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Business Globalization: China, Venezuela, France

Even the best-known products and services can be rethought in order to create new value from the irrelevance of location. Thus, under the new direction of the innovative Ford Motor Company, the venerable Jaguar organization is contemplating selling not the car itself but the use of the car. Under this scheme the Jaguar owner would be able to pick up and drive a car of the exact same model in London, Paris, New York, Tokyo, and a host of other cities around the world. The new offering derives its value from usability - irrespective of location.

Among the successful globalizers in our research sample that were not start-ups, the leap to globalization entailed a redefinition of the value created and a change in the basic business model: thus, Fresenius transformed itself from a dialysis equipment manufacturer into a renal care company; WorldCom metamorphosed from offering longdistance voice telephony to offering data communications; and Cemex changed from old-fashioned cement maker to new age cement delivery logistics specialist. Successfully globalizing business start-ups, such as Yahoo! or world smart card leader Gemplus, positioned themselves from the start to make location irrelevant to the customer.

At Gemplus, the business was defined not in terms of particular products or customers that might be location specific but in terms of smart card solutions applicable in a wide variety of settings; as a consequence the company makes and sells telephone cards in China, pay TV cards in Venezuela, and health care cards in the United States. Gemplus adds value by making its product-solution available anywhere. Of course, implementing the strategy of globalization does typically entail international expansion and country-specific investment. In the few years since its founding, Gemplus has become a complex organization with tentacles in dozens of countries. The tentacles serve the purpose of making the company's offerings available wherever the customer might require. The location and scale of card production is important to the cost side of the business equation, but the source of value to the customer is location independent. The offerings of Gemplus are credible and attractive to Venezuelan television, because the Venezuelan executive knows that Gemplus works well anywhere, whether the requirement be for telephone cards in China or for health care cards in the United States. The customer who buys from Gemplus or from Cisco Systems, for that matter, does not think of the purchase as French or U.S. high technology - it has been customized to his or her needs. The customer does derive significant value from the fact that the products and services of these companies can and are being used by others anywhere.

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