The whole world in our hands

Dairy Foods,  June, 1998  by Jerry Dryer

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The frantic pace of global change often blurs our view of the road ahead. But amid all the uncertainties, one thing seems clear: The world is becoming a smaller place.

Just look at the phenomena of the World Wide Web and global satellite communications. Suddenly the other side of the planet isn't so far away anymore. And as barriers fall, opportunities rise.

A freer flow of both global information and trade is helping us build relationships that not too long ago would have seemed hopelessly remote and inaccessible. As world markets continue to open up, the dairy industry will benefit by forging global alliances: working relationships between a supplier in one country and an end-user in another.

Global alliances go far beyond "I have this for sale. Will you buy it?" They involve a frequent exchange of product specifications, technical know-how, market intelligence and competitive intelligence. Global alliances let U.S. companies get inside foreign markets and take advantage of the opportunities they offer.

To understand the value of global alliances, consider this: About 96% of the world's population lives outside the United States. That's a lot of mouths to feed. People in developing nations have a growing appetite and, over the long term, more and more overseas markets will be looking for U.S. dairy products. Global alliances are one way to meet that demand.

A global alliance may be a formal joint venture, with a seller and buyer creating and jointly owning a third company. It may be a three- or four-way partnership, a chain between a U.S. manufacturer, a trading company, an importer, an overseas customer and an end user. Or it may be just a two-way flow of products, where a U.S. seller/exporter of dairy-based products also imports products from its overseas customer.

No matter which form they take, global alliances - like alliances many manufacturers have with domestic customers - offer limitless possibilities. Global alliances have helped U.S. whey manufacturers spawn numerous new products and applications worldwide, particularly in Japan and Mexico. They will help U.S. manufacturers and marketers of whey products enjoy vast opportunities throughout South America when the European Union's export subsidies dry up.

Despite setbacks like Mexico's financial crisis a few years ago and the current economic turmoil in Asia, over the long term more and more foreign markets will continue to emerge for a growing array of U.S. dairy products in ever-greater volumes.

Still, global alliances are not for everyone. Like any meaningful relationship, they require a big commitment of time and resources. You may need to relinquish some control to your overseas partner. They also present a risk that you'll rely too much on your new partner - or not enough. Nonetheless, for the sake of your future success, I urge you to consider building global alliances.

Long-term growth in overseas markets is expected to outpace U.S. market growth by at least five-to-one. In the rapidly expanding markets of the new millennium, global alliances will make a world of difference.

DRYER IS PRESIDENT OF THE JERRY DRYER GROUP, A FOOD CONSULTING AND FORCASTING COMPANY IN CHICAGO.

COPYRIGHT 1998 BNP Media
COPYRIGHT 2008 Gale, Cengage Learning