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Jane
Perrin
SVP, Managing Director
ACNielsen Global Services
Globalization has proven historically to be one of the primary
avenues for successfully growing a business. Unfortunately,
the complexities of globalization are challenging even for
some of the largest, most successful multi-national manufacturers
and retailers. Working with the leading CPG manufacturers
and retailers around the world, ACNielsen is in a unique position
to see both the global and local challenges our clients face
as they expand or acquire brands—or in the case of retailers,
new stores—beyond their home borders.
Certainly over the last few years, one of the major approaches
to globalization has been to acquire local brands or infrastructure
in order to gain a presence within new markets. We have seen
this particularly on the retailer side of the equation, as
local chains have been bought in record number. But this is
also true on the manufacturer side, where acquisitions have
played (and will continue to play) a key role in expanding
a manufacturer's product or market portfolio.
A second approach to globalization, however, has been to leverage
existing assets, such as technology, brands and experience,
in new markets. This approach takes the essence of what makes
you successful in one part of the world and extends it into
another, in order to profitably grow your business outside
your home area. We are seeing this to be particularly true
in the developing markets of China, India and Eastern Europe,
as new factories and stores are being built to bring Western
brands to these developing markets. On the surface, it may
seem like a simple recipe for success, but the manufacturers
and retailers who have done it best know that the implementation
is far from easy.
Those that are most successful know that there is no "global"
consumer waiting for a "global" product. The fact
is that what consumers prefer in St. Louis, they may not like
in St. Croix or St. Petersburg. The world is comprised of
local markets with different cultures, languages and tastes.
What consumers eat or drink—or clean with, or put on
their face at night—differs from market to market. And
when, where and how they shop differs as well. Successful
globalization begins with the recognition that a global strategy
is really only a collection of local strategies built around
a common core. It is a strategy based on managing local diversity,
while leveraging global strengths.
Ready, Set, Go...Global
So you are going "global." You are entering a number
of new markets. You have done your research and talked to
your local consumers. You think you understand their lifestyles
and tastes and know how to tailor your brands to meet their
needs. You have assessed the competition and have local teams
on the ground. The hard work is done...or is it? This is really
just the beginning. When the implementation begins, it is
truly time to think global.
Begin your implementation plan by leveraging your global assets.
Take the best, which in some cases may be the simplest or
most adaptable, of your technology. Extend your successful
brand franchises where possible, share your other local experiences
with the implementation team, and learn from your past mistakes.
And since you manage what you can measure, set global standards
for measurement. Create global quality standards around producing
your products. Share best-demonstrated practices from other
parts of the world and train local production and sales people
on implementing them. Develop global performance indicators
to track local performance, and global finance tools to track
your business in each country.
This all may seem obvious, but the reality is that many of
today's leading manufacturers and retailers are struggling
with implementing these common-sense global guidelines across
their organizations. And for those manufacturers or retailers
where acquisitions have been the primary driving force behind
their globalization strategy, the challenge becomes even greater
as they try to blend multiple organizations with unique cultures
into one.
Creating a Global Catalog
One area specifically in which ACNielsen's Global Services
division spends a great deal of time working with clients
is in helping them create their own internal global product
catalog...catalogs that are coded country by country, with
a core set of common attributes, while still recognizing local
differences in such things as formulations/form (e.g., tablet
versus powder) or different packaging configurations. By creating
such a catalog, manufacturers, for example, can view their
portfolio around the world and link them to other internal
databases, aggregating products with common components at
the regional or global level. For retailers, the challenge
is similar: create item master files across countries and
create fascias that are coded with a common approach and can
be aggregated to provide supplier information across countries
and categories for global sourcing.
This too all sounds
simple but actually it is surprising to find out how many
companies do not have some type of global internal product
database, much less one where the characteristics of their
products from different countries are consistently coded.
Every local country or company usually has its own "list,"
but the similarities between them are few. The depth of information
that is coded, the classification or segmentation of products
and the coding standards or rules that are used all differ.
In some cases, the exact same products are even coded and
classified differently in adjacent countries. Looking at a
higher level, category definitions are even inconsistently
defined country by country.
Creating harmonization across countries requires setting global
standards, focusing on coding core attributes that are the
same across all markets while allowing for the coding of local
variations to meet market need. Whether for a manufacturer
or a retailer, the task is not an easy one, because it requires
local cooperation and global coordination with the parent
organization. Local and global departments need to agree.
It is a daunting challenge at best.
Creating global standards also requires an investment in both
time and money. Many think the focus begins with buying the
application. But the focus really needs to begin with content.
Content is critical. If there is not a focus on the content,
the global solution will ultimately fail.
Structured for Success
An organization's structure is often one of the key determining
factors in whether an organization is successful at being
global. Many of our clients today consider themselves to be
"global" and are certainly coordinating their businesses
globally; but only a select few actually manage their business
on a global basis. The differences are often subtle, but they
are very real [See chart 1].
Industry
Demand Is Growing
Is all of this investment in global standards, measurements
and databases worth it? Today's reality is that with the globalization
of manufacturers and their retailer trading partners, the
demand for consistency and harmonization of information globally
has never been greater. Putting standards in place whether
you are in five countries or 50 is necessary.
And if you put the
global standards in place when you enter a market, it becomes
significantly more efficient then going back and redoing what
has already been created locally. Even if you are farther
along the globalization curve and are already in 50 markets,
it is still not too late. Begin with a proof of concept in
a few markets. Share the working model with your local organizations,
get their input, and then develop a roadmap for going forward
country by country. At the heart of all your efforts should
be a global core surrounded by the necessary local adaptations.
Globalization is
a journey. It begins with a strategy based on managing local
diversity while leveraging global strengths. Although many
find it insurmountable, when global standards are part of
the plan, it is less difficult. And the end result is a stronger,
more cohesive organization that is better able to continue
to expand and grow... market by market.
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