2007-01-08T08:56:48.850-08:00In his inaugural column for "Going Global" on Fast Company's blog, Josef Blumenfeld encourages readers to make 2007 the year they go global. As an "expert" for Fast Company, Blumenfeld will contribute regularly to the publication's website and blog.
2006-12-29T19:36:35.813-08:00Media Magazine (Asia)November, 17 2006Distribution critical to Wal-Mart China strategyWal-Mart's expected acquisition of Chinese grocery chain Trust-Mart will give the US giant unprecedented scale, catapulting it ahead of Carrefour to become the largest foreign retailer in the mainland. In China, meanwhile, Wal-Mart is attempting to become a national retail chain in a country with no cohesive national distribution system. According to Tradewind Strategies founder Josef Blumenfeld, by establishing a nationwide retail footprint, Wal-Mart will lay the groundwork for future economic growth across China. Grey Worldwide Shanghai general manager Alan Lo said Chinese consumers spend less on shopping per visit than Americans, but they shop more frequently.BRAND HEALTH CHECKThe world's largest retailer finds itself at something of a crossroads in the world's most populous nation. Wal-Mart's expected acquisition of Chinese grocery chain Trust-Mart will give the US giant unprecedented scale, catapulting it ahead of Carrefour to become the largest foreign retailer in the mainland.But several questions marks remain over Wal-Mart's international strategy. At present, over a fifth of its US$316 billion in total sales are generated outside the US; Wal-Mart would like that proportion to be closer to a third.But progress has hardly been smooth. Its UK subsidiary continues to underperform, while high-profile pullouts have occurred in Korea and Germany.In China, meanwhile, Wal-Mart is attempting to become a national retail chain in a country with no cohesive national distribution system. Clearly, the rewards are huge, with the mainland retail market estimated to be worth US$750 billion by 2008. And distribution is just one worry.Already the company has given in to unionisation demands from the state-run All-China Federation ofTrade Unions, a notable climbdown from its anti union US stance.It has also made key strides in honing its offering for the unique characteristics of the Chinese marketplace, where consumers do not want to buy a carboot-load of supplies at each visit.But Wal-Mart is one of the most financially successful companies the world has known, so few doubt the seriousness of its Middle Kingdom aspirations. A number of foreign players, in addition to the already-ensconced Carrefour, are eyeing the China market, and competition is expected to intensify. Tesco recently announced plans to launch its first branded store in Beijing,as the first step to branding all of its 42 jointly-owned Chinese hypermarkets.With retail sales growing at a 13 per cent clip per year, there may be a big enough pie to satisfy several international companies. Given Wal-Mart's appetite for domination, of course, a slice will not be sufficient - unless it is the biggest slice of them all.Diagnosis 1The global market-place is littered with companies, competitors, and consultants that underestimated Wal-Mart. While it recently suffered punishing rejections in Korea and Germany, there are few other US companies better suited to mine the consumer marketsof China.Wal-Mart will succeed in China because it has no alternative - Wall Street expects the world's largest retailer to be a leader in the world's largest market. While it remains to be seen what the company will do with the well-known Trust-Mart brand, one thing is clear: Wal-Mart will export its acclaimed distribution innovation from the US.By establishing a nationwide retail footprint, Wal-Mart will lay the groundwork for future economic growth across China.Given the lack of a centralised distribution system in China, Wal-Mart's entry into the market will bring important infrastructure advances nationwide. By putting down roads, building distribution centers, developing local tools, and training staff, Wal-Mart is giving China long range economic assets that stand in stark contrast to the low-price-export machine that is the cornerstone of its current relationship with the Middle Kingdom.Josef Blu[...]
2006-10-13T18:40:43.890-07:00October 8, 2006Life's WorkLip Balm as a Metaphor for Fear By LISA BELKINFOR several hours last week there were clothes, medications and toiletries spread all over my bed while I inspected my bottles of moisturizer, hair gel and shampoo. I was trying to pack for an extended overseas business trip just a few days after the “no liquids and gels” rule had become a “some liquids and gels” rule. Time was when I packed quickly and out of habit. This trip, my routine was as scrambled as my belongings. If my six-ounce jar of moisturizer was only half full, did that meet the three-ounce limit? Could I squirt my hair products into smaller travel-size tubes? Should I try to fit everything into a carry-on? And why does the supermarket sell gallon-size Ziploc bags and sandwich-size Ziploc bags, but not the quart-size bags I seem to need at security? Business travelers are adept at recalculating the equation as the factors change. We stopped carrying nail scissors and wearing belts after 9/11, started wearing slip-on shoes after an attempted shoe bombing six months later, abandoned our lighters a few years ago. The liquid ban was trickier, but we coped. Steven Rothberg, president and founder of CollegeRecruiter.com, a job-hunting Web site, travels every other week for one or two nights. “You can shave without shaving cream or gel,” he said. “Face soap works just fine.”Carla Caccavale, a partner in Quinn $ Company, a Manhattan public relations firm, tells how she avoided checking luggage on a recent overnight trip: “I put my makeup on in the morning, and didn’t pack any with me so I wouldn’t have to check, and just went sans makeup for my early return flight the next day.” Her colleague, Danielle Pagano, an associate vice president at Quinn, had taken to shipping her toiletries via overnight mail so she could stick to her “carry-on only” rule, and still have her favorite moisturizer or lip balm. But FedEx bills add up, so Ms. Pagano was excited two weeks ago when she heard that the rules had changed yet again. Her excitement didn’t last. “The good news is I can start taking my lip balm with me into the cabin,” she said. “The bad news is that none of my other cosmetic products are three-ounce or smaller.” So she went to Plan C, or maybe D, she’s lost track. She hit the cosmetic counters of a nearby department store and collected sample sizes. Packing is not the only travel routine we have changed. With each new restriction, a percentage of us restrict our travel. Andrea Nierenberg, president of the Nierenberg Group in Manhattan, which runs workshops on business networking, now takes the train, or even better (remember those bombings in Madrid?) a car service, as far north as Boston and as far south as Washington. Her use of black cars has increased 75 percent over the last three years. Mark Stevens, the chief executive of MSCO, a marketing and management firm in White Plains, has also started avoiding the airport. “Whenever possible, I say dial instead of fly,” he says. “Ninety percent of the time we spend 40 hours cabbing, flying, hoteling and waiting to hold a two-hour meeting that without the protocol and breaks for tuna wraps, we could have conducted in 15 minutes by phone.” When we do fly, some of us are changing the planes we fly on. Josef Blumenfeld, business strategy consultant with Tradewind Strategies, said: “ I fly American carriers as infrequently as possible. I feel those planes are the ones most likely to be targeted by terrorists.”He has also changed the way he dresses when he flies, and he doesn’t just mean not wearing a belt. “I used to pride myself on not appearing like a ‘traveling American,’ ” he explained in an e-mail message. “I used to wear European suits, shoes, and viewed it as a touch of safety. Now, given all the lines/hassles at passport control and customs, I dress as ‘Yankee doodle dandy’ as possible. One [...]
2006-12-29T19:38:10.013-08:00From the current issue of American Executive magazine: http://www.redcoatpublishing.com/features/f_09_06_globalstrategies.aspLike most American businesses, your company probably divides the world into four or five zones: North America, LATAM, APAC, EMEA, and the ever-present ROW (rest of world). For as long as US businesses have been doing business, these designations have served to delineate sales territories, marketing goals, travel budgets, IT expenditures—even bean-counter-level minutiae.These are artificial groupings, however, designations that were designed decades ago when international travel was rare and international business often rarer. Dividing the globe this way is an American convenience that creates a narrow worldview. The rest of the world (I’m tempted to use the condescending American ROW) does not use these artificial delineations.Clinging to nomenclature simply because of its staying power in US business harms our ability to mine the world’s opportunities and undermines America’s ability to lead the global economy. Worldwide customers no longer fit into the boxes that corporate America created, and we are paying the price for failing to see the opportunities that exist outside the boundaries of these zones.Et tu, Microsoft?Wikipedia’s definition of EMEA is instructive. “EMEA is a regional designation used for government and business purposes. It is particularly common among North America-based companies, which often divide their international operations into the following regions: EMEA, LATAM, APAC.”A Lexis search of EMEA illustrates that countless American companies use the term. But when one considers that EMEA encompasses Europe, the Middle East, and Africa, seeing this as a single whole makes little business sense.Even globally minded companies such as Microsoft use this designation. Microsoft’s EMEA site offers IT solutions for 10 categories, including government, investors, and women in IT. EMEA’s governments include liberal democracies, totalitarian regimes, and everything in between; its investment climates range from the transparent to the opaque; and the role of women is starkly different from one corner of EMEA to the other. Given these disparities, is it possible for even mighty Microsoft to force-fit these markets into 10 solution categories?Microsoft touts the availability of Windows in 19 languages spoken in EMEA. But the European Union has 11 official languages, and the African Cultural Center claims there are 1,000 languages in Africa (South Africa alone has eight languages).The population of EMEA is staggering. Internet World Stats lists Africa’s population at 915 million, Europe at 807 million, and the Middle East at 190 million. This means the area has 1.6 billion people—30% of the world’s population. The group of countries known as APAC is even more ludicrous to lump together; it comprises more than half the world’s population and spans more than 35 countries.These are geographies, not markets. Countries within these designations often share nothing but proximity, and even then, it is difficult to argue that South Africa and Norway are proximate neighbors. Viewing your company’s global operations through this antiquated lens is limiting and counterproductive. How America sees the world is far from how the world really is.These “comfort-zone” designations create missed opportunities that could impact the bottom line:1. Borderless markets that overlay regions (e.g., the youth market)2. Same-language synergies that reduce cost (e.g., Spain and Latin America; Portugal, Brazil and Macau)3. Cost-saving cultural similarities (e.g., UK and US)4. Deal flow between regions (e.g., South Africa and Australia)5. Expat communities that exert strong influence on buying decisions and patterns in their home countries (e.g., Indian communities in UK/US and the 1 million-strong Japanese community in Brazil)[...]
2006-04-24T10:49:43.243-07:00Shanghai med device company wants to know Mass.Boston Business Journal - April 14, 2006by Mark HollmerWang Youshan contacted the Boston Business Journal recently, wanting to introduce himself. And our life sciences readers may want to pay particular attention.Wang is chairman and president of the Joy Main Science and Technology Group Corp., also known as Joy Main -- www.joymain.com on the Web -- a medical device company headquartered in Shanghai with more than 18,000 employees.Joy Main makes and sells everything from blood pressure and body fat monitors to weight loss products, and clothing and bedding products that feature something known as "Far Infrared" properties that are said to help treat pain and insomnia. The 6-year-old company is already a giant, spread out through 30 provinces in China with $280 million in revenue reported in 2005. Joy Main reaches legions of Chinese consumers through 3,600 stores and franchise businesses and 7,000 sales counters at local department stores, and some of its products are already sold internationally in Australia Austria, Japan and the United States.And now Joy Main wants to grow here, by beefing up its U.S. presence and making deals with local medical device companies.Speaking through an interpreter, Wang extended an invitation to MassMedic, for example, the state's medical device industry group. He wants any interested members to come visit the company and its facilities.He hopes to obtain new American biotechnology and medical device products that Joy Main's extensive distribution network can sell. He wants to form partnerships with American sales people who can promote Joy Main's products here. Wang also looks to form partnerships with biotech and medical device companies who could help develop, market and sell Joy Main's research and development platform. And Wang is interested in finding American economic specialists who can help him boost sales even more in China.Wang's interest in Massachusetts aside, his story has a big twist: Wang found his Massachusetts audience, via the Boston Business Journal, pretty much by chance.Last week he represented one of about 125 Chinese companies that registered for a New York state-sponsored conference last week held to help Chinese companies establish themselves domestically. He became aware of us because of Joe Blumenfeld and Janet Carmosky, the two principles of Massachusetts-based Outbound China, a new consultancy formed recently to help Chinese companies deal with logistics and public relations issues as they establish themselves here (we wrote about it last week). Outbound China attended the conference. The pair met Wang. Hoping to build a relationship with him, they said they could help Wang reach the Massachusetts audience in which he expressed interest. Carmosky herself acted as a translator.Wang said that he hasn't approached or been approached by any Massachusetts state officials yet. He remains interested, however, because of the state's rich industrial and technology base and its strengths in biotechnology and biomedical research and development.It's not that Massachusetts isn't making the effort to develop contacts in China. The Massachusetts Office of International Trade and Investment, for example, employs a consultant in Shanghai and is working to both help Chinese companies expand here and firms here make similar contacts overseas. This week the consultant was to join a MassMedic delegation at a medical device trade show in Beijing to help drum up business and contacts.Blumenfeld, however, says Massachusetts state and industry officials could do more to reach out to Chinese companies itching to expand into the United States."We need to welcome these companies," he said. "Their successes will create jobs."http://boston.bizjournals.com/boston/stories/2006/04/17/newscolumn3.html[...]
2006-04-11T22:41:34.280-07:00Tradewind Strategies is thrilled to be partnering with China Prospects in a joint venture called Outbound China www.outboundchina.com
2006-03-07T20:37:40.876-08:00Josef Blumenfeld highlights current shortcomings of foreign firms advising Chinese businesses.
2005-11-29T18:44:20.603-08:00Consistent Harmony - American Executive, December 2005There was a time when Made in the USA was the highest accolade a product could carry. The world’s consumers lined up to buy American products and capture a taste of the American dream. McDonald’s golden arches gleamed with global allure; Levis hugged the figures of the world’s “in” crowd. Cadillac was used as a synonym to describe a level of high quality. We even sang about buying the world a Coke.How times have changed. Today, McDonald’s and KFC outlets are the sites of protests and even violence. Levis has a global brand value below that of Spanish retailer Zara. General Motors is gasping for breath while Toyota and BMW race ahead. Mecca-Cola competes for shelf space in European grocery stores.It’s clear that the world’s passion for American brands has been tempered. American companies comprise 68 of the world’s top brands, but huge swaths of the world’s consumer markets hold negative views of the US and US businesses. In some countries, double-digit percentages of the population actively boycott American brands.There’s no question that the war in Iraq and America’s pursuit of its own self-interest has spurred much of this anti-Americanism. But the war is only the latest catalyst, albeit one that may portend a sea-change for American brands.Several US publications have looked at the implications of weakened acceptance of American brands. In some markets, consumer support is merely declining; in others it’s in freefall. Polls by Seattle-based GMI show that 67% of French consumers and 58% of Germany’s harbor negative impressions of US companies. Other research found that 20% of respondents in Europe and Canada say they consciously avoid buying US products. Similar percentages in China and Japan echo that disturbing trend.Of course, many American brands continue to thrive in global markets. Marlboro cigarettes remain a top seller in most markets. Tiffany & Co. sparkles with customers; many are happy to get on waiting lists for hot products. Clothes from The Gap complement haute couture on Parisian shoppers. American technology leaders Microsoft, IBM, Intel, HP, Cisco, and others provide the tools and innovations that fuel the global digital economy. Starbuck’s serves coffee to consumers around the world and test markets pioneering innovations such as its digital music business in trend-setting Asian cities. Defying skeptics and surprising even some optimists, Starbuck’s now has 10 outlets in café-cultured Paris, a market some said would send the American brand back to the US in shame.Remember TWA?In an economy where every percentage point counts, and global markets may be the only opportunity for growth, the market erosion has triggered alarm bells in boardrooms and executive offices across the US. Those percentages represent people, and American companies are confronting the possibility that markets may reject them.The brands at the top always face pressure from those on the rise, so it’s possible the current decline simply signals a shift in tastes away from the brands that have dominated the marketplace for decades. But many in American business are concerned that we’re be seeing a shift in consumer values rather than tastes.The end of an iconic American brand is not without precedent. Pan Am and TWA were once the recognized leaders in global travel; today, they are little more than proof points in a business school case study on what happens when the buying public rejects a brand.Some experts are advising American brands to distance themselves from their US identity. Take on a local “face,” the thinking goes, and you can be seen as less American. But having spent countless fortunes on building these brands, some American products will be unable to shed the[...]
2005-08-16T11:58:12.056-07:00(Published in Mandarin in China Business August 12, 2005)The Haier/CNOOC chapter of US-China business relations has drawn to a close. The withdrawal of both bids for US companies – even before Maytag/Unocal shareholders could vote to accept or reject the offers – effectively returns us to where we were before: Lenovo remains the only example of a successful Chinese acquisition of an American company. The bloodbath that followed both bids was regrettable and avoidable. China’s overall business community – collectively dubbed “China Inc.” in the West – has been soundly defeated. There is an opportunity now that China Inc. should seize. For Chinese companies to succeed in the US, they must adapt their approach to the market and learn how to bring a positive and cooperative message directly to the American public. China’s opponents and competitors learned very quickly how easy it is to undo even well intentioned Chinese efforts: frame the debate and drive the press coverage. If China harbors any hope of success in the US, its business messengers must learn to bypass the anti-China filters that now pervade American media coverage and public opinion.In an August 3 editorial on the “sunk” CNOOC deal, the Financial Times wrote: “surprisingly, given the importance of China to so many US companies, there was no sign of a balancing pro-China” message to counter Chevron’s opposition to CNOOC’s bid for Unocal. In Haier’s case, there was no message at all – only deafening silence from the company as it tried to purchase an iconic US brand in America’s heartland. Contrast this to the visibility of Lenovo executives following the announcement of its acquisition of IBM’s PC business. There is plenty of blame to go around for this outcome and not all of it is for China – the Western advisors both Chinese companies hired share in that blame. Bankers and lawyers, marketers and lobbyists have lined up to help China’s business navigate the US market – one that is as foreign to the Chinese as China’s market is to America . Western businesses working with Chinese companies will share in successful cross-border M&A activity, but those businesses must offer the very best and most strategic counsel possible. Western “experts” did not distinguish themselves with a successful pro-China balance, as the Financial Times observed, and their clients failed. We must do better.The Chinese business community can do better as well. Executives from both Haier and CNOOC were conspicuously absent in US media – particularly TV. Opponents of both efforts, however, maintained high visibility and honed their message to a consistent and constant warning against these acquisitions. Neither language barriers nor cultural expectations can serve as an excuse for not communicating. Come to the US – the Western press and public have always been open to new ideas and information.When the influential Nightly Business Report televised its interview with Lenovo’s CEO, media reports indicated that this was Yang Yuanqing’s first interview with the American press. While it is surprising that an officer of a global company like Lenovo was a complete “unknown” to the American media, the company’s public communications in support of its acquisition were commendable. Simlarly, prior to its highly successful IPO last week, baidu.com’s CEO was also visible on US business channels.There is a seemingly endless flow of consumer and market data produced in the US. This insightful information should be required reading for any Chinese executive with international designs. Chinese businesses can learn about their target markets – what are the pressure points, who are the stakeholders that drive action, wha[...]
2005-06-22T13:26:37.160-07:00Unless Haier's PR and communications surrounding its attempted acquisition of Maytag improve dramatically - and quickly - China's business community will get a collective lesson on the value and importance of communications, particularly in a market with a free press. After being interviewed by US media outlets, it's clear to me that a series of missteps and poor communication are not serving Haier well. If I were a leader of the union that represents workers in Maytag's plants, I'd be leaning heavily on Sen. Tom Harkin to oppose this sale.
2005-05-11T20:14:58.103-07:00Articles in Asia and US Provide Keys to Unlocking Promise of New Markets Through Successful Global Communication
2005-05-05T11:17:09.133-07:00The May issue of American Executive Magazine is running an article on global communications:
2007-02-28T09:23:01.826-08:00Interesting article from today's Washington Times on the backlash I've also feared American companies will face in the global marketplace. I anticipate that the ability/inability of US companies to do business abroad will be an important business story in 2005. US brands are facing international market rejection, compounded by loss of market share when their competitors take advantage of this low in America's standing to court consumers in precarious markets. My commentary and background on Tradewind Strategies appear in the last several paragraphs. http://www.washtimes.com/upi-breaking/20041227-062212-4711r.htm Europeans costing American companiesBy Donna Borak UNITED PRESS INTERNATIONAL Washington, DC, Dec. 27 (UPI) -- The Bush administration's foreign policy may jeopardize the economic health of American multinational companies abroad, an international consumer survey released Monday said. According to an international survey of 8,000 consumers taken by Global Marketing Insite World Poll on Dec. 10 through 12, fifty percent of foreign consumers distrust American companies as a result of the U.S. decision to invade Iraq and the war on terror. Additionally, 79 percent said they distrusted the American government, while 39 percent said they distrusted Americans. "American companies' livelihoods depend on trust. It's extremely important. You almost never get a second chance once that trust is lost," said Allyson Stewart-Allen, co-author of "Working with Americans." International consumers surveyed from G8 countries like China, the United Kingdom, France, Germany and others described U.S. brand companies like AOL, Exxon Mobile and Starbucks as "arrogant, intrusive and self-centered" making them the top companies likely to be boycotted. However, analysts explained that consumers were more inclined to boycott a product because they believed it closely resembled the attributes of the United States, rather than brand loyalty. For example, 64 percent of consumers surveyed thought of American Express as "extremely American," while only 17 percent considered Visa to fall into the same category. According to Mitchell Eggers, COO and chief pollster at GMI, Visa has been an exception to the rule because it has been able to detach itself from the image of being an American company - a problem that may cost other companies loses in revenue. "Some American brands become closely connected to their country of origin and are quintessentially American," Eggers said in a released statement. "They represent the American lifestyle, innovation, power, leadership consumers as a significant negative, when it used to be a positive." According to the poll, the negative international perception of the United States matched the unenthusiastic views of American multinational businesses. Based on their findings, 61 percent of French consumers and 58 percent of German consumers had negative feelings toward American multinational companies. While an additional 47 percent of European and Canadian consumers viewed how Americans conducted business negatively. "American companies are accused of aggressiveness and arrogance because they insist on imposing the American way of doing this on their international markets; they are inflexible. They show limited respect or concern for non-U.S. cultures," said Stewart-Allen. For the last three months, GMI tracked the consumption of American products by Europeans and found that as many as 20 percent consistently said they would deliberately avoid purchasing American products. The survey, which is based entirely on consumer perception, has already seen some affect in the current market with the recent mass[...]
2004-12-21T21:34:27.910-08:00The following article that I wrote was recently published by Mass High Tech: http://www.masshightech.com/displayarticledetail.asp?art_id=67411&sec_id=130 Cultural Awareness Carried the Day for Companies Seeking Global Reach Dec. 20, 2004 How you answer this question could be an indicator of the future of the Massachusetts’technology sector in a globalized economy. Ready? What country is achieving economic growth of 8 percent a year, graduates close to 1 million engineers and programmers annually, saw its stock market rise 80 percent last year, and has free trade agreements with Japan, Australia and the United States? If you answered "China,"you were off by a couple of thousand miles. Read on for the answer, below. Since 2000, Massachusetts has lost more than 94,000 Innovation Economy jobs. And it’s not over; layoffs and restructurings continue. The Massachusetts Technology Collaborative recently observed that Massachusetts businesses are failing to capitalize on globalization and that the regional economy could be significantly expanded by "serving a wide variety of international markets." A recent piece in BusinessWeek pointed the way to those markets for the high tech industry. According to the report, with affluent markets maturing, tech's next one billion customers will be Chinese, Indian, Brazilian, and Thai. In reaching them, the report predicts, the industry will be deeply transformed. Unless something changes, this transformation is likely to leave many Massachusetts technology companies behind. Massachusetts has a lot going for it: large immigrant/expatriate communities; proximity to Europe; an established venture capital community; a multilingual, diverse workforce; and world-class services that can aid corporate globalization efforts. The state’s innovation economy accounts for 25 percent of its workforce. For Massachusetts to continue to thrive, new businesses and industries must blossom, creating new jobs. To make that happen, we need new markets. Agility, flexibility and timeliness are crucial to reach global markets. Opportunities can appear or disappear virtually anywhere, anytime. Exploring the following seven parameters can give any company an edge as it ventures into the global arena:Gauge your company’s collective global experience. Make sure your organization has team members with work experience in key markets - these may include China, India, Japan and Korea. It could be anywhere. Ask your marketing department what international expertise is in-house and what outside resources exist. If no one in corporate marketing has a valid passport, take that as a sign of trouble. China. No matter what your business is, your company is likely to be affected by China. From Lenovo’s acquisition of IBM’s PC business to supply chains to the 2008 Olympics, the business momentum in China is having an effect on corporate America. The opportunity in China is as impressive as China is vast. The risks of doing business in China are no secret: constant innovation and cultural savvy are key to staying ahead of reverse-engineering, counterfeiting and counter-innovation (it’s coming). Don’t let the allure of China overshadow India for attention. India is a democracy with a thriving free press. Indians speak English, and are more culturally transparent to Westerners. These are important distinctions from China. In addition, India’s information economy is booming. Although the media spotlight is focused heavily on the issue of offshore outsourcing and the resulting loss of U.S. jobs, Indian job growth carries an upside: household consu[...]