Ever since the dawn of global trade in the early 17th century, businesses with international ambitions have sought to overcome the challenges of gaining the efficiency of a single operating model, while ensuring relevance and success in local markets.
Despite today’s low-friction global economy, and the increasing adoption of international standards, understanding distinctions and preferences in local markets remain critical to the overall success of multi-national corporations (MNCs).
The same principle applies to businesses seeking to equip a global workforce with mobile communications. Despite being a relatively new sector – the world’s first commercially available mobile phone only reached the market in 1983 – mobile networks serve different needs in different countries and cultures. Local markets each have their own characteristics, driven by factors such as geography, regulation, population dispersion, and of course consumer demand.
This presents a challenge to MNCs. Do they seek to leverage their buying power by consolidating everything into one provider. Or do they instead simply allow each market to reach its own local arrangement.
By pursuing a ‘sole supplier’ contract the MNC may well secure exceptional commercial terms, yet find itself with inconsistent global coverage and a poor match between the needs in each region and the services provided under the master contract. By contrast, allowing each market to create its own solution could deliver a patchwork of contracts of differing lengths and terms, and without any cost advantages derived from the customer’s global scale.