Companies that sell only in their home market still face international competitors, and Brazil's modest innovation ranking makes that risk real. Studying global markets does not mean selling abroad: it means gaining new perspectives, raising your competitive level and staying ahead of national rivals.
Faced with a scenario as competitive and full of uncertainties as today's, we must seek innovative ways to differentiate ourselves from competitors more than ever before.
This requires a solid understanding of competitor companies and how they serve your market. Most Brazilian businesses understand differentiation at the national level well. But what about in global markets?
It's easy to understand that when your company's commercial focus is on the Brazilian market, you don't worry about international competitors. However, have you considered how much we miss learning because of this?
This article shows we remain significantly behind the rest of the world in innovation and how analyzing what happens in other countries can develop our competitive potential.
The World's Largest Cities by Population
Although Tokyo is the world's most populous city with 37.393 million inhabitants, this number is changing. The city is stabilizing due to declining birth rates and population aging. Indian and Chinese cities, meanwhile, will continue growing rapidly until 2028.
By 2035, two new cities are expected to enter the rankings: Bangalore, India and Lahore, Pakistan will eliminate Tianjin and Buenos Aires. Additionally, Guangzhou, Shenzhen, and Chennai should meet megacity definitions by 2035.
With smart cities emerging, urban residents' quality of life will likely continue improving, and more large urban areas will become megacities.
Though mass urbanization has disadvantages, benefits include convenience, better jobs, greater service access, and other reasons people will likely continue choosing cities, even post-COVID.
The World's 10 Largest Economies in 2030
"Today's emerging markets are tomorrow's powers," according to Standard Chartered, a London-based multinational bank.
The bank sees developing economies like Indonesia, Turkey, Brazil, and Egypt climbing the ladder. By 2030, it estimates seven of the world's largest economies by GDP will be in emerging markets.
Analyzing Standard Chartered's list, Egypt shows notable growth during this period. The difference between projections is an impressive 583%.
This projection is quite ambitious, especially considering organizations like the IMF see Egypt averaging closer to 8% annual GDP growth in coming years.
Emerging Market Strategies
CEOs and senior management teams of large companies recognize globalization as the most critical challenge they face today. They're also aware it became harder in the last decade to identify internationalization strategies and choose which countries to do business with.
Successful companies develop strategies for doing business in emerging markets.
Brazil's Innovation Situation
Unfortunately, Brazil remains an underdeveloped country regarding innovation. According to the Global Innovation Index 2019 ranking, Brazil ranks 55th among 129 countries. It trails countries like Montenegro, Moldova, and Mongolia, and all BRICS nations.
This ranking evaluates factors including the country's business environment and knowledge and technology creation for the market.
With an uncompetitive national scenario, it's clear we have much to learn from other countries. Until we understand how to differentiate, we'll remain known as a country that exports commodities and offers cheap labor.
This affects not only our potential to gain international clients but also poses enormous risk for companies selling only in Brazil. International competitors' barriers to entering the Brazilian market are much lower today than years ago.
If you don't know who your international competitors are and don't prepare to compete at their level, you risk losing your domestic market position. This happened when Uber entered Brazil and nearly eliminated 99taxis.
Despite this, we still choose to "ignore" what happens in global markets because of beliefs rooted in our business culture.
Limiting Beliefs Related to Internationalization
We speak daily with entrepreneurs hearing varied reasons they don't look outward. Here are some common thoughts:
- Internationalization means selling to other countries: It's common to associate internationalization with seeking customers in international markets, which confuses it with the concept of export. Actually, internationalization is much broader: it's making something international. It's a learning cycle involving studies and company adaptations generating sufficient competitiveness to differentiate not just in new markets but also in Brazil.
- The Brazilian market is large enough: Brazil is a continental market with one of the world's largest GDPs. Because of this, Brazilian entrepreneurs feel no "obligation" to look outside. This differs from most European countries, where market size forces companies to position globally from day one.
- Inferiority complex: Brazilians still position ourselves as inferior compared to American and European companies. We think everything from outside is better, so we fear exploring other countries.
- Observing global markets is for the big players: We still imagine exploring international markets is more complex than reality, requiring massive investments. Certainly, exporting isn't extremely simple. However, technology advancement made it viable for companies of all sizes.
What Can We Learn From Global Markets?
After understanding that implementing this global perspective is not only possible but necessary, you might wonder: what must I understand and how can this help?
Gain New Perspectives on Your Market
Analyzing your segment's dynamics in another country generates insights for your company. When immersed in daily reality, we view our company with "the same eyes," limiting creative potential.
Exploring different international perspectives on your product or service brings simpler, more practical insights solving today's problems.
Be curious about how international competitors position themselves, deliver value, and differ from you. Also, research consumer behavior in other countries and leverage this knowledge within your company.
Elevate Your Competitive Potential
As mentioned, you're no longer competing only with companies in your city, state, or country. Though we don't look elsewhere, Brazil is highly coveted by worldwide companies.
Understanding and comparing yourself with stronger competitors, not just domestically but globally, is extremely important. This prepares you against these companies entering the Brazilian market and elevates your competitive potential, forcing you to improve, even beating domestic competitors.
Stay One Step Ahead of National Competitors
It's common in Brazil that we follow developed global market trends in various ways: product types we consume, service delivery modes, or internal process implementation.
Staying updated on trends and understanding if and how to apply them in Brazil provides immense differentiation versus competitors. Additionally, you avoid errors others already made.
Conclusion
More than ever, we must force ourselves to look outward and understand international markets. This doesn't necessarily mean selling abroad but understanding different perspectives and elevating competitive potential, beating any competitor, national or international.
To deepen the subject, check exclusive AAA Inovação Platform lessons from Rodrigo Olmedo, uGlobally CEO, on essential internationalization tips.
