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Monetizing Internal Capabilities: Find New Growth by Looking at What You’re Good at, Not Just What You’re Known For

25 Feb

“Add new features. Sell more. Increase marketing spend. BE MORE INNOVATIVE.” These are just a few of the myriad ingredients in the pantry of company executives charged with the daunting task of cooking up revenue and profit growth on a consistent basis. In a world where competition is increasingly attacking from all angles – crowdfunded Kickstarter campaigns, agile startups and international firms, in addition to your traditional competitors – identifying new growth opportunities is not as easy as many shareholders would prefer it to be.

A handful of firms such as Apple, P&G and Amazon will grab headlines and spurn management professors into churning out book after book on how to be innovative and create disruptive products and services that “wow” consumers. Sure, these companies are great and serve as models of excellence when it comes to innovation, but we’ve been increasingly intrigued by companies that have found new growth opportunities not through innovating the products and services they’re known for, but instead by commercializing what they’re good at – their internal capabilities.

From R&D and supply chain logistics, to organization-wide functions like IT and HR, we have found examples of companies that have created new services through marketing their internal capabilities to external customers. Capabilities are the business processes, supporting systems and technologies that make your business to run. Capabilities enable the products and services conceived and developed by your organization to hit the shelves in the market. Historically, these capabilities have been nurtured so that firms may gain a leg up on the competition, but increasingly we are finding examples of organizations that are turning proprietary capabilities into new businesses in an effort to diversify revenue streams, add value to their customers, and expand their customer base by entering new industries.

Let’s examine a few case studies of firms that have created entirely new service offerings by marketing their proprietary capabilities.

Disney

Creativity, teamwork and innovation have long been the hallmarks of the culture at Disney, a company that has built a reputation of delivering entertaining, family-friendly customer experiences over the past eight decades. The culture at Disney became especially relevant to the business community after appearing in the celebrated book In Search of Excellence, which profiled the world’s most successful companies and identified the themes that led to their success. Disney’s success, the book argued, was driven by the firm’s culture. “How do they do it?” executives around the country soon asked. Disney answered.

The Disney Institute formed in 1986 as a vehicle for individuals, teams and entire organizations to learn the customer-centric methods that have made Disney so successful. Part management consulting firm and part executive education program, the Disney Institute has been retained by school systems, hospitals, foreign governments, Fortune 500 companies and small-scale entrepreneurs to teach leadership, customer experience, brand loyalty and training.

Fees from the Institute’s services range from under $1,000 per person for a one-day workshop to hundreds of thousands of dollars for extended consulting engagements. Net revenues from the service are negligible to Disney’s bottom line – the company had $42.3 billion in revenue in 2012 – but it has no doubt exposed Disney to a host of potential future business partners and given it perspective on a range of new industries.

Bellin Health

In 2002, Green Bay-based integrated healthcare delivery system Bellin Health confronted a startling fact: healthcare costs for its own employees were projected to increase 30% to $13 million, in just one year. This unsustainable trajectory of rising overhead led Bellin to develop strategies to improve the health of its employees, rather than just treating health concerns. The organization looked at the various factors influencing the health of its workforce, and ultimately designed a system that saved Bellin $15 million over the following nine years.

Local organizations took notice of Bellin’s success and approached it in order to learn how to rein in their own rising healthcare costs; Bellin’s Business Health Solutions business was born. Bellin was able to parlay its internal cost savings initiative into a service that has allowed organizations such as the Northeast Wisconsin Technical College and the Foth Companies to save $500,000 and $250,000, respectively, in their organizations’ healthcare costs. Read the rest of this entry»

Custom Experience Design: Lessons from Startups

28 Nov

From traditional management consultancies to boutique design firms, everyone seems to acknowledge the role customer experience plays as a point of differentiation in today’s increasingly competitive landscape. For the most part, thought leaders agree that customer experience management requires leadership alignment in order to foster a consumer-centric organization, as well as tools and processes to continuously measure and refine the customer experience. However, the key element that seems to be missing in today’s literature around this topic is how to actually design the customer experience.

So, how does one actually go about designing a compelling customer experience that builds a loyal fan base, provides a layer of differentiation and drives revenue growth? Ask a startup founder.

Identifying pain points in the customer journey

Interview just about any successful startup founder or CEO, and more often than not you will hear some variation on the following sentiment: “I was frustrated with the current offerings, and realized there had to be a better way.”

Trunk Club CEO Brian Spaly articulates his startup’s reaction to the shopping experience for men’s clothing: “The big challenge for most guys today is the overwhelming amount of choice on the internet and the unattractive environment of the retail store. We solve that problem by sending an edited, personalized assortment.”

For Dwolla founder Ben Mine, the customer experience of dealing with merchant interchange fees needed revamping: “I got really obsessed with interchange fees and how not to pay them.  Every time a merchant gets paid with a credit card they have to give up a percentage.  In my case, I was losing $55,000 a year to credit card companies.  I felt like they were stealing from me — I was getting paid and somebody was taking money out of my pocket. So I thought, how do I get paid through a website without paying credit card fees?”

In these cases – as well as myriad others in the startup world – a pain point in a customer experience led to a flash of insight, around which a business was designed to circumvent the pain point.

Defining the target customer segment

When identifying opportunities for improvement in a customer experience, regardless of the industry, you cannot forget about one crucial variable: the customer. One only has to look at the headlines for retailer JC Penney to see what happens when you ignore your core customer when designing the “ideal experience”.

After retail star Ron Johnson was brought onboard as CEO, he tried to revamp the storied brand of the struggling retailer and reinvent the customer experience. The problem, however, is that Johnson designed the new “ideal experience” for a higher-end, upper-middle class customer rather than for the value-seeking customers that had been loyal JC Penney shoppers for years. Johnson’s attempt to apply his magic from Target and Apple – retail experiences he previously designed – to  JC Penney illustrate the extent to which you must design the customer experience around your most important customer segments, or risk alienating those that delivered your success in the first place!

Again, startups provide a valuable learning experience in this regard. Men’s retailers Bonobos and Trunk Club offer experiences for fashion-conscious, time-starved men, while Daimler’s car2go is designed for on-the-go urban dwellers. These companies have thrived because their services solve the problems of a specific customer, instead of trying to be everything to everyone.

Redesigning Your Customer Experience

Who are your customers, and what does their customer experience look like today? As the startups previously discussed illustrate, customer experience design is not interchangeable with customer service improvement; instead, analyzing the customer experience can lead to insights that drive completely new services and businesses. If you want to drive loyalty and create a differentiated experience, borrow a page from the startups’ playbook and turn a pain point into a point of differentiation.

Don’t Let Shareholders Hold Innovation Hostage

31 May

The markets and regulatory agencies governing publicly traded companies should borrow a page from the NFL’s playbook and purposefully manage the division between the real and expectations market, argues Roger Martin in his latest book Fixing the Game. In the (slowly) retreating shadows of the recent financial crisis, Martin rails against modern day American capitalism, arguing that CEOs need to address consumer needs instead of focusing on maximizing shareholder value.

Through the lens of agency theory, Martin discusses the pitfalls of tying managers’ incentives to the expectations market (stock market) instead of the real market (operations, cash flow, products and services, real customers). His running analogy compares the idea of shareholder value maximization to the way in which the NFL is proactively managed in order to ensure that the fans’ experience is maximized; for example, players and coaches are forbidden from gambling on football, which could influence their on-field performance, and salary caps ensure a more equitable distribution of capital, theoretically leveling the playing field for all teams. The analogy falls apart at times, but the general point rings true: companies should not be held hostage by their shareholders.

Martin’s criticisms of capitalism’s emphasis on the expectations market at times blur the lines between policy and management recommendations and a moral diatribe. He essentially argues that hedge funds have no societal value, where as venture capital and private equity firms play a prominent role in facilitating the creation of jobs and game-changing innovations.

Nevertheless, I agree with his central tenet that if businesses successfully address the needs of customers, shareholders will subsequently benefit; however, if the focus is exclusively on the shareholder, customers don’t benefit. Even former champion of shareholder maximization, Jack Welch, admitted that an expectations market-centric view of management is flawed: “On the face of it, shareholder value is the dumbest idea in the world,” he said in a 2009 Financial Times interview.

Focusing on the demands of external shareholders instead of meeting consumer needs stifles innovation and threatens long-term gains at the expense of short-term gains. Shareholders are not interested in well-designed products, services and customer experiences; instead, they analyze businesses through quantifiable financial metrics such as cash flow and profit margins.

Especially in today’s context of explosive startups and a wave of tech-driven IPOs, we must be cognizant of the fact that entrepreneurs are driven to build game-changing products and services above all else. The Mark Zuckerbergs of the world don’t need the fund manager of California’s pension system telling them how to run their business, after all.

Martin believes the shift of focus from shareholders to customers is inevitable, because, ironically, this way of thinking makes more money (as Steve Jobs proved at notoriously investor-averse Apple). Fixing the Game is a refreshing read, at least for all of its sports references, and hits upon themes that will no doubt take center stage in this year’s presidential election. Martin has my vote.

 

 

“Retail Experience” Innovations at LivingSocial

15 Feb

On Monday, LivingSocial announced the grand opening of a “first-of-its-kind live events venue” in downtown Washington D.C., where the rapidly growing daily deals business will offer customers unique experiences to its customers, and a testing ground for its merchant partners.  The “retail experience” space is an innovative move for the company, who is looking to expand its image beyond that of a “coupon company.”

   (image courtesy of Washington Post)

The company’s new venture is notable for many reasons, and I am particularly anxious to see how it pans out, as I’ve long been bullish on the daily deals business model and do not think it is sustainable in its own right.

Even though the company has expanded its user base to more than 60 million members, and offers deals in 647 markets worldwide, LivingSocial and its closest competitor Groupon have yet to turn significant, sustainable profits; figures from Amazon’s 10-K report imply that DC-based LivingSocial suffered a net loss of $558 million in 2011, on revenues of $245 million (Amazon has a 31% stake in the company). Those 60+ million consumers are proving to be very expensive to acquire as repeat customers.

Is a retail experience venue like that of LivingSocial a one-off innovative initiative, or a game-changing model?

Most of the criticisms charged against daily deals businesses have been around the lack of long-term gains conferred to their merchant partners. Mom and pop shops often find it challenging to keep up with the demand created by a one-off deal, and they receive only a fraction of the proceeds from those deals (usually 25% or less of the face value of the goods and services the coupon offers). Additionally, cost-conscious consumers have little reason to be loyal to one daily discounter over another; as long as they can get half-off pedicures and sushi rolls, it doesn’t matter what company sells them the voucher.

What is interesting about the retail experience, however, is that it allows merchant vendors to more proactively manage their expenses and the customer experience. Rather than providing consumers access to a brand at a discount, the retail experience space gives brands access to consumers (albeit still at a discount, for the most part).  This subtle distinction, where vendors have more control over the customer experience, means that local companies are better positioned to lock patrons in as loyal customers. Who do you think will revisit a restaurant more often – a consumer who buys a 50% discounted meal, or one who pays to experience a new tasting menu with a restaurant’s chef?

LivingSocial’s press announcement for the retail experience space at 918 F Street didn’t explicitly state whether the new venture would be repeated throughout the hundreds of other markets where the company is present, but one can imagine that if the model proves successful, they will roll it out company-wide – that is, if LivingSocial’s competitors don’t copy it first.

White Space Opportunities around Digital Textbooks

20 Jan

“Get NOOK Free!” reads the banner ad on the New York Times’ website. Barnes & Noble, creator of the NOOK e-reader, has partnered with the New York Times to give away its NOOK Simple Touch with a 1-year online subscription to the NYT. Why would Barnes & Noble give away a product that is already heavily discounted at $99? Simple: e-readers are not profitable products, they’re valuable service platforms.

As we’ve recently reported in Fast Company, incorporating services into traditionally product-centric “design, manufacture, market” models–or replacing the product entirely with services–allows companies to create value for their customers as well as their shareholders. In the instance of media, we’re seeing that by replacing physical products (books, CDs, DVDs) with digital equivalents, companies that create service platforms accessible via consumer electronics are able to capture revenues previously owned by retailers and publishers.

The closing of Borders and the declining sales at Barnes & Noble stores indicate that the digitzation of media isn’t a trend, but instead a shift towards a new model in which traditionally tech-centric firms (Apple) have entered the media business, and retailers (B&N) have entered the tech business.

Apple’s announcement on Wednesday that it would take on the $10 billion textbook market by turning its iTunes U app into a platform for digital textbooks further signals the attractiveness of the white space opportunities available around digital service platforms. In addition to low price points ($14.99 for textbooks), Apple plans to launch a self-publishing tool called iAuthor. E-textbooks are a palatable proposition for consumers – not only are they less expensive, but they’re also more portable, interactive and easily integrated with other products and software – and to those who sell them.

Digital textbooks are attractive to Apple, and its competitors who plan to enter the market, because of the revenue streams and unique business models that can be created around them. One can easily imagine that the $14.99 textbook sold on iTunes U could be supplemented with additional question banks, content updates, study guides and videos – high-margin add-ons that would no doubt add millions to Apple’s coffers. It will be interesting to see how these companies develop innovative partnerships with both schools and content providers, and how the role of the physical product used to access digital content will evolve.

Do you think we’ll see Apple pull a NOOK-like move, and give away iPads to university students in the near future? It does seem far-fetched, but there is no doubt that as price points for the increasingly commoditized products fall, the market will turn to the pasture where the new cash cow grazes: digital service platforms.

Startup Spotlight: ShopSavvy and iftt

28 Dec

Greetings readers, and welcome to a new monthly blog series where I will discuss all things ‘startup’ – from venture capital resources to analyses of innovative companies that I think are truly disrupting their industries, or creating entirely new ones.

I wanted to start by introducing two companies that I recently discovered, both of which leverage technology to simplify consumers’ lives and literally “put the internet to work for you”: ShopSavvy and ifttt.

ShopSavvy

ShopSavvy, a free smartphone application introduced in September 2008 by Dallas-based idea factory Big in Japan, allows users to do comparative shopping on the go. The application, which is available on Android, Windows Mobile and Apple’s iOS systems, uses smartphones’ cameras, the internet, and geolocation services to identify products and inform shoppers where they can find those products online or locally. The app can read traditional barcodes as well as QR codes, and has a slew of features that allow users to add photos and prices, post reviews, share products via various channels, stream deals aggregated from the web and other ShopSavvy users, and check the availability of products at local retailers.

After using the application for a few weeks, I have been amazed by its potential to change the way consumers shop and its broader impact on B2C product-centric business models.  Especially during such times of economic uncertainty, consumers are increasingly arming themselves with information to make smarter purchasing decisions, and ShopSavvy provides a clearly defined benefit in the form of immediate savings. For merchants, however, the application is more of a direct affront to profit margins, as they must become more aware of and responsive to competitors’ pricing schemes – a challenge that is especially daunting to smaller, less flexible retailers who cannot purchase on the scale of larger, big-box competitors. Continue Reading»

If This, Then That (iftt.com)

It seems that every week we are inundated with a new app, social network, or some other innovation served up through digital channels, but after awhile, managing all of these elements becomes almost a second job. Surely there’s a way to consolidate our tech lives, and make our online worlds more proactive, right? Enter ifttt.com. ifttt (pronounced like ‘sift’, minus the ‘s’) “puts the internet to work for you” by triggering actions when users define and implement conditional “recipes” across various channels. In November, ifttt announced a partnership with Buffer, a social media scheduling application that will expand the scope of potential recipes that users can create.

For example, you can create a recipe in which you receive a text message anytime that the forecast calls for rain, or one where favorite tweets are automatically saved to your Evernote account.  Currently, the most popular ifttt recipe is one in which every time you are tagged in a Facebook photo, the image is automatically saved in a Dropbox folder.

I have long been intrigued by the broader shift from content and product aggregation, to more proactive recommendation-based models, and If This, Then That certainly takes a leap in that direction. After a 9-month beta test that began in December 2010 and included over 100,000 tasks that triggered more than 25 million “actions”, ifttt is now open to all users.

King of Capital: Innovation Lessons from the PE World

20 Dec

In King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone, authors David Carey and John E. Morris discuss the history of the storied private equity firm and discuss what factors have enabled the company to grow from a two-man shop to an international, publicly-traded financial powerhouse. The authors address some of the most significant charges that have been trotted out against private equity and leveraged buyouts – namely the “buy it, strip it, flip it” mentality that many argue leads to job-cutting and cost-slashing, which result in weaker companies that are less likely to survive the mountains of debt accumulated during the takeover – and ultimately defend the practice, citing market data and academic research.

King of Capital is mostly a corporate biography, with a significant emphasis on the Chairman, CEO and co-founder Stephen Schwarzman, who has often been pilloried in the media for representing the excesses associated with the mountains of wealth created in the private equity business. Carey and Morris brilliantly lay out the development of the firm through an exploration of its deals – both the successful and the utterly dismal investments – and its investment team. It was particularly interesting to read about the deals by Blackstone and its competitors within a broader economic context; for example, telecommunications deals that occurred during the heady days of the internet boom were discussed, as were real estate investments that occurred during the run up to the 2007-2009 financial crisis.

The book was both entertaining and educational, as the authors took pains to delve into various financial tools and functions, debating the relative merits of stock buybacks, recapitalizations, vulture investing, etc. What I wasn’t expecting from the book, however, were valuable insights regarding innovation. As it turns out, co-founders Schwarzman and Peter Peterson weren’t just savvy investors – they were innovative entrepreneurs as well.

Here are a few key takeaways around building a successful business from Blackstone, a firm that has grown its assets under management to $157.7 billion, invested in 159 separate transactions in a wide range of industries and geographies with a transaction value of over $300 billion since 1987 by maintaining a disciplined, risk-averse investment philosophy:

Maintain flexibility in your business model. Blackstone co-founders knew they wanted to jump into the world of leveraged buyouts, but they began operations by providing M&A advice, as it was a business with high-margins, little overhead and low fixed capital costs. As Blackstone’s assets under management grew, it expanded its offerings into private equity, real estate investments, and hedge fund solutions, among others.

Attract like-minded entrepreneurial types, and award them with generous stakes in the venture. As Blackstone evolved and expanded the scope of its offerings, co-founders Schwarzman and Peterson lured the most talented investors away from established firms such as Credit Suisse and Goldman Sachs by offering partial ownership of the firm.

Do what’s best for the firm, not the individual. From the beginning, proposed deals at Blackstone were vetted among the entire partnership, often many times. Partners would poke holes in the investment argument – this promoted risk-averse, well thought out investment decisions rather than people lobbying Schwarzaman to see their deals get through.

Stick to the business that you’re best at. During the internet boom when Blackstone remained on the sidelines while its competitors and other investors were making millions of dollars seemingly overnight, Schwarzman was wise to insist that “this is not what we do well,” a position that saved the firm billions when the bubble burst.

Acknowledge when additional help is required. Schwarzman realized that he was becoming a bottleneck to investment decisions, and that further growth would only occur if he relinquished much of the day-to-day management of the firm. Blackstone looked externally, and brought on Tony James as the president and COO.

Fab Labs – Democratizing Manufacturing

15 Dec

While traveling through the states of Sao Paulo and Rio de Janeiro in Brazil last week, I often found myself dwelling on the challenges and intricacies of the supply chains of various goods and services in both the densely populated cities and the sparse, remote areas that I visited. As far as emerging markets are concerned, Brazil is one of the most developed, but its infrastructure—though rapidly developing—and its trade policies dictate that goods are often priced at a premium to their perceived fair market value. For years, multinationals have struggled with the challenges confronting distribution in markets such as Brazil, but what about the local entrepreneurs and manufacturers?

I spent two days on Ilha Grande, an island paradise a few kilometers away from the mainland, 45 minutes by high-speed water taxi. Everything anyone could need – tourists and locals alike – had to be brought in by boat. I watched from the pier as crates of food, souvenirs and various widgets were hauled in by hand, one load at a time. Not only are these goods more expensive because of the high costs incurred in transporting them to an island – as Manhattanites can testify – but they also dictate a larger environmental footprint.

“Downtown” Ilha Grande

I was reminded of a recent talk at Digital Capital Week where RTKL architect Kashuo Bennett discussed the concept of “fab labs”, small-scale fabrication laboratories that democratize manufacturing by providing local innovators with access to digital fabrication technology and rapid prototyping.  Fab Labs, which originated in MIT’s Center for Bits and Atoms, have opened in dozens of countries around the world, and their potential applications in developing countries and remote regions are particularly interesting. Instead of paying significant premiums to move goods around the world to places such as Ilha Grande, perhaps local entrepreneurs could harness local Fab Labs to design, develop, and manufacture products.

The application of Fab Labs in developing countries and elsewhere holds numerous benefits, as well as significant challenges that cannot be ignored. Firstly, fab labs allow local entrepreneurs to stimulate the local economy. When goods from large multinationals are sold in a given market, that money flows back to the corporations, rather than staying in the local economy; however, if products are designed, manufactured and marketed locally, the economic benefit created stays in that market. Additionally, one can argue the sustainability aspect of manufacturing locally, as well as the benefits of educating, training and hiring local workers needed to manufacture Fab Lab products.

Granted, it is a pipe dream to think that any community could just give up trade and manufacture everything locally – particularly given the various resources and inputs needed to manufacture anything designed in a Fab Lab in the first place – but it does seem that there is significant momentum behind such movements, and myriad markets in which the application of such “local” elements could produce innovative solutions.

Google 3D Driving Directions Makes Trip Planning More Fun

26 Oct

Bem-vindo à Ipanema!

Ever since the first Model T rolled off Henry Ford’s assembly line, we have been driving around this earth of ours town wondering, “Am I lost? Which way do I go? I could’ve sworn that right turn was coming up…” Travel maps sure did help, as did the local gas station attendant, but now there is a navigation tool available that – in addition to suggesting efficient routes and providing step-by-step directions – allows you to not only determine your course of attack, but also preview the drive in an engaging, movie-like experience.

A few weeks ago, Google released a revolutionary mapping service that takes driving directions into the 3rd dimension. With the Google Earth plug-in, you can get a bird’s eye perspective of your proposed route.  Google’s 3D driving directions leverage data and images from a variety of sources to build real-time videos tracking your proposed route. The video can be paused at any point, so you can stop and explore the local landscape or familiarize yourself with an area from different angles.

I personally discovered this feature, released on September 30, while planning a vacation to Brazil. I used the tool to discover interesting towns and beaches on the drive between Sao Paulo and Rio de Janeiro, and was amazed at the extent to which every detail – from downtown skyscrapers to offshore coral reefs – were highlighted along the way.

Will Google’s new 3D driving directions guarantee that you’ll never be lost again? Probably not, but it will definitely provide an entertaining, post-recession alternative to the family vacation. Can’t make it out to California for that epic cruise down the Pacific Coast Highway? Here, let me help:http://motv.st/pCbDzK

BRIC’s and Beer

20 Oct

As Germany’s infamous Oktoberfest winds down to a close, I find it appropriate to reflect on one of my favorite subjects: beer. After water and tea, beer is the third most popular beverage in the world, and one of the oldest prepared beverages – evidence of beer brewing, accidental or not, pre-dates written history by millennia. I find it particularly interesting to think about the challenges modern brewers face in marketing and distributing beer in such a competitive market, especially in some of the world’s largest populations and economies: the BRICs.   

A recent Businessweek article profiled the push by Budweiser, Anheuser-Busch InBev’s flagship brand, into Brazil. Interestingly enough, Brazil is the birthplace of the majority of the parent company’s board, and is the world’s fourth largest beer market by volume.  The annual per capita consumption of beer in South America’s largest country was 47.6 liters, according to Japanese brewer and holding company Kirin; seeing as how per capita consumption for the top 20 most fervent beer drinking markets is at least 59.6 liters, Budweiser and its competitors must be licking their chops at the opportunity to convert more Brasileiros from drinking caipirinhas to drinking cervejas.

In Russia, unsurprisingly, beer takes second place to vodka as the most popular alcoholic drink, and many consumers view beer not as an alcoholic beverage, but rather as a soft drink. Still, Russians consume on average 58.9 liters per capita.  Presently, the market is dominated by domestic brewer Baltika(now owned by Carlsberg), while AB-InBev’s Budweiser controls just 0.5% of the market. Though thirsty Russians may prefer vodka to beer, they still consume enough to make it the world’s third largest beer market, according to Kirin.

The Indian beer market dates back to the early days of the British Empire, when porters and the appropriately named India Pale Ales were exported to the subcontinent. According to the Institute of Alcohol Studies, the number of Indians consuming alcohol has increased from 1 in 300 to 1 in 20; even though alcohol consumption has grown rapidly, as marketers increase their efforts, beer accounts for only 10% of all alcohol consumed. What is the most popular beer in India? Kingfisher – roughly 1 out of every 3 bottles of beer sold in India is this lager, brewed by Bangalore-based United Breweries Group.

China, the world’s largest country by population, is unsurprisingly one of the fastest growing markets for beer in the world. China is already the world’s largest beer market by volume, yet per capita consumption – 22.1 liters – doesn’t even warrant the country a place in Kirin’s ranking of 35 beer-drinking countries.  As Madison Avenue advertisers and their international brethren refine their offerings for the Chinese market, one can imagine that it will only be a matter of time before the Chinese catch up to Western beer drinkers. Will foreign breweries be able to successfully infiltrate the notoriously difficult to navigate economy of China?  Yes, but not organically; CR Snow, a joint venture between SABMiller and China Resources, brews Snow, which eclipsed the domestic beer Tsingtao as the market leader for the first time in 2006.

Tastes vary among cultures and country to country, but there is no denying the investments that the world’s largest breweries are making to court those in the largest developing countries. The American image abroad hasn’t exactly been spotless in recent years, but what about American brands? According to Chris Buggraeve, AB InBev’s Chief Marketing Officer, American values resonate globally, even if American politics don’t. “It [Budweiser] doesn’t stand for America. It stands for deep American values that are extremely relevant worldwide,” he says. Cheers to that.