The American Multinational, Unbowed

by Dave

Front-loading washing machine.

Image via Wikipedia

Areas of improvement for BRIC MNCs on the HR front.
Traditional multinationals have an advantage over many challengers because they can offer career routes to the most talented Indians and Chinese that their own countries’ companies do not yet have. The incumbents, as noted by the authors, have extensive programs in place to assess employee performance, to develop global plans for job rotations and, in general, to build their long-term careers. Not all the challengers know how to do that, and relatively few of them have established truly global footprints.

Nor are big Western companies always captives of their relatively high cost structures back home. They are capable of stripping down and finding profitable niches at the bottom of the economic pyramid.

The authors note that Whirlpool first introduced a washing machine in Brazil in 1998 that cost $300, at a time when the average Brazilian earned about $200 a month. The product was obviously too expensive and did not sell.

Then Whirlpool decided to create a new lower-cost model and developed the machine in Brazil, where the company has skilled engineers and industrial designers as well as sophisticated factories. The Ideale washer was introduced in 2003 at a cost of $150, creating a new market for low-capacity, low-price, semiautomatic washing machines in Brazil.