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Tom Doctoroff

As MNCs retrench, reigniting the power of global brands

In an era of diminishing profits for global corporations, brands are not expenses. They are bulwarks against commoditization. Strategic investment is required.

New World Disorder

The Economist recently published a survey on the retreat of multinational companies (MNCs). More than a response to President Donald Trump’s protectionist browbeating, retrenchment is a result of structural headwinds including: local governments increasingly committed to enabling small business; supply chain decentralization; and instant global markets for small companies courtesy of the internet.

Not surprisingly, the financial performance of organizations that generate more than 30% of revenue outside their home country have regressed markedly; over the past five years, profit is down 25%. For forty percent of MNCs, return on investment (ROI) hovers around 10%, the danger zone of underperformance.

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