Globalization and Standardization -- A View from the Trenches

In a previous post, I discussed the evolution of Ted Levitt's seminal formulation of the globalization paradigm which posited that a necessary attribute of a successful global company was its ability to push standardization across borders.   In that post I suggested that the changes brought about by the internet may have changed the rules of the game in a number of respects such that, at least for smaller companies, the game went to the quick and flexible, not necessarily to the companies large enough to enforce their manufacturing standards on consumers.   It seems that the new paradigm applies to large old line manufacturing companies as well.

I had the opportunity to attend a luncheon today (actually the annual membership meeting for the World Trade Center Ass'n Denver) which featured keynote remarks by Richard Bell, President of the Gates Corporation.  For those not familiar with Gates, they make drive belts and hydraulic equipment largely focused on the automotive industry, and describe themselves as the largest non-tire rubber manufacturer in the world.   The company operates 49 plants across the globe and supplies customers around the world with the product.

In describing Gates's approach to international markets, Mr. Bell expounded upon both the need to be flexible, and the advantages of complying with that need.  Among Gates's products is something so seemingly mundane as a "27 inch V-Belt".   Bell explained that Gates actually makes at least 6 distinct variations of this product, each geared to the unique demands of particular regional markets -- and pointed out that none of the 6 are in fact 27 inches.

He attributed the need to be flexible in part to the inability to control global standards.  Far from bemoaning that fact, however, Bell went on to explain that their ability to respond to local requirements and preferences in a global fashion in fact produced a competitive advantage.  As Bell sees it, the multiple platforms gives Gates a more complex business model for potential competitors to replicate, as opposed to presenting a single target for a would-be competitor to hit. 

If a company such as Gates which is the leader in its industry can't hope to control global standards in this on-demand consumer driven marketplace, then I suspect very few companies can. 

[Note of attribution: The "Against International Standards" sign is in fact a work of art by Stefan Bruggemann (white neon on plexiglass) viewable at i-20.com.]