Global by Design

An article in The Wall Street Journal talks about the American “two track” economy — in which US companies that sell globally are doing much better than those focused only domestically.

One quote jumped out at me:

But John Farrell, global head of strategic planning, says Coke approaches the world not as an American company that does a lot of business abroad, but as a global company that numbers the U.S. among its hundreds of markets.

I’ve been saying something similar to since for many years. In 2005, I wrote:  Smart and aggressive companies will transform themselves from US companies serving foreign markets to global companies serving local markets.

Every market is now a local market.

The only question is whether (or when) your company will go after it.

The Wall Street Journal article, because it relied on publicly traded corporate data for its analysis, may create the impression that only only large companies can benefit from these global opportunities.

But I find the most exciting global success stories among smaller, privately owned companies. This is a golden moment in history for small businesses to start expanding into new markets. Internet growth in emerging markets is booming. And I’m not even recommending you dive into China, a market that is extremely difficult to succeed in. Take a look at Brazil, Chile, Turkey, Poland, Ukraine, Indonesia. If you’re a smaller company, look at a smaller market that may be overlooked by your larger competitors.

I’ll leave you with this excerpt from the article:

… economists expect economic growth of 9.8% this year in China, 8.3% in India and 7.5% in Brazil.

All that  growth is encouraging more American companies to venture abroad. Pizza-chain operator Papa John’s International Inc. currently gets only about 4% of its revenue from its foreign operations, but in recent years the Louisville, Ky., company has been making infrastructure and supply-chain investments that it says will help it expand in foreign markets.

“We believe international is going to be more of a part of our growth,” says Papa John’s Chief Financial Officer David Flanery, adding that within two or three years he expects the company will be opening more new restaurants outside the U.S. than inside it.

And if you’re curious about what companies have done the best job localizing their web sites for markets around the world, check out the Web Globalization Report Card.

• Going Global Gracefully
• Expand Globally; Hire Locally
• Revenge of the Non-Native English Speakers
• Local Markets Change Channels
• Does Comedy Travel?
• Globalization is Good

Last week I said I’d love to see more profiles of global-minded business execs and, sure enough, the Journal delivers.

Here’s an interview with the Philips Electronics CEO Gerard Kleisterlee.

According to the article, the company’s emerging-market sales increased 29% in the second quarter from a year earlier and now make up 34% of the company’s total sales. And it’s just getting started.

Some choice quotes from the interview:

The rush to emerging markets is there already for the last 10 years. What you have started to see is that, in many of these emerging markets, now you get growing local [Chinese] competitors who become either regional or aspiring global competitors.

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

For the emerging markets we have even more local responsibility. In general we try to push responsibility down in the organization and have everything necessary centralized. But for emerging markets we have done that even more than for the developed markets.

The Philips global web site finished in 4th place overall in the 2010 Web Globalization Report Card. Decentralization of control is a key ingredient of successful local web sites, particularly in emerging markets.

• Going Global Gracefully
• The decline of foreign markets and the rise of local markets
• eBay Tries to Expand Globally Without Offending Locally
• AOL’s.in
• AOL: 14 Countries in 18 Months
• Going Global Gracefully

The latest creation from Byte Level Research, available for purchase at bytelevel.com/eyechart.

This unique take on the Snelling eye chart includes characters from more than 20 languages.

It’s the perfect gift for an eye doctor — as well as the globally myopic.

• Welcome to Global By Design
• Back to Byte Level
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• Web Globalization and the Marketing Executive: A New Report
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• A Whole New Way of Looking at the World (Wide Web)

In the 2008 Web Globalization Report Card, Hotels.com ranked close to last place in the web services category.

In this year’s Report Card, Hotels.com ranked only behind Google and Wikipedia — an impressive turnaround.

In just two years, Hotels.com added 19 languages, improved global consistency, and, most important, improved local relevance.

It’s nice to see the business press taking notice.

This Wall Street Journal profile of Johan Svanstrom, the head of Hotels.com’s Asia group, sheds light on why the company has done so well. The article begins:

Online travel giant Expedia Inc. had fewer than 20 employees in Hong Kong and no Chinese-language website when Johan Svanstrom took on his role as Asia-Pacific vice president of Expedia unit Hotels.com five years ago. Under 38-year-old Mr. Svanstrom, Hotels.com has added 13 new country-specific websites in the region and more than 160 staff.

Hotels.com is clearly betting big on Asia, and with good reason. Says Svanstrom:

According to the [International Air Transport Association], Asia Pacific overtook North America as the world’s largest air-travel market with 647 million passengers in 2009—a true milestone. When these people arrive at their destination, very many of them need a hotel to stay in. Add to that the fact that travel is one of the top three verticals of e-commerce and a natural pair with the Internet? All the stars are aligned.

I love to see profiles such as this; I hope to see more in the months ahead. Despite all the doom and gloom in the news these days, a lot of companies are booming abroad — and, in large part, thanks to smart bets on web globalization.

• Starwood Hotels broadens Chinese Web support
• Expedia in China
• What if your company didn’t make the top 25 list?
• Web Globalization Paying Off for Expedia
• The best global hotel web site: InterContinental Hotels
• Web globalization and the small business

It’s been awhile since I’ve posted findings from the 2010 Web Globalization Report Card, but I did want to include a brief note on the retail sector.

We define this industry segment to include those retailers (and a few food/beverage chains) that have a physical presence in the countries in which they do business. This excludes a company such as Amazon, and it greatly narrows the selection of global web sites, as most “bricks and mortar” retailers have been slow to expand into new markets. For bricks and mortar retailers, the world is not quite as flat as it is for their virtual competitors. To illustrate, the average number of languages supported by the retail web sites we studied was 13, well below the overall average of 22.

We included 11 retailers in the 2010 Web Globalization Report Card.

The Web Globalization Report Card is an annual benchmark of how effectively companies internationalize and localize their web sites and applications for the world. It is now in its sixth edition.

Of the 11 retailers studied, IKEA emerged on top.

IKEA is no stranger to the top spot. It was an early leader in this space and has done an amazing job of balancing global consistency with local flexibility in every market it enters. IKEA was also one of the first multinationals to use a splash global gateway — which it still uses today (FYI: if you want to learn more about global gateways, check out the brand new edition of The Art of the Global Gateway).

Starbucks made significant improvements over the past two years, and adding eight new languages. Starbucks has also beenagressive in embracing social media around the world. For example, its German Facebook page — Starbucks Deutschland — has more than 175,000 followers (it gained more than 100,000 followers in the last seven months).

Best Buy has done an excellent job with its US Spanish web site, blogs, and community forums.

It will be an interesting site to watch over the next year as the company expands into Europe.

Here is the full list of retailers included in the 2010 Web Globalization Report Card:

• Best Buy
• Build a Bear
• Godiva
• H&M
• Home Depot
• IKEA
• McDonald’s
• Starbucks
• Subway
• Tiffany
• Wal-Mart

• The best global hotel web site: InterContinental Hotels
• Global Retail Trends: Are Americans Too Slow?
• Google Is Best Global Web Site (Again)
• Successful Ecommerce in Four Seconds (or less)
• The best global Web sites of 2008
• Web Globalization Leaders of Industry