FX International Payments
By Megan Doyle
According to the IMD, the potential benefits that directly impact companies engaged in global import-export businesses are expedience and precision in the following areas: recognition of emerging opportunities, balancing tradeoffs, sharing best practices, and rollout and development of new products.3
Cultural awareness helps international businesses become "first movers" in import-export trade, with the advantage of being able to quickly identify and take action on "emerging opportunities in foreign markets."4 According to the IMD's survey of 140 executives, companies that often jump at growing opportunities tend to have "close friends/colleagues in foreign countries" and are "willing to look beyond cultural differences."5
Additionally, if a multinational company has close ties to a cross-border subsidiary, it is far more likely to be able understand the "quirks" of niche, local markets and take on new import-export business opportunities when they arise.6 In 2010, for example, a disconnect between mobile phone product engineers at European headquarters and fast-changing trends in Southeast Asia caused a phone manufacturer to lose significant market share in India. There, buyers began turning to dual-SIM-card devices so that they could easily switch between providers depending on network coverage and cost; local companies rode that wave.7,8
A global mindset can also help import-export businesses develop a more sophisticated and "fine-grained analysis of the trade-offs between local adaptation and global standardization."9 In other words, they are better able to come to solutions that balance global standards with local necessities.
Coca-Cola, for example, has adopted a "think local, act local" marketing strategy, with the intent of selling an "experience" and "happiness" as opposed to a bottled soft-drink.10 While product names and tastes may vary across borders, intrinsic emotions often stay relatively the same. To combat this discrepancy, Coca-Cola went so far as to adjust its name in China. The nearest phonetic equivalents of "Coca-Cola" in Chinese characters often had strange translations like "bite the wax tadpole," which prompted the company to adapt to a more consumer-friendly name, reflecting the experience given when drinking the beverage. Coke's trademarked name in China translates as "to permit mouth to be able to rejoice."11
In addition, a global mindset may help import-export businesses promote a "rapid and efficient" way to share best practices across borders.12 International businesses adept at this tend to be skilled at building trust with other cultures. For example, an international workshop called the U.S.-ASEAN Smart Cities Best Practices Exchange program was held in Singapore in July 2017. The event gave companies from the U.S., Vietnam, Indonesia, Myanmar, Philippines, and Singapore the opportunity to network and share best practices on particular subjects.13
The ability to export new products quickly and innovate new concepts and technologies is another potential benefit of developing an organization-wide global mindset.14 For example, the IMD explains that it took 27 years for Procter & Gamble to bring Pampers diapers into 20 different countries because they lacked the global understanding to take advantage of local opportunities. On the other hand, it took Vidal Sassoon hair products only two years to get into twice as many countries, as managers had a better awareness of local prospects.15
In another example, GE Healthcare used a concept called "reverse innovation" to take inspiration from emerging markets. The company had little success selling equipment in India due to high costs. Instead, GE and regional managers developed an affordable, portable, electrocardiogram machine that became successful in India, and later became popular with emergency response medical teams in the U.S.16
Coordinating international import-export business can be difficult, especially when trading with a variety of cultures in different geographies. But import-export businesses with a global mindset tend to be ready and willing to adopt good ideas and successful practices wherever they come from, in turn using differences as opportunities to promote their success and growth.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. Developing a Global Mindset: The Five Keys to Success, IMD; https://www.imd.org/research/publications/upload/32-Global-minsets-27-01-2014.pdf
2. “Definition of global mindset,” Financial Times; http://lexicon.ft.com/Term?term=global-mindset
3. Developing a Global Mindset: The Five Keys to Success, IMD; https://www.imd.org/research/publications/upload/32-Global-minsets-27-01-2014.pdf
6. “Global Companies: Innovation Rising in Emerging Markets,” Capital Ideas; https://www.thecapitalideas.com/articles/global-companies-innovation-rising-emerging-markets
8. “Loss Of India Market Share Could Cost Nokia 20%,” Forbes; https://www.forbes.com/sites/greatspeculations/2010/10/25/loss-of-india-market-share-could-cost-nokia-20/ - 24b40bac7c0d
9. Developing a Global Mindset: The Five Keys to Success, IMD; https://www.imd.org/research/publications/upload/32-Global-minsets-27-01-2014.pdf
10. “5 Global Companies Localizing Right,” KantanMT Blog; https://kantanmtblog.com/2016/09/28/5-global-companies-localizing-right/
11. “Bite the Wax Tadpole?,” Coca Cola; http://www.coca-colacompany.com/stories/bite-the-wax-ta
12. Developing a Global Mindset: The Five Keys to Success, IMD; https://www.imd.org/research/publications/upload/32-Global-minsets-27-01-2014.pdf
13. “ASEAN Smart Cities Best Practices Exchange – July 5, 2017,” Export.gov; https://2016.export.gov/singapore/tradeevents/smartcitiesbestpracticesexchange/index.asp
14. Developing a Global Mindset: The Five Keys to Success, IMD; https://www.imd.org/research/publications/upload/32-Global-minsets-27-01-2014.pdf