Tag Archives: diada telecomunicaciones

SMEs must not internationalise buying companies, they must do so going for their organic growth

Durante la intervención en la jornadaThe purchase of companies to implement in other markets provokes extra financial costs and a clash between organisations

I have had the opportunity to take part in the Catalonian Telecommunications Diada (National Day), organised each year by the Catalonian College of Technicians and Technical Telecommunications Engineers (COETTC), on a talk together with executives of Vueling, LetBonus, Fundosa and Plasticband, where we analyse the company growth method on a complex environment such as the current one.

The rest of the lecturers belonging to different sectors – Internet, aviation, industrial and services — it is outstanding that all of them coincided on the fact that one way to face the crisis is close management, controlling all details, to be able to introduce improvements in all circuits and to adjust costs as a result of the rationalisation and introduction of innovations in production. Quality is the key for a company to leave crisis and to start a growth stage.

Nowadays, internationalisation is a way of escaping for companies.

In Spain, many people believe that only companies from countries in crisis, such as the ones of the South of Europe, have headed for internationalisation, taking advantage of the improvement of competitiveness due to reduction of labour costs. Nothing could be further from the truth, in Germany, companies have launched into the tackling of Russian and Asian markets as a commitment to the future.

Internationalisation is not a cheap process, neither in time, nor in money, and results are not immediate. On the other hand, internationalisation by means of the purchase of companies is not always a success, especially for familiar SMEs. As for the internationalisation by the acquisition of companies, it is complex because it implies adding to the complexity of the process, a merging of different business cultures.

In acquisitions, on most occasions, staff of the acquired company falls into the binomial of discouragement and demand of labour and monetary improvements. Organic growth is much healthier and does not oblige to an extra financial effort by the purchasing company.

Thus, companies that internationalise must go for contracting local staff of the country in which they are implemented, but also staff from the countries with which they are going to have relationships; clients grow and their loyalty is encouraged if you talk to them on their same language. In order for a German, Spanish, Chinese company or company from any other country to triumph abroad, we must have the idea that it is a local company which is going out to the external market.