Think Global, Act Local – How Companies Successfully Navigate the Dynamic World Market

Structural cost and result optimization is now at the top of the management agenda in the manufacturing industry for the first time. For two-thirds of the more than 420 CEOs of large internationally operating industrial companies surveyed as part of the fifth CxO Priorities Study, cost optimization is currently the absolute top issue. This is because a rapidly evolving global economy requires companies to confront it with adapted strategies in order to maintain competitiveness and growth.

Worldwide, companies are creating new jobs and expanding their workforce – unfortunately, not in Germany. Growth is mainly happening abroad, and to navigate through such a de-globalizing world, transnational structures are being established. Value creation and product development are increasingly shifting to growth markets, driven by the desire for shorter supply chains, attractive local conditions, and cost savings. 

Companies need to become faster in order not to lose ground

The speed of market launches and the development of corresponding purchasing, production, and sales structures should also increase, with a tendency towards "China Speed". The interviewed companies aim to become around 20 percent faster in the entire innovation cycle in order to further enhance their competitiveness. 

But how can they specifically proceed to remain successful in the increasingly complex structures and at the same time not lose their quality standards? 

Four success factors for growth in the de-globalized competition

From hundreds of personal interviews, four success factors have emerged for surviving in a digital, de-globalized and dynamic world market and mastering international cooperation: 

1. New organizational structure: It is not enough to simply open a new plant in Asia – optimal collaboration with the headquarters must also be ensured. This requires regional competence centers that operate autonomously and flexibly, serve specific market requirements, and at the same time comply with international standards. 

2. Adapted governance: Guidelines and processes that function efficiently both globally and locally are essential for the success of a decentralized approach, but should also leave scope for action for regional work cultures. 

3. Unified IT systems: The basis for efficient collaboration in newly formed global teams lies in unified IT systems and digital platforms. These enable international, digital, and efficient project coordination as well as seamless communication. 

4. People and competence development: The fourth and crucial factor is the ability to lead and involve employees through changes. It is worthwhile to invest in the further education of local executives and employees, as they know their region best and can act effectively.  

Global structures, local growth

Although industrial companies with their main location in Germany still invest around 60 percent of their capital expenditures in their own country, adjusted for size, this also means that a significant portion flows abroad and into growth investments there. The trend is therefore for companies to increasingly serve the markets directly from the regions with their own locations and to grow locally. This is both an opportunity and a challenge and requires that the organization is structured in such a way that the regions can operate more autonomously from the headquarters. 

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Horváth study

Successfully navigating through the shifting world

To the study

Sabine Schoon-Renné, Commerzbank divisional board member

"Quality and customer focus are crucial for our growth"

To the Interview