Web Start-Ups Go Global

According to a recent article in the WSJ, "Web Start-Ups Search History," a newer generation of start-ups such as Yelp Inc. and Groupon Inc. are going global. They are studying their predecessors and adapting successful ideas -- such as using acquisitions or partnerships to enter markets where a strong competitor exists -- with the intent of improving their chance of success in the global marketplace.

Read the entire article here.

World Currency: The U.S. Dollar

David Wessel, economics editor for The Wall Street Journal, writes: "Weaker Dollar Is No Elixir for Economy."

Quick snippet:

The logic, drawn from textbooks, is that a decline in the dollar will make U.S. exports cheaper for foreign customers, so they will buy more, and will make Asian exports more expensive, so the world will buy less. It's no magic elixir.

Illustration credit here.

Can China Move Into the Exclusive Club of High Per Capita Income Countries?

The 1992 Nobel economics laureate Gary Becker -- professor of economics at the University of Chicago and senior fellow at the Hoover Institution -- writes a magnificent opinion piece for The Wall Street Journal, "China's Next Leap Forward."

Quick insightful snippet here:

Global markets allow poor countries to grow rapidly for a while, but it is far more difficult to grow beyond middle-income levels. Much has been made of the fact that a month ago China's aggregate GDP surpassed that of Japan. But all that means is China's per capita income is about 10% of Japan's, since China's population is about 10 times that of Japan. Despite its great economic advances, China still has a long way to go to become a rich country.

Don't overlook it. Blog is equally fascinating.

Cartoon credit here.

Posted by: The Global Small Business Blog

How to Push Your Business to Get Growth From Developing Markets

In a recent Wall Street Journal Article, "Philips's CEO Urges Local Strategies for Emerging Markets," reporter Paul Glader interviews Philips Electronics NV Chief Executive Gerard Kleisteriee.

Kleisteriee shines a magnificent light on his firm's global strategy. The company aims to boost emerging-market sales from 30% to 50% by 2015 by focusing on China.

An interesting snapshot:

WSJ: What do companies have to do differently now in emerging markets?

Mr. Kleisterlee: It does not suffice to serve only the metropolitan areas. In India and in China you need to have good rural distribution.

Increasingly we, and also our competitors, develop products in these emerging markets for the emerging markets. So it is not a European or a U.S. concept that gets sold in China or India but things that we have designed, engineered and manufactured locally for the local market.

Read the entire interview here.

By the way, I did not know Philips has an online store.

If You Were to Bet on Growth, Where Will It Come From?

According to Abbott Laboratories Chief Executive Miles D. White:

... he has assembled a business in fast-growing countries that the company will count on for a big part of its growth.

"Where do you think the growth in the world is going to come from?" Mr. White asked during an interview at his suburban Chicago office, a few miles from Lake Michigan. "Would you bet on the U.S.? Would you bet on Western Europe? It's going to come from emerging markets."

The article goes on further to say:

Now, the fast-growing emerging-market economies are much more attractive. Expanding middle classes in such countries as Brazil, South Korea and Turkey are not only spending more on health care, but their rising affluence has contributed to increasing rates of diabetes, heart disease and other conditions that once had been limited to developed markets. Some governments, notably China's, are beginning to provide insurance to pay for health care.

Read the entire article here.

Graphic illustration source here.

Do Not Fear the Globalization of Higher Education

The new global brain race is intensely competitive.

Read all about it here.

Posted by: The Global Small Business Blog

How To Derive 65% Of Your Revenue Outside Your Home Country

India-based Tata Group chairman, 71-year-old Ratan Tata (pictured), has pushed to expand internationally. In an interview with a WSJ reporter Paul Beckett, he talks about the value of recent acquisitions his firm has made, succession plans for when he retires and how Indian companies can manage their image in the United States.

First, though, a couple of highlights.

When asked about two specific acquisitions:

Tata: If we assume that the global meltdown is a phenomenon that will be over in the near term, I think we will look back and say that these are very strategic and worthwhile acquisitions.

What has he done well?

Tata: One company standout is Tata Motors. It was particularly badly hit with its acquisition of Jaguar Land Rover, which was in trouble because of the collapse of the auto industry abroad. Tata Motors was able to extinguish its borrowing of $3 billion through this difficult period, and most people don't realize the magnitude of that task. This was executed very quietly and very successfully. It was achieved by raising new capital and it was achieved by liquidating some of the assets. And it was done by increasing margins by doing away with some loose practices.

How are you conducting the search for your successor?

Tata: ... I would hope, would have integrity and our value systems in the forefront and hopefully would carry on the path that we have tried to set for the company's growth.

Interrupt: Amazingly, 65 percent of Tata's revenues come from overseas.

How have you seen the relationship between India and the U.S. developing both on a government-to-government and business-to-business level?

Tata: ... We should not be aggressive and alien to the kind of pain that is happening [in the U.S.]. And we should find ways to be complementary to the needs of U.S. companies and not in fact be a pain to them. I believe we still have the cost advantage which we can use to the benefit of U.S. companies without in fact taking jobs away from them. If we can overcome the difficult period that the U.S. is undergoing, I think we can emerge as a very strong business ally of the U.S.

Read the entire interview here.

It Ain't Easy Operating in the Developing World

And the first thing you must remember to do is to throw out your traditional global business strategies because they won't work in the developing world.

Let's take a look at why and capture some answers along the way on how to find success in these important new environments where hundreds of millions of potential customers live.

Lessons From the Developing World

Additional resource:

Can world economy count on developing countries?

Picture file

Exporting Big Box Concepts to India

Is Wal-Mart's deep retail discounting formula doable in India? Only time will tell.

India is part of Wal-Mart's rapid global expansion under Mike Duke, the former head of the company's international division who in February became CEO. In his previous job, he recruited native-born managers in international markets who understood local customs. Mr. Jain, for example, had worked more than 20 years here for Unilever PLC and Whirlpool Corp. Wal-Mart's 3,400 international stores generate close to one quarter of the company's revenue.

The arrival of big-box wholesalers and retailers in India was a major political issue a couple of years ago, with widespread protests from small merchants. But as the Indian economy has slowed, the furor has eased. Shoppers became accustom to larger stores from local retailers such as Pantaloon Retail India Ltd.

Read more here.

Globalization, Not Localization

I argue for globalization, not the simplicity (limitedness) of localization.

What do you think?

Read more here.

How Globalization Will Work in the Future

Here's what Gordon Brown thinks. He writes a crafty commentary, "Don't Go Wobbly On Trade," for The Wall Street Journal.

Here's what else he says:

We also need to reaffirm our commitment to resist protectionism, especially when rising unemployment increases the pressure and temptation to put up trade barriers. Creating more barriers to global trade is a surefire way to prolong the recession.

See what you think. Agree? Disagree? Weigh in to let us know your thoughts!

Thank you.