Member Article

How to increase your international base

As a small business, going global may seem like a daunting prospect. In fact the UK is one of the leading countries of micro-multinationals – small, self-starting companies with operations in various international locations. By operating in this way, numerous small businesses are spreading out production to create products at a lower cost. Manufacturing products across different borders or having different components of the business based overseas, these companies are small yet wield international influence.

Historically micro-multinationals operated in niche sectors, including engineering and technology. However the concept is now spreading to other industries and is becoming a more established feature in the UK. These businesses demonstrate real dynamism by reducing their costs, staking their international presence and going against the traditional business structure.

What is a micro-multinational?

Identifying as a global company is no longer the prestige of well-established large corporations. Being international is now the playing ground of a growing number of small business owners. In fact, micro-multinationals share similar characteristics with multinational corporations. Many source producers and suppliers overseas in order to keep costs down, and use a range of technologies to stay connected. By doing so, these businesses are forging strong relationships with their target consumers.

All these businesses need is a computer, a strong shipping network and a big idea. Even the smallest UK business has access to communications and innovations that were beyond the reach of companies just 15 years ago. By combining virtual networks (high-speed internet, mobile communication and other digital technologies) with physical networks (transportation systems and logistics platforms), micro-multinationals have the potential to shake-up industries virtually overnight. These businesses may come to define our era as large multinational corporations defined global business in the late 20th century.

The benefits of being a micro-multinational business

Micro-multinationals are a critical part of the global economy. They enjoy the same advantages as other small-to-medium-sized enterprises (SMEs), the agility to respond quickly to market changes, a collaborative DNA that fosters innovation, and the absence of the institutional inertia that often afflicts larger organisations[1].

That said there is a distinction to be drawn between micro-multinationals and SMEs generally. Micro-multinationals enjoy advantages unavailable to SMEs operating in a single market. These include the ability to exploit global variations in knowledge, skills and labour costs[2]. They can operate their businesses around the world and around the clock across multiple time-zones[3]. While micro-multinationals have all the traditional benefits of being small and nimble, they have additional benefits of operating and marketing their products and services in multiple global markets[4].

All-in-all micro-multinationals have an added competitive edge. They have the knowledge and understanding of conducting business overseas, allowing them to easily enter emerging markets and adapt to cultures and consumer habits.

How micro-multinationals are changing the traditional business landscape

At FedEx, we believe that micro-multinationals will change the face of global business across industrial sectors and geographical boundaries. This is an area SMEs should consider venturing into. There has been a recent movement and increase in micro-multinationals, resulting in small businesses spanning the globe and benefiting from cross-border trade. The logistics industry has a key role to play in this, providing not only rapid and reliable logistics, but also deep expertise in trade regulations and supply chain management[5].

Small companies can now think big. They have an increased opportunity to break down barriers to entry and follow this rising trend. By creating a seamless international value chain SMEs really can see the bigger picture. Global reach needn’t be perceived as a large companies’ playground – it is feasible for SMEs too.

[1] Mettler and Williams, The Rise of the Micro-Multinational, The Lisbon Council 2011

[2] Foreign Policy, 2011

[3] Foreign Policy, 2011

[4] Foreign Policy, 2011

[5] FedEx GCR, 2014 & 2013 & FedEx APAC 2014

This was posted in Bdaily's Members' News section by Martin Davidian .