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How global is your company, really?
This exercise takes you through three steps to help you evaluate how global your company really is.
1.Consider the percentage of your company’s total sales. Specifically, identify three key percentages:
- Percentage of domestic sales corresponding to the ratio of sales generated within your home country
- Percentage of regional sales corresponding to the ratio of sales generated outside your home country but within your home region
- Percentage of global sales corresponding to the ratio of sales generated outside your home region.
2. Add the percentage of regional sales with the one of the global sales and you will obtain the Percentage of international sales.
3. Repeat steps 1 and 2 for your company’s total set of subsidiaries – that is majority-owned equity affiliates – based on where they are based geographically.
While not the only metrics to determine how global your company really is, the geographic distribution of your sales and subsidiaries will tell you a lot about your company’s footprint. Now look back and think how much and at which speed these percentages have changed in recent years. The evolution over time will give you a perspective of how your company’s footprint has changed and how quickly it has done so.
If you are curious to compare your company’s percentages with the ones of other companies, consider the Fortune Global 500 firms and the research I undertook together with Pankaj Ghemawat to determine how global these companies were some years ago. You may be surprised to know that the figures reported in the article have not changed much in these last few years.
For more information on my latest research on this topic and how, at IMD, we are working together with companies that want to become global players feel free to connect.
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