20 June 2016

The rise of the micro-multinationals

A new report from HSBC outlines the five traits of a smart company

International Festival for Business 2016

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It's the mind-set - rather than sector or location - which makes some of today's smartest companies stand out. And surprisingly it's mid-sized companies who are making the running.

In the past, growing a business overseas was tough. No internet, limited and expensive air travel coupled with primitive computer systems made `going global' the preserve of multinational giants.

All this changed with an explosion of innovation at the end of the last century. The mass adoption of email, smart phones and latterly cloud technology has revolutionised the business landscape.

In turn, this has led to the rise of the `micro-multinational', mid-sized firms taking on new markets and competitors by capitalising on their ability to move quickly.

Global mindset - they think across borders and have the confidence to innovate

Like individuals who see themselves as part of a "global community" rather than a citizen of one nation, micro-multinationals regard themselves as global brands. By refusing to 'fix' their identity to one customer group, they have the confidence to innovate when they encounter changing demands.

Intermediate - typically they're a mid-sized company

Micro-multinationals are a force to be reckoned with. HSBC research shows mid-sized companies (turning over USD50m - USD500m) are contributing between 20 and 40% of GDP and employment in some countries.

Agile - expanding internationally early in their business lifecycle

They use their network - of buyers, sellers, contacts and advisers - to best advantage, sussing out new opportunities and creating introductions. Typically micro-multinationals grow by looking across borders earlier in their lifecycle. In the UK, 40 per cent of micro-multinationals have opened offices in new markets in the last five years - one of the highest rates in the world, according to a study by Fedex.

Niche - offering new ideas or just one element of a good or service

In the old days companies would try to be all things to all people. Not any more. Micro-multinationals increasingly specialise in one process, product or even just one component to keep their customers happy. But instead of stopping there, they think about who else could benefit from this specialism or how can it be extended? Then they develop new products, platforms or applications at pace.

Tech Savvy - using new technology to foster their network and brand

Micro-multinationals are technophiles, embracing the latest developments, whether it's systems to help them manage cash flow giving them a competitive edge - or targeting vloggers to review their products. They also harness the power of social networks to carry their brand into new markets.

It’s the mind-set - rather than sector or location - which makes some of today’s smartest companies stand out. And surprisingly it’s mid-sized companies who are making the running.

Key takeaways

Key takeaways

  1. The ability to move quickly allows `micro-multinationals' taking on new markets and competitors
  2. Mind-set rather than location or sector makes some of today's smartest companies stand out
  3. Being tech-savvy, having a global mind-set and agility are some of the key attributes of `micro-multinationals'

For further information about trading internationally, visit the HSBC Connections Lounge at the International Festival of Business in Liverpool where an HSBC Trade Specialist will be on hand to answer your questions or call +44 (0)800 78 31 300.

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