Pricing in International Markets

Abstract

For most firms the potential rewards of doing business in international markets are overwhelming. The most compelling reasons for entering the global marketplace are the sheer size of the marketplace and the limitless opportunities present. One of these opportunities is the leveraging of R&D investment. The global marketplace provides opportunities to obtain a full return on investment that is not possible if technology serves only the home market. Expanding internationally also provides the opportunity to improve products and processes by drawing on the resources of many companies and organizations in different parts of the world. Finally, global expansion allows a firm to remain competitive.¹

ABB (Asea Brown Boveri) is a company with no geographic centre, no national axe to grind. We are a federation of national companies with a global coordination centre. Are we a Swiss company? Our headquarters is in Zurich, but only 100 professionals work at headquarters and we will not increase that number. Are we a Swedish company? I’m the CEO, and I was born and educated in Sweden. But our headquarters is not in Sweden, and only two of the eight members of our board of directors are Swedes. Perhaps we are an American company. We report our financial results in US dollars, and English is ABB’s official language. We conduct all high-level meetings in English. My point is that ABB is none of these things — and all of these things. We are not homeless. We are a company of many homes.

(Percy Barnevik, in The Logic of Global Business: An Interview with Percy Barnevik’, Harvard Business Review (March–April, 1991) p. 92)