Finding Opportunities in Challenges on a global scale with local perspectives.
Marcos R Leal
Senior Partner at Kompassium | Enterprise Turnaround | Business Growth | New Business Models | Strategic Healthcare & Infrastructure Expert
We have gone back and forth on globalization and refocus, especially in the past few years.
Migrating from country, regional, cross-regional, and global roles brought exciting perspectives about how companies should manage the need to focus on the opportunity to scale their businesses massively.
Side note to trim the edges on recent hype: massive business scaling is not about having an additional digit in sales (from 6 to 7... yeah!); I am talking about going from a few million to billions. That is a global scale ;-)
Going back to the article:
At the university, one of my classmates was the grandson of a famous Brazilian automotive supplies titan. When one of the professors asked him about the reasons for his family company's acquisition, the student answered, "We were not able to reach a global scale."??
Understanding the nuances of different markets is no longer the unique capacity of a few geniuses—it's a necessity. As businesses increasingly look beyond their borders for growth, navigating diverse economic landscapes has become critical. But how do we make sense of each country's myriad challenges and opportunities?
Com'on, I can use DeepL or Google Translator, ChatGPT, and I am good. (Good luck!)
The Power of a Bird's-Eye View
When taking a bird' s-eye view, you may think about EU zone, US, China, Latin America, Middle East-Africa... so homogeneous, right? The bird shall think, "ok, but who is down there in the forest? Prey or predator
When you are aside from the Large MNC segments that can efficiently structure and destructure approaches, the linkages among the global ghettos reveal trends and interconnections that can turn into great opportunities or upcoming threats. Here are some food for thought observed in an analysis of reports about 16 countries across six continents:
Zooming In: The Devil in the Details
While these overarching trends provide valuable context, true insight comes from understanding the specific manifestations of these trends in each market. Let's zoom in on a few examples:
Germany: Industry 4.0 Meets Energiewende and learnings from the pandemic
Germany's twin digitalization and energy transition challenges create a unique innovation landscape. The country's push for Industry 4.0 is alongside its ambitious Energiewende (energy transition) policy. This confluence creates business opportunities that can help traditional manufacturers become more energy-efficient and digitally savvy.
For instance, companies like Siemens and Bosch are leading the way in developing smart factory solutions that not only increase efficiency but also reduce energy consumption. Startups like Ecosia, the search engine that plants trees, are finding innovative ways to combine technology with sustainability.
A long time ago, I watched on TV how fragile the German economy could be, facing Tesla's growth. Not only did Tesla lose the leading position to China's BYD worldwide and is in a defence position in its homeland, but BMW became the leading EV manufacturer in Europe (Reuter's Aug 22, 2024).
Another opportunity that entrepreneurs and companies seeking acceleration could address is Healthcare. The pandemic revealed the issues of lack of digitalization and the gap in continuous staffing, which presents opportunities to build efficiency and scale in the country.?
Not long ago, the German government held a roadshow to attract healthcare professionals from regions like Latin America. I was recently discussing this with a startup from Latin America willing to enter the German market to increase the efficiency of nurses' activities.
India: The Mobile Internet Revolution
India's technological leapfrogging, particularly in mobile internet adoption, opens new markets and changes consumer behaviour. With a large, young population increasingly coming online, businesses that can offer mobile-first solutions in finance, education, and Healthcare benefit enormously.
Companies like Jio have revolutionized mobile internet access, while apps like BYJU's have transformed the education landscape. In Healthcare, startups like Practo are making doctor consultations more accessible through mobile platforms.
Brazil: Agtech in the Face of Climate Change
Brazil's agricultural sector, crucial to its economy, faces challenges from climate change and poor logistics. This has spurred growth in agtech—technological solutions for agriculture. Companies that can offer innovative solutions to improve crop yields, reduce water usage, or enhance supply chain efficiency are finding fertile ground in Brazil.
Embrapa, a long-lasting bio and process technology developer in the country for decades, can be an essential and potential partner. However, in the private sector, startups like Solinftec use AI and IoT to help farmers optimize their operations, while companies like JBS invest in blockchain technology to improve traceability in the meat supply chain.
Japan: Robotics and AI Addressing an Aging Workforce
Japan's demographic challenge of an ageing population is driving innovation in robotics and AI. With a shrinking workforce, companies are developing solutions to automate tasks and increase productivity.
That is excellent learning for other countries, as ageing is a global phenomenon. What lessons can Brazil, Mexico, Canada or Italy learn from Japan?
Toyota, for instance, is not just a car manufacturer but a leader in developing robotic assistants for older adults. Cyberdyne is another example of creating exoskeletons to help people with mobility issues.
United Kingdom: Fintech Innovation in a Post-Brexit Landscape
Despite Brexit uncertainties, the UK, particularly London, remains a global fintech hub. The challenge of adapting to post-EU trade has spurred innovation in financial services. The UK is also well positioned with incentives and ease of doing business that can strengthen its reputation as a global consulting hub.?
Companies like Revolut and TransferWise (now Wise) have revolutionized international money transfers, while Monzo and Starling Bank are redefining retail banking for the digital age. However, Fintech unicorns were also born in Brazil, like Nubank more than a decade ago, or India's venture-funded players, like?PhonePe, Razorpay, Cred, Slice, Acko, and privately held Zerodha.
Finding Opportunities in Challenges
The key to success in this complex global landscape is seeing challenges as opportunities by taking a too-narrowed view of your backyards. Go there and see what is happening! Partner with someone who can bring the global view with a local nuanced experience!
Here are a few more strategies:
领英推荐
Strategies and Trends Shaping the Global Business Landscape
As we navigate the political and economic complexities of global markets, certain strategies and trends are emerging:
1. Sustainability as a Core Business Strategy
Sustainability is no longer just about writing a corporate social responsibility report —it's becoming a core business strategy, meaning: your business, commercial or product development teams need to have it in their goals! (yep, that should not be too different for other areas of your enterprise, or you won't make the required cultural and business change).
Companies that integrate sustainability into their operations are finding new revenue streams, reducing costs, and building stronger brand loyalty.
For example, Unilever's Sustainable Living brands are growing 69% faster than the rest of its business. Patagonia has built a strong brand and loyal customer base through its commitment to environmental sustainability.
2. Leveraging Data Analytics for Localization
Data... data... data
Quality data, data lakes and robust analytics enable companies to understand local markets with unprecedented depth. This allows for hyper-localization of products and marketing strategies.
Netflix, for instance, uses data analytics to produce and recommend content tailored to local preferences in different countries. Similarly, Coca-Cola uses data to adapt its offerings to local tastes.
3. Building Resilient Supply Chains
The COVID-19 pandemic and geopolitical tensions have highlighted the importance of resilient supply chains. Companies now focus on diversifying their suppliers and bringing production closer to end markets.
Apple, for example, is gradually shifting some of its production from China to countries like India and Vietnam. Many automotive companies are exploring nearshoring options to reduce dependency on distant suppliers. And, not to be forgotten, the chip production nightmare is causing governments to consider this a question of national security.
4. Embracing the Circular Economy
The concept of a circular economy is gaining traction globally. Companies that can redesign their products and processes to fit this model are finding new opportunities.
For example, IKEA has committed to becoming a fully circular business by 2030, offering furniture leasing and buy-back programs. Companies like TerraCycle are building entire business models around recycling traditionally non-recyclable waste.
5. Leveraging Artificial Intelligence and Machine Learning
AI and ML are not just buzzwords. Many of us are tired of hearing about them (and trying to catch up on the latest cool tool). However, we must admit that while you may not need to be a super developer or teach code to your 2-year-old daughter, AI and ML are transforming how businesses operate across sectors - you must develop a basic understanding and point of view of how they can change your sector. From predictive maintenance in manufacturing to personalized recommendations in retail, AI is creating new efficiencies and revenue streams.
In Healthcare, companies like DeepMind (a subsidiary of Alphabet) are using AI to predict serious kidney injuries 48 hours before they occur. In finance, JPMorgan Chase has implemented a machine learning system that can review commercial loan agreements in seconds, a task that previously took 360,000 hours of work by lawyers and loan officers annually.
6. Tapping into the Gig and Remote Work Economy
The rise of the gig economy and remote work is changing labour markets globally. (I do believe in the value of face-to-face interaction, but there are benefits of working remotely as well—and I am not talking about attending conference calls while walking with the dog in pyjamas.) Companies that can effectively leverage this trend are accessing global talent pools and increasing flexibility.
However, if the culture is not for that, it is hard! I had a chance to be the only one over the phone when people were chatting and eating on mics in large conference calls. In those many situations, I would rather be there in person. I also had a chance to visit offices where most team members were locked in their own offices instead of talking and meeting in person.
Fiverr and Upwork have built successful businesses by connecting freelancers with clients worldwide. Companies like GitLab have demonstrated that running a successful tech company with an entirely remote workforce is possible. I would rather have my teams in front of the customers than spend three hours in traffic to make conference calls throughout the day.
Be wise, and you will find a way to benefit from both cases. As you navigate the global business landscape, consider how these strategies and trends might apply to your business. Could embracing sustainability open new markets for you? Could AI help you better understand and serve your customers, or are you in a segment where the human touch matters and can become a competitive advantage? The companies that will thrive in the coming years will be those that can adapt to these trends while maintaining a keen understanding of local market nuances.
Conclusion: Global View, Local Relevance - The Key to Winning the Global Chess Game
It's time to shift our perspective. Forget about nebulous ideas of 'globalization' - the real key to success is cultivating a global view with local relevance. This approach is crucial when playing the intricate chess game of international business.
Navigating the global business landscape is akin to playing a complex game of chess. You need to see the whole board, understand each piece's unique capabilities, and think several moves ahead. But unlike chess, this game is constantly evolving, with new pieces being added and the rules changing in each local market.
The businesses that will thrive in this environment can maintain a dual focus—keeping an eye on the big picture while diving deep into the specifics of each market. Many years ago, at Harvard Business School in Massachusetts, I heard for the first time the idea of business ambidexterity as the way to cultivate the short and long-term view. We need to be multidimensional nowadays and see the challenges and opportunities hidden within global and local perspectives for the next quarter or the next 3-5 years. How can we build a solid strategy to scale up that can be quickly adapted?
As you look at your business and the markets you operate in or aspire to enter, ask yourself: What challenges can you turn into opportunities? Who can I partner with to learn more? What are the networks I should know and be known? What global trends can you leverage? How can you adapt your offerings to meet the unique needs of each market while maintaining a coherent international strategy?
Remember what Biology can teach business! As Darwin said,
"It is not the strongest of the species that survives, nor the most intelligent that survives.?It is the one that is the most adaptable to change."
References and Further Reading