Sunday, October 9, 2011
They're everywhere
When determining which companies in our industry are the ‘most’ global, there is a large number of statistics on could use to determine the leader. Given this, I will provide a few of these statistics in order to make a more accurate assumption of which company or companies are most global. The first statistic I chose to look at was total revenue of global companies. According to the CNN money annual rankings of the world’s largest corporations, sorted purely by 2010 revenue, the highest ranked corporation in the food, beverage, and tobacco industry is Nestlé at #42 with $105,267 million in revenue, with no other corporation in the industry cracking the top 100. However, sometimes just citing revenue shows purely the amount of money poured into the corporation. If we are looking more for the success of these global companies, a better statistic to look for might be profit. In CNN Money’s annual ranking of the world’s most profitable companies, Nestlé ranks at #1 with a 2010 profit of $32,842 million and a profit increase from 2009 of 246 percent. These last two figures tell us that Nestlé is not on the most successful global corporation in terms of profit, but Nestlé continues to develop strategies that enable them to increase their profits by ridiculous amounts from last year. Coca-Cola also made the list at #31 with 2010 profits of $11,809 million and profit increase from 2009 of 73.1 percent. These figures may not be as delightful as the ones registered by Nestlé but Coca-Cola will certainly be satisfied, especially when rival Pepsi did not crack the top 50. While this may sound like good enough evidence to say that these companies are most global, sometimes pure profit and revenue are not a true indicator of the globalism of these corporations. Surely a corporation cannot operate in one or a few countries and obtain these kinds of figures, but the revenue and profit could have high concentration in just a few countries. To determine this kind of information, what better way than rankings with global criteria? In a Business Week ranking of the world’s most valuable corporations, special criteria was considered, relating to the global business effect. To even qualify for the list, each brand must derive about a third of its earnings outside its home country and be recognizable outside of its base of customers, certainly a sign of a global business. Coca-Cola topped the list while McDonald’s came in at 9 and Marlboro at number 12 and Pepsi at number 22. As you can see, due to the shift in criteria, Coca-Cola now tops the list. In terms of countries found in, both Pepsi and Coca-Cola boast there products are sold in over 200 countries while McDonald’s claims sales in 119 countries. In terms of brand recognition and brand awareness, many sites across the web consistently rank Coca-Cola’s logo as the best and most recognizable in the world. In terms of how these companies are able to achieve their success, there are a few things to notice. First, all of these corporations are relatively old. Becoming a globalized business does not happen overnight. Before a business can even think about expanding overseas, they have to be established in their original location to insure they have the ability to take on such a huge business venture. Second, these corporations have to do lots of marketing around the world to inform the new markets of their product and where it can be purchased. Synonymous with the marketing aspect is the brand name and logo. In order to be a truly successful global corporation, you have to ensure that everyone knows your bran’s name and the logo. Finally, on order to succeed in foreign markets, the corporations have to realize that marketing and pricing strategies are not cookie-cutter and that different regions around the globe respond to different techniques. To be a successful global business, you must treat each region as a separate endeavor with the purpose of not only profit but brand loyalty.
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