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When the famous marketer Ted Levitt first coined the term "globalisation" as a proper business term in 1983 it was well underway in the leather industry with hides, leather, footwear, gloves and garments winging all round the world. Nike had long been a "virtual" corporation.
We have just spent a morning bringing these thoughts up-to-date as in recent years, while still wanting access to the global brands education, travel and the disposable, society appeared to have made us keener to lean back to our roots. So today's consumer often wants the status and image of owning a global brand but, yet, a sense of belonging to their local community. For Coke this might be the adaptation of the logo so that what it means around the general themes of family, celebration, fun and happiness is reinterpreted to make string sense locally, or they promote the fact that it is bottled locally. "Goods are transformed in accordance with the values of the receiving culture.... We need to make our advertising as relevant as possible to the local market", to quote a Coke CEO.
This is pertinent to the leather industry as we are, again, a business in transit. With China getting too costly everyone is looking at moving, and it is not a tsunami in one direction as each company is now deciding its own rationale. Company size and positioning can make the decision, with smaller companies often going for shorter lead times and volumes, and bigger, lower price ones needing to find volume based cost efficiency. Hence, we see determined Country Branding from the likes of Brazil, Mexico, Ethiopia and India to attract buyers and, sometimes, inward investors to drive the value added and employment in the sector.
The tool for assessing Country Specific Advantage is the Porter Diamond; worked out in 1990 when the world was frightened of Japan’s growing economic power. It is a simple and elegant tool looking at the four inter-related aspects of Demand Conditions, Related Industries, Factor Conditions and Strategy/Structure. I wonder how many aspiring "leather" countries have ever checked it out, never mind acted on it? Sometimes the best tools are the simple ones like this.
10th January 2016
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