Theodore Levitt is credited with the complete answer as to why international markets are important to entrepreneurs. In his classic Harvard Business Review article from 2005, Levitt said “Ancient differences in national tastes or modes of doing business [are] disappear[ing]. The commonality of preference leads inescapably to the standardization of products, manufacturing, and the institutions of trade and commerce.
Commercially, nothing confirms this as much as the success of McDonald’s from the Champs Elysees in Paris to the Harajuku in Tokyo, of Coca-Cola in Bahrain and Pepsi-Cola in Moscow, and of rock music, Greek salad, Hollywood movies, Fossil Watches, Sony television, and Levi’s jeans everywhere.” Globalization has certainly played a huge role in the needs and wants of consumers. Entrepreneurs believe they can understand and adapt to preferences and trends even if those influences come from thousands of miles away. The world is getting smaller in meaningful ways. Air travel is more safe and convenient. International distribution is more dependable. There are less obvious trade barriers. More people are exposed to other cultures through satellite television and the internet.
Michael Porter of the Harvard Business School is credited with the insight that successful multi-national corporations were pioneers in value added activities from multiple locations around the globe (Porter, 1986). These companies capitalized on the competitive advantages and unique capabilities and expanded into each region of the world in different ways. But today most of the true innovations are made by entrepreneurs.
Yes, it is entrepreneurs who are finding new markets and opportunities abroad. That is why any new business (small or large) must constantly focus abroad for both ideas and new competition. The recent surge in Japanese “soul food” (not sushi) was driven by small ramen and katsu houses inside and outside of Japan.
Qualitative research I conducted via interviews with international business experts in Japan indicates a major difference between the average Japanese and the average American consumer. Both countries boast per capita incomes above $30,000+, but consumption or spending patterns vary significantly. Based on these experts’ opinions, the influence of regional marketing themes is already pervasive in Asia today, and will grow.
One example is women’s handbags where the average Japanese women spends 5-10 times the amount of her American counterpart. It is commonplace to see a an entry level employee or college stuudent sporting a $1,500 handbag. Another example is the convini or 24 hour neighborhood store. You can buy essentials, do your banking, ship packages, buy concert tickets, pay bills, and get assistance with your cell phone all at the same place. These stores are unique to Asia and started in Japan.
Japan is now competing with other Asian nations down a uniquely Asian marketing path that the average American may not understand. Who will design and build the cars, trains, and planes of the future? Even China is following a similar path creating its own unique version of capitalism under communist rule.
