On a recent flight I pulled the monthly airline magazine out and flipped it open. I had been searching for inspiration to write and it was serendipity. James Ashton, writer for the London Evening Standard and the Independent published a short piece titled Global Shifts that discussed the changing corporate landscape brought about by increased globalization. Among other corporations, he focused on UK based Unilever and their leadership training center in the city-state of Singapore. As corporations expand their footprint, they need to diversify thinking. Mr. Ashton contrasts the new way of business with the old, “gone are the days of command and control. Instead of sitting in the same mahogany-lined inner sanctum as each other, executives at firms with ambitions to be truly global are striking out.”
Interesting, I thought. We had just been discussing the merits of Unilever as an investment. Unilever is looking to boost revenue from emerging markets to 75% by 2020 and has a strong portfolio of brands and a very nice dividend, exactly the type of company we are looking for. It’s a way of getting exposure to emerging markets and their growing middle class, without having to directly invest in their volatile stock markets.
How New Companies are Connecting with New Markets
But the deeper story is in how companies are connecting to new markets. They need to research the potential markets, spend time, immerse themselves in the culture, and learn how to connect with new people and consumers. After all, that is what building brand strength and loyalty is about. Mr. Ashton paints a picture for us of a stuffy corporate board room that issues orders down from high without regard for the culture of the new consumers being created. This no longer works; business continues to evolve. Corporations also need to be sensitive to the environment and have campaigns created around sustainability, not because they are do-gooders looking to spend all profits on philanthropy but because the consumers are demanding it.
The “New Corporation” is All About Connection
This new globally-connected, sustainably minded corporation is what people are demanding; consumers want to see their values reflected in their coffee, automobile and cell phone.
In the end, we look for companies that are exceeding the demands of consumers and paying a nice dividend along the way. As for the share prices, the stock market will always be a monster. We build portfolios of brands, not stocks.
