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EUROPEAN BUSINESS "Euro – The Europe’s unfinished business!"

UK MARKET NEWS "Go global or stay Local?"

MBA IN EUROPE? "Take A look at the European Ranking"

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EUROPEAN BUSINESS "Euro – The Europe’s unfinished business!"
Europeans celebrated the birth of a new era as well as a New Year when they opened the Champagne on Jan. 1. As 2002 dawns, 12 European Union countries will introduce euro coins and notes. By the end of February, their national currencies will have been withdrawn, and 300 million people from the Canary Islands to the Finnish Tundra will use the same money. Economic and monetary union – 10 complex and controversial years in the making – will be officially complete. Much has been made of the benefits that the physical euro will bring. With store prices all posted in the same currency, it will become harder to charge more for an appliance, say, in one country than in its neighbour. Euro notes and coins also should loosen the nationalist mentality that many executives and politicians cling to, spurring more cross-border trade and mergers.So, a toast to those who slogged away these years to make the euro a reality, but the hard part of integration is still unfinished: Forging 15 National economies – Including the three EU members yet to take up the euro – into a whole that can compete with the U.S.In other words, the single currency now needs a single economy in which to operate. Variations in national accounting standards, banking rules, and taxes scramble cross-border business. There are plenty of differences from country to country and the harmonization of them will be a tough job! In industrial standards and regulations, for example, after years of trying, European nations have yet to agree on what shape an electrical plug should be and how many prongs it needs. Small wonder, then, that they still have trouble establishing a single market for electrical power. Victories are slow to come, however, that they feel more like biological evolution than political adjustments. It took 30 years of debate, for example, to pass an EU law letting companies operate throughout the zone as a single legal entity. In the mean time, in Belgium, on Dec. 14-15, the 15 EU governments did agree to take steps toward creating a European constitution and coming up with more efficient ways of reaching decisions. Business welcome that bit progress, but they are sceptical. If it takes 30 years to allow the creation of a company with a European identity, imagine the effort it will take to write a European constitution. Given its record, it is outstanding that Europe created a single currency in 10 years. The introduction of Euro notes raises hopes for even bigger examples of harmonization. Who knows? By the time the European children are old, there may be one type of plug that works in every electrical outlet in Europe. Sources: BusinessWeek – European Edition (Jan-02) The London Evening Standard Newspaper (17-Jan-02)
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UK MARKET NEWS "Go global or stay local?" Multinationals are seeking to hold onto success at a local level while enjoying the profitability offered by global brands. There is a very telling quote displayed in large letters in the reception area of Unilever’s Blackfriars office. The words, attributed to the Anglo-Dutch FMCG giant’s charismatic co-chairman, Niall FitzGerald, describe Unilever as "a truly multi-local multinational", and in so doing neatly encapsulate a dilemma confronting the company and its main rivals.On the one hand, leading consumer product manufacturers must make their brands appeal at a local level. On the other, they are under pressure from investors to create global brands because these are seen as offering the greatest scope for growth and the most potential for big margins."The mega brands have the ability of being much more profitable and vibrant than the regional ones. This is a great incentive for firms such as Unilever to create global properties," says Investec Henderson Crosthwaite financial analyst David Lang. Cif: brand owner Unilever took the decision to rename Jif to ensure consistency across its markets, without alienating consumers at a local level, and found the policy a success But creating global properties isn’t easy. There are relatively few brands with truly global reach and the investment required to develop and sustain them is enormous. Manufacturers have to make sure they commit resources to the brands that offer the greatest likelihood of success on the global stage, or else risk throwing their money away.Part of the problem is that most of the big manufacturers have grown as much by acquisition as they have organically. This has left them with diverse brand portfolios, often containing numerous, comparatively small local brands for each of their global power brands.Many top executives in the FMCG sector have spent long hours agonising over how to reconcile the global with the local in a manner that ensures harmony and balance between the two.Unilever, as has been well documented, has begun culling some of its smaller, less profitable brands with the aim of reducing its portfolio from 1600 to 400. Yet for large manufacturers, the decisions on which brands should stay and which should go are often far from straightforward.At a time when economic and cultural imperialism is under the spotlight and ‘globalisation’ is a dirty word for an impassioned minority, brand owners must be careful not to offend local sensibilities.Economies of scaleOne person’s sensible economies of scale and consistency, is another’s cultural homogenisation. In deciding what will stay and what must go, brand owners need to tread very carefully. "In my organisation, there just isn’t enough depth of expertise to service hundreds of local brands in such a way that they will survive in a jungle populated by the biggest and the best," says Simon Clift, Unilever president of marketing for home and personal care. "The brands that will survive and prosper will be the ones that are really differentiated and that have the scale and scope to meet fundamental and enduring consumer needs."He adds that the issue is not so much whether to globalise or localise, rather that both are imperative. The hard part is in striking the right balance. "We have a concept that is best of global, best of local," says Nick Shepherd, Kraft Foods vice-president category development cheese/grocery, Europe. "We do not look to get rid of, sell or destroy local brands for the sake of it. Just because it is a brand in only one country, it does not mean it is for the chop. What we try to do is look for scale in our brands and the way we market them, and that’s irrespective of whether they cross borders."Scale is obviously essential in the case of a multinational business. Where is the financial benefit in having just a collection of local brands scattered across territories? All of these will bear head office costs. This is an unattractive business proposition unless there are internationally shared technologies and marketing synergies that make them worthwhile investments."A lot of the focus here is to make sure we are not managing any non-relevant costs," says Procter & Gamble household marketing director Mark Brickhill. "If a business is not strong enough to survive in its own right, we are better off divesting it."By way of example, Brickhill picks German men’s shower gel brand Cliff, which was offloaded by P&G because it had little scope for international expansion. Moreover, it did not fit in with the group’s core competencies or offer anything special in terms of product or packaging development that could be applied to other brands.By contrast, German toothpaste brand Blend-a-Med is being retained by P&G. Although there is little likelihood of this ever becoming a global power brand, Brickhill and his colleagues see international development potential. This is because its formula development may lead to new combinations that could be used in other P&G dental products.Blend-a-Med is an example of a ‘local jewel’. In the UK, HP Sauce, Marmite, Irn Bru, Dairylea, Daz and Terry’s Chocolate Orange qualify in this category. One of the interesting things about FMCG brands is many that are international are often perceived as local by consumers. Shampoo brand Head & Shoulders was brought to the UK from the US in the 60s by P&G. Recently, says Brickhill, P&G tested some US Head & Shoulders advertising on a British focus group to see whether it would work over here. One consumer in the group said: "Isn’t it nice to see a British product doing so well in America."For this reason, renaming of brands in an effort to achieve international consistency can be a dangerous option. While Olay, Cif and Snickers – previously Oil of Ulay, Jif and Marathon – show it can be accomplished without alienating consumers at a local level, it is not a step to be undertaken lightly.In the case of Olay, says Brickhill, P&G saw an opportunity "to eliminate a lot of complexity from the brand with no downside." But there must be a compelling cost saving and marketing proposition to make it worthwhile, he adds. Brickhill says there is no business he is currently managing where he would want to do that. Unilever’s Clift adopts a similar stance. While he argues that the Cif name change made sense, he would not re-name Lynx, which is called Axe or Ego in other markets."It’s important to show respect to consumers," he says. "Packaging will tend to converge. But we don’t need to change the Lynx brand name. The real synergies come in shrewd equity management and real understand-ing of the brand – not in changing the label."The case of Coco Pops serves as a warning to many brand owners. As part of a European alignment, Kellogg changed the name of its cereal brand to Choco Krispies. Sales plummeted, consumers felt excluded and Kellogg had to back-pedal.With the support of ad agency Leo Burnett, Kellogg tried to make a virtue out of its faux pas, staging a poll allowing consumers to vote on whether or not they wanted the old name back, which they did. Maintaining a balanceInterbrand director Andy Milligan agrees: "A lot of organisations often have global and local strategies within the same company,"he says. "Coca-Cola is a great example of that. There is Coke the brand, which is specifically promoted as a worldwide product, but then in Japan Coke owns a whole range of canned tea products that are very popular in that market, but which it would not want to build globally."Yet clearly the big-brand owners are becoming more global in their outlook. They either export best practice from local jewels to brands in other markets, leverage technology or work to create global brands that either trumpet their international status or cloak themselves in local characteristics in each of their main territories.Unilever’s Seda shampoo brand has been a big success in South America. This is positioned in the same way as Sunsilk in other markets. It makes use of Unilever’s global technology platform, even though the product formulation of Seda in Brazil differs from that of Sunsilk in Thailand because the standard hair types of these countries differ markedly."In the past it would have been pure coincidence if Sunsilk in Thailand had had the same pack-aging as Seda in Brazil," says Clift. "Now it is not. We have been working to leverage best practice across the world."This is what lies at the heart of globalisation. And it is why multinationals will continue to treasure their local jewels as well as nurture their global brands. Sources: UK Marketing Magazine – (Jan-02)
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MBA IN EUROPE? "Take a look at the European Ranking"
UNIVERSITIES WITHIN THE UK 2nd - London Business School (UK) 7th - Cranfield (UK) 9th - Oxford (UK) 12th - University of Cambridge (UK) 14th - City University Business School (UK) 16th - Henley (UK) 17th - University College Dublin (Ireland) 15th -
ManchesterBusiness School (UK)

UNIVERSITIES THROUGHOUT EUROPE 1st - INSEAD (France) 3rd - Instituto de Estudios Superiores de la Empresa (IESE – Spain ) 4th - IMD (Switzerland) 5th - Erasmus (Rotterdam - The Netherlands ) 6th - SDA Bocconi (Italy) 8th - ESADE (Barcelona) 10 th - Instituto de Empresas (Spain)11th - ESSEC Graduate School of Management (France) 13th - IAE Aix-en-Provence ( France)
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LEARNING IN LONDON Tips of the week

Business Programmes at "Kingston University"

Kingston University offers a wide range of opportunities for postgraduate studies. It currently has over 2,000 students enrolled on research degrees or taught courses. We recognise the varied and often unique requirements of postgraduate students. "The Sunday Times short listed Kingston University as "University of the Year" alongside four other top universities in September 2000."Kingston University is located in the pleasant suburb of Kingston upon Thames, just 25 minutes from central London. With about 14,500 students, it is the largest provider of higher education in south west London. Kingston University offers a wide range of opportunities for postgraduate studies and it is recognised as one of the country's leading modern universities. Its reputation is built on: