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Global HRM

Notes sends a message to consumers, that it must be the best product, since “so many consumers
throughout the world cannot be wrong”. This is because even in the economy as a whole
“everybody loves the winner”. In selecting the countries to which the business is to be expanded,
there is also the objective of being the First In, reflecting the dictum: “second place is first loser”.
Following on from the fall of the Wall, the expansion into the previously closed-off countries of
Eastern Europe has once again demonstrated that the company which enters a market first
achieves what are called “first mover advantages” and becomes a synonym for a whole range of
products, which makes it possible for long-term market leadership to be achieved.
The multiplication of superior concepts: After all the criticism which is directed against the
companies which have a world-wide business and high-profile brands (such as COCA-COLA,
McDONALD’S, GAP, STARBUCKS etc.) and which are present almost everywhere, it is usually
overlooked that such companies make use of superior marketing concepts, which were initially
exclusively employed over many years in their home markets, and then adapted and continuously
developed for use in foreign countries. The consequence is: Consumers simply prefer to buy the
products of such manufacturers rather than those of other mostly local producers, either because
the products of the former are better in quality, or cheaper, or more innovative, or are just in fact
“more trendy”, or quite simply: because they come from the West (mostly from the USA). It is
therefore almost impossible to be successful with some undifferentiated and possibly
qualitatively inferior product against the competition which exists in virtually all business
areas in all countries of the world. Additionally, experience has shown that it is more difficult to
operate and succeed in foreign markets than in familiar home markets. If companies wish to be
successful throughout the world, they and their products must be “top fit”. The characteristic of
being superior cannot though apply to all parameters within a company’s range of products and
services. Nobody can be “champion in all sports” simultaneously. The “secret formula” for
internationally successful companies is on the contrary to focus on a small number of key
competencies, which may include:
 Unbeatable low prices and low-cost production processes, such as with IKEA or HENNES
& MAURITZ
 Unique products (such as with McDonald‘S or KELLOGG’S)
 Superior and really extensive advertising or promotion activities, such as with COCA-
COLA or WRIGLEY’S
 An extremely cheap distribution concept (as with ALDI)
 Innovative technology (as from MICROSOFT or SONY) which can be applied everywhere
in the world
 Or “simply” superior marketing know-how (such as with UNILEVER or NESTLÉ), which
makes it easier to enter new markets quickly and successfully

Increasing “Shareholder Value”: The expansion of company’s commercial activities to an
increasing number of the world’s countries not only increases the company’s value due to its
increasing sales and size. But at the same time, such expansion requires large financial resources,
which actually increase exponentially, since one can assume that priority will be given to
markets which can be exploited fastest, most easily and most cheaply while those markets that
are regarded as complicated or risky will only be “occupied” later. It is therefore not surprising
that most “global players” are quoted on the stock market, and that most of them are traded on
Wall Street since through bank credits, loans or other expensive sources of finance, such expansion
programs could not be undertaken. Therefore – unless financing is done from internal sources,
generated from retained profits, financing via the stock market forms an integral and essential
part of the expansion strategies of global companies. The disadvantage of this relatively
inexpensive resource for funding expansion, however, is that the stock market has to be involved.

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