International solutions which enable small to mid-sized companies to compete in a global economy are greatly enhanced by establishing strategic alliances across all geographies. A firm’s ability to leverage the global-local model is often a key factor of its future success.
We can draw a distinction between product and service companies in that products are now being manufactured (and sometimes designed) more and more in geographies where cost of labor and capital is the lowest and most available. A consumer product bought in a Wal-Mart in Atlanta, a Carrefour in Lyon or a Seiyu in Numazu can be easily made anywhere in the world. Production and distribution costs are often so much lower in emerging markets that no global manufacturer can afford not to move its facilities abroad.
What is the percentage of all Wal-Mart products made outside the USA and shipped to the retail stores across America? Current estimates are at least 80% and that number is probably too low.
Sales, services and aftermarket care associated with those products are however in the hands of delivery teams who understand the culture and the language of the local markets. We source globally but we we consume locally. This is obvious in the Consumer Packaged and Industrial Goods sectors, but what about professional services?
The business services industry is rapidly following suit. Advanced collaborative solutions and technology enable firms to source their expertise internationally while maintaining customer sales and service at the point of delivery. Alliance models leveraging local consulting firms provide the best value. Value creation service offerings include:
- establishing international communities of experts to contribute to problem-solving and solutions design
- creating global centers of competencies where remote learning and knowledge transfer can take place in a virtual world
- exchanging best practices and industry standards / benchmarks across all sectors and functions
- integrating all links of the value chain from suppliers upstream to clients downstream as strategic partners
- re-engineering distribution channels with preferred global vendors to lower costs and improve service
There are many examples of how the global-local model can be leveraged o the immediate benefit of small to mid-tier regional companies around the world. The ability to articulate the model and execute on it is fast becoming a core competency and a criteria for future success for business consulting firms.
Being able to call yourself a truly global firm has strong value for the import and export of project credentials and resources. Being part of an international group without the risk and cost of building or buying this capability has made strategic alliance modeling a favored design for international solutions.