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Business Globalization: World Leadership, Spanish Latin America

Globalizers see the whole world as their opportunity space. To Gemplus's Marc Lassus, for example, the company's "battleground was not really France or even Europe. Because all our competitors were European, we had to go into territories where our competitors did not yet have their armies." Seeking out high-potential mar- kets, Gemplus established sales offices in Singapore and the United States in the company's first year of existence. Rather than building international experience slowly and in culturally proximate markets, many pioneering companies undertaking the leap to globalization establish their first organizational beachheads in the key competitive arenas for global leadership. Both Yahoo! and DoubleClick set up their inaugural non-U.S. operations in Japan. Germany-based Fresenius launched its leap to globalization with a major push in the United States. Our research sample suggests that this kind of frontal attack appears to work best for companies that are first to become operational in a new customer value category and that can draw on a relatively large base market to start with. Such companies are most likely to clearly advertise their global ambitions from the start and then follow through.

Where base markets are small and cultural proximity can be a door opener, as in the Spanish drive to recolonize Spanish and Poruguese speaking Latin America exemplified by Banco Santander (now BSCH) and Telefonica, first moves may initially be understood in the context of international expansion rather than globalization. Eventually, however, these first moves tend to be used as bargaining chips for establishing global competitive position. Telefonica's purchase of Lycos was funded from the success of the company's original Spanish-language Terra Networks. Banco Santander has tried to use its strong position in Latin America to muscle back in on Europe with a true anywhere, anytime offering.

Substantial investment serves the purpose of globalization because it makes globalizing talk credible, sending a clear signal to competitors, but also, just as important, to partner companies and employees. An investment that looks excessive to outsiders may actually be best likened to conquistador Francisco Pizarro's tactic of burning his ships: with their exit route cut off, Pizarro's men could not return to Spain and had to conquer America. Investing in the future today, as if globalization were already reality, is the best test of a company's convictions. Do executives believe in globalization enough to invest in productive resources that do not necessarily have present uses? Can they accept being labeled as overambitious or irrational? Are they able to explain why acting "as if " global is not crazy but rationally ambitious?

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