I Imagine Studio Attends IMPACT Chicago 2011
On February 11th, I Imagine Studio attended IMPACT Chicago 2011, part of the IMPACT Series 2011 by The Kellogg School of Management. The purpose of these events are to provide an ongoing, global forum on the future of business, leadership, innovation, and society.
This time, the keynote presenter was Miles White, the Chairman and Chief Executive Officer of Abbott. White spoke about his concept “The 4 P’s of Global Expansion.” But, don’t be confused by the name, because he did not lecture us on product, price, place, and promotion. The audience, almost all graduates from Kellogg, who has had those 4 P’s drilled into them since birth, was in for a surprise, because he adapted and changed them around, giving everyone in the audience advise on how to globally expand the right way. Key takeaways:
People: This one has to come first, because your employees are an essential part of your business. It is extremely important to have native-born employees, because they truly know the culture and how business there is done. But, not all employees need to be homegrown, because brining in other employees will give you more perspective and cross-regional value.
Products: Your products have to have a distinction when they are being sold in developed versus developing countries. Price is also incorporated here because in developing markets, you have to sell different products at different prices. For example, for Abbott’s infant formulas, they had to add a product line of follow up formulas because in Asia they use the products longer. They also sell different flavors of Pedialyte in different markets, for in the U.S. the sweeter flavors like bubble gum are most popular, but in other countries savory flavors such as vegetables are much more popular (not surprising unfortunately). In developing countries, such as India, people do not care about the patents- so Abbott still sells their brand, but not patented, making it more affordable. So, you have to find out what the consumer wants, and change your products based on the location.
Presence: You have to be committed to your market beyond selling your product. It is important to be close to the customer in every sense. Abbott has different labs and offices depending on the country that it is located in. At their Singapore hub, they have pharmaceutical research labs, where as they do not have those present in India. They also have developed citizenship and feeding programs to show their consumers that they are not just there to make money, but that they truly care about the people they are selling to.
Perseverance: When you are expanding in other countries, you have to plan to struggle- and plan to stay. Branding is hard when you are not a household name, so branding in a new environment is even harder. You also have to be prepared to fail. Abbott backed out of China in the 1970’s, but if they had stuck it out, they would have been there for part of the Chinese revolution and would have seen a lot of success. You also have to know the political and social factors of the countries that you are in and be prepared to stick it through tough times. Abbott stayed in Latin America even in undesirable political times because they felt that the need of their products trumped political factors.
So what can you do with these 4 P’s? Use them as a guidepost for how to become a global leader. The global market right now is just beginning to pick up, especially in developing countries. The United States is not at the forefront anymore, and you have to realize that being a global company is much more than just selling your product outside of the U.S. So in the words of Miles White, “you should not be ‘in’ the market, you should be ‘of’ the market.”