves on the map of capitalistic countries or as promotion tool in order to gain recognition from the West? All-in-all, I think, at least skyscrapers are providing a country and city more esteem and standing. Conventional wisdom regards stunning skylines as an impression of capitalism and a whirlpool of excitement.

What I know for sure! I love skyscrapers, fabulous skylines, architectural wonders, and Asian cities!

New World 2

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India’s Flagships & BRICs

Published
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ron
on February 13, 2007
in Emerging Markets
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Tata Motor, Mahindra & Mahindra, Bharat Forge, Reliance Industries, ICICI Bank, Rediff, Dr. Reddy’s Laboratories, Infosys Technologies, Wipro, Bharti Airtel.

What have all these names in common? They are all multinationals from India and ready to shakeup the global business dominance of the West and Japan in order to become the next global brand. Most of them have a stock listing in both India and the US and starting to compete head on with the established players in the global marketplace. Here is a list of the ten most dynamic companies India has to offer.

My favourite Podcast on Emerging Giants from all BRIC countries (Brazil, Russia, India, and China) can be found here.

The term BRIC was first prominently used in the research paper “Dreaming With BRICs: The Path to 2050″ (2001)(PDF file) published by the world’s largest investment bank, Goldman Sachs. GS has also published a web presentation on BRICs, it higlights GDP growth, income per capita and currency movements in the BRICs economies until 2050.

In 2005 after publishing the paper on the emerging BRIC economies, Goldman Sachs published another report “How Solid are the BRICs?” (PDF file). Herein Goldman Sachs names another eleven economies that may emerge as important players by 2050. They are (in alphabetic order): Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey, Vietnam. Goldman Sachs names them N11 (i.e., the Next Eleven).

Amongst them, Korea and Mexico are particularly important. According to their prognosis, by 2050 Mexico will become the sixth-largest economy and Korea will become richer (in income per capita) than any of the current G7s (Canada, France, Germany, Italy, Japan, UK, USA) except the USA.

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BusinessWeek’s Podcasts

Published
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ron
on July 25, 2006
in Emerging Markets and International Business
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Innovation Champions and Emerging Markets


Multinationals from China, India, Brazil, Mexico, Russia, and even Egypt are coming on strong. They’re hungry — and want your customers. They’re changing the global game.

Today I listened to the podcast of this week’s BusinessWeek cover story on emerging giants, the future multinationals not coming from the Western world but from emerging markets. Each with their own suprising business model. When emerging markets are in your field of interest, I highly recommend listening to this podcast and read up on the article. By clicking on this link you can download the audio file of this particular article.

 

Another very interesting podcast that I recommend is on Innovation Champions.

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Three Challenges for Intel’s New Boss

Published
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ron
on May 13, 2005
in Global Strategy and International Business
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Intel Logo

As Paul Otellini prepares to take charge at Intel next week, is the giant chipmaker heading in the right direction?

Many conglomerates like IBM, Cisco, Dell, P&G, GM, etc. are having all something in common. They all face new challenges due changing market conditions (in microeconomic terms, the aggregation of formerly distinct markets, enhanced market clearing and efficiency), changing world economy, competition from emerging markets, changing technology landscape.

Furthermore, the forces of globalisation, technology, and economic liberalisation are combining to make life harder than ever for established companies. Incumbents must understand how powerful forces are aggregating once-distinct product and geographic markets, enhancing market-clearing efficiency, and increasing specialisation in the supply chain. They should respond by adopting a new approach to strategy– one that combines speed, openness, flexibility, and forward-focused thinking. Mature companies must learn to be young at heart. Boundless new opportunities await executives who recognise that the days of slow change are over.

Next week at May 18th, Paul Otellini will take over the wheel from retiring chief executive, Craig Barrett. For several years Otellini was the right-hand man of Barrett. But Otellini is Intel’s right-hand man in another sense, too. For he is the architect of the firm’s new strategy — change of direction that Otellini calls a “right-hand turn”. The world’s largest chipmaker now faces three big challenges — but Otellini believes his plan can address all of them at once. Is he right?

The Economist has summed up the three challenges which are facing for Intel’s new boss, Paul Otellini.

  • Intel, along with its rivals, is embracing a new approach to chip design, in which performance is improved not through higher clock speeds, but by adding further processing “cores” to its existing chips.
  • The second challenge is that the personal computer (PC) market has matured. Intel still makes most of its money selling the processor chips at the heart of PCs. Mr Otellini cannot, and must find new sources of growth, in the PC market and beyond it.
  • The third challenge is the growing competitiveness of Intel’s main rival, Advanced Micro Devices (AMD). In recent months Intel has suffered a string of embarrassments, some self-inflicted (such as the cancellation or delay of several new products), but others at the hands of AMD.

Will Intel keep its dominant position in the chip market? Take position in from them unfamiliar markets? Or markets which aren’t explored yet. As most of you are familiar with technology convergence it seems like that business model convergence is the new thing out there in the business world. What do you get when combining Intel’s and Dell’s product range? When taking a look in the long-term future, it seems like that many conglomerates as we know today have to team-up to adapt with foreseeing new market circumstances.

When writing about consumer power lately is it not that we, consumers, demand a “swiss pocketknife” rather than a range of scattered products isolated from each other?

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The Bangalore Paradox

Published
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ron
on May 4, 2005
in Emerging Markets and Global Strategy
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The city at the heart of India’s booming information-technology industry is already choking on its own success; but the boom has barely begun. Moreover, Bangalore may be on the verge of overtaking Silicon Valley as the biggest IT employment region in the world on the back of the rise in offshore outsourcing, according to some estimates.

The high-tech Indian city, which is home to major Indian IT outsourcers, including Infosys, Tata Consultancy Services and Wipro Technologies, as well as many Western IT companies, now employs 160,000 people in the technology sector. IT accounts for 100,000 of these jobs, with the rest in business process outsourcing and call centers.

MK Shankaralinge Gowda, secretary of IT and biotechnology for the state government of Karnataka, said that the number of tech workers in the region will exceed 200,000 between 2004 and 2005, as IT and business process outsourcing companies continue to rapidly hire workers.

Gowda claims that Bangalore has already overtaken Silicon Valley, but the latest figures from California’s state government Employment Development Department (EDD) estimate the number of technology workers in Santa Clara County, which is the heart of Silicon Valley, at 175,100 as of June.

However, Silicon Valley is not in danger of losing its stature as a tech leader, and it can benefit from competition overseas, said Sam Haddad, chairman of the Silicon Valley Engineering Hall of Fame and a consulting professor at Stanford University. Haddad said the region is seeing new growth in areas such as nanotechnology. “Silicon Valley is already beginning to reinvent itself,” Haddad said. “I am very optimistic.”

More insight can be found on this webpage.

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IBM’s Transition Goes Beyond Blue

Published
by
ron
on April 14, 2005
in Global Strategy
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IBM Logo

“In the past, IBM defended the mainframe against client-server computing and PCs,” Palmisano says (Chief Executive Samuel J. Palmisano). “We’re not defending the past anymore.” No, IBM is off and running into a new world of business, beyond computers.

This sounds like IBM is changing its definition from international business machines to international business models.

The world of computing that IBM long ruled is increasingly becoming a commodity business. Ruthlessly efficient Dell Inc. fresh from its conquest of the PC market is climbing up in servers and even tech services. “The big question is: Will services go the same way hardware has? We think it will,” says Steve Meyer, a vice-president in Dell’s services unit.

IBM, with its legions of PhDs and closets full of patents, is not built to duke it out with the likes of Dell. Palmisano’s strategy promises a neat escape. Instead of battling in cutthroat markets, he takes advantage of all the low-cost technology by packaging it, augmenting it with sophisticated hardware and software, and selling it to customers in a slew of what he calls business transformation services. That way IBM rides atop the commodity wave - and avoids drowning in it.

Therefore, IBM is putting to use the immense resources it has in-house, from its software programmers to its 3,300 research scientists, to help companies like P&G rethink, remake, and even run their businesses - everything from accounting and customer service to human resources and procurement. “We’re giving our clients a transformational lift,” says Palmisano. He expects that within 10 years IBM could build an annual revenue stream of as much as $50 billion in business consulting and outsourcing services. If so, Palmisano will have created a second services miracle and hitched IBM to a crucial growth market. And in the process, his company will be fixing - or running - big chunks of the world’s business.

In its pursuit of vital industry experience, IBM - much like an eager college intern - is sometimes willing to work for free. IBM’s unpaid partnership with the Mayo Clinic dates back to a cocktail party in 2000 in Mayo’s hometown of Rochester, Minn., where IBM has a computer factory. A Mayo employee and an IBMer realised that scientists at both companies were working on genomics research. This soon led to joint projects on gene profiling of leukaemia cells, and a published paper in a scientific journal in 2003. This is not the kind of connection that Dell, Accenture, or Wipro is likely to make. “This is the way to transform the way we practice medicine,” says Dr. Nina M. Schwenk, chairperson of Mayo’s Information Technology Committee. And for IBM, it’s a foot in the door of the $1.4 trillion health-care business.

In addition to its four original businesses — accounting, HR, customer service, and procurement - it is now ploughing into six others. They include after-sales service for consumer electronics, insurance-claims processing, and supply-chain optimisation. The old IBM would have studied for many months before deciding whether to enter these new businesses. This time, it has set up small SWAT teams to work with a handful of initial clients and launch businesses.

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