Countless companies from emerging economies hesitate to jump into international markets—especially those in the developed world—because they see themselves as hopelessly flawed. While many are every bit as savvy and profit-oriented as traditional multinationals, they’re painfully aware that they don’t have cutting-edge technologies, dominant brands, or novel products. And the process of building those kinds of advantages looks long and daunting, even for companies that possess the necessary capital. So they remain at home, profitable but unable to live up to their full potential—and vulnerable to foreign competitors.
The Globe: How to Conquer New Markets with Old Skills
Reprint: R1011K
Many firms sit on the sidelines of global competition, believing they need to develop innovative products or leading brands before venturing abroad. The international success of Spanish companies like Telefónica, Freixenet, Banco Santander, and ALSA proves such thinking dead wrong. They all became global players in their industries—by excelling at old-fashioned capabilities.
The Spanish firms skipped the risky, expensive strategy of opening their own facilities overseas. Instead, they extended their reach through acquisitions and alliances, focusing first on Latin America and Europe. Political and networking savvy helped them break into highly regulated or complex markets. Speed has also been a factor in their success: Rapid project execution allowed them to pull ahead of other multinationals, and with their expertise in vertical integration, they’ve been able to get products quickly and cost-effectively to far-flung customers. Though all these skills may be humdrum, Spanish firms have made the most of them and have become industry giants as a result.