Global business: comparing and contrasting economies

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90 min
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1

Think about these questions before watching. Share your ideas with a partner.

  1. When you think of a 'global brand', which companies first come to mind and from what countries? What factors do you think make a company a household name worldwide?
  2. Consider the most dominant companies in your own country. Are they primarily in technology, manufacturing, finance, or another sector? What might this suggest about your country's economic strengths?
  3. Some argue that for a country to be a global economic leader, it must have a world-class technology industry. To what extent do you agree with this perspective?
2

Watch the video from 2:45 to 5:20. Pay attention to the main ideas, key vocabulary, and examples in this section.

▶ You only need to watch 2:45–5:20. The exercises focus on this part.
Video script199 segments · click a timestamp to jump

this video was brought to you by

brilliant when Consulting the list of

the world's biggest companies you're

faced with a pretty Stark reality that's

because eight of the top 10 companies

are American one is Saudi Arabian and

one is Taiwanese but none of them are

European in fact even if you extend this

list right out the top 50 you'll only

find nine European businesses Novo

Nordisk lvmh asml Nestle Laur

Ms astroica shell and sap compared to

America's 30 in the top 50 now

unsurprisingly then the top 10 European

businesses are worth far less than the

top 10 in the US so what's going on

America is admittedly a big and powerful

country but Europe is just as big and

historically at least has loads of power

so why is America winning with its

so-called magnificent 7 while Europe is

somewhat

languishing when it comes to the biggest

US companies people always talk about

the Magnificent Seven stocks that's

Microsoft Apple Nvidia alphabet Amazon

meta and Tesla now they're not

technically America's biggest seven

companies anymore with Tesla taking a

bit of a dip recently as we explained in

another video Linked In the description

but they're certainly all huge Tech

Giants based out of the US with a

combined market cap of nearly $14

trillion now their European equivalent

is what Goldman Sachs dubbed the

granolas in 2020 these companies are GSK

Ro acml Nestle neatus Novo Nordisk

L'Oreal lbmh astroica sap and sopi now

I'm not going to get into how much it

pisses me off that the letter N is used

three times in This Acronym but there

are a couple of notable differences here

firstly the Magnificent 7 have a

combined market cap of nearly $4

trillion the granolas well there's is

just shter three trillion and there's 11

of them sure they're big still

everyone's heard of L'Oreal and nesle

but their scale is vastly different the

other major difference is the industries

that play here of the top American

stocks the majority of tech companies in

one form or another while in Europe

there's only two asml develop and

manufacture a photolithography machines

that are then used to produce computer

chips and sap who produce enterprise

software in Europe the majority of the

companies are actually Healthcare and

farmal brands with the biggest company

in Europe being a zic developer Novo

Nordisk there's also a couple of fmcg

companies that's fast moving consumer

goods and there's also lvmh the owner of

luxury brands includ including Louis

Vuitton Mo henness Dior Sephora tag Hoya

and Bulgari now clearly then unlike the

US Europe doesn't have massively

dominant tech companies so why is that

why does Europe lack big tech companies

and why is Europe generally bereft of

these kinds of big companies well one

obvious explanation is the language

barrier put simply any business's

service or product that you're trying to

sell in Europe needs to be translated

into the langu anguage of each country

which takes time money and resources

that only large businesses can afford on

top of that businesses also have to

allocate resources to adapting to each

of Europe's distinct markets and their

various legal regulations which just

isn't a problem if you're a big company

only operating in America the second big

reason is Market competition well the US

is one enormous homogeneous Market

Europe is made up of 27 different

countries with different languages

cultures and customers so if you want to

sell a product as widely as possible

that's easy in America where you've got

300 million potential customers

immediately at your disposal but that

same product won't necessarily sell as

well in France as it might in Germany

take the example of tech businesses like

Facebook or WeChat in the US and China

you've got hundreds of billions of

potential users who use your product in

very similar ways across the entire

Market but if you create the perfect

social media product for Dutch people

that's not necessarily going to sell in

Spain so as a business you can't

necessarily scale up anywhere near to

the levels you can in the US even if

Europe has a relatively similar

population on the whole what complicates

things even further is the absolute

dominance of us companies even if you

can create a banging product like Skype

for example an American Behemoth like

Microsoft can just step in and buy it

for an obscene amount of money and then

you European product becomes a us one

similarly when eBay first tried to get a

foothold in the Netherlands it struggled

because the existing Niche was being

filled by market plats.net

do well it simply bought the site and

folded it into the eBay Empire albeit

under its original name but that's not

all our final point is the broader

Financial environment in Europe venture

capital is generally seen as more risk

averse in Europe compared to the US

which can make it tricky for startups to

get financial backing by contrast the US

is often thought of as having a more

entrepreneurial culture where you bet

big and you win big if it pays off

there's also more regulation in Europe

which includes things like workers

rights and salaries which creates a lot

more Hoops for businesses to jump

through ultimately there's very little

businesses can do in Europe to change

the environment they're working in they

can't make everyone speak the same

language they can't suddenly generate

billions of euros frows in seed funding

out of thin air and they certainly can't

stop the absolute Rockets of huge

American companies but one thing the EU

itself is trying to do though is hold

back the power of the six gatekeeper

companies in big Tech that's alphabet

Amazon Apple bite dance meta and

Microsoft in order to increase the

competition in the eu's digital markets

in fact the digital markets act or dma

has recently come into force and it's

designed to do exactly that by setting

new obligations for big Tech firms to

give more space for emerging companies

however it's too soon to tell whether

this will actually work or whether it'll

end up just stifling growth for European

companies even more ultimately

underpinning this topic is a lot of data

whether that's economics trade patterns

polling or demographics a lot of the

time with politics you just have to

understand the data so if you want to

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3

Answer these questions in your own words. Support your answers with evidence from the video.

01According to the video, what are the initial challenges a business faces when trying to expand across Europe?
Sample answerThey have to translate their products or services for each country, which costs a lot of time and money. They also have to adapt to different legal regulations and distinct markets, which isn't a problem if you're only operating in America.
02In what way does the video describe the US market as being more advantageous for a new business compared to the European market?
Sample answerThe video says the US is one large, homogeneous market, giving a business immediate access to 300 million potential customers. In contrast, Europe is made up of many different markets with different cultures and languages.
03The video uses the example of a social media app for Dutch people. Why would it be difficult for such an app to scale up and become as large as an American tech company?
Sample answerBecause it's designed for a specific culture and language. What works for Dutch people might not appeal to people in Spain or Germany. This makes it hard to grow across the whole continent, unlike in the US where a single product can reach a huge, more uniform audience.
04What does the video suggest can happen to a successful European tech company when it starts to compete with a major American one?
Sample answerThe video explains that the American company, which is often much bigger, can simply buy the European company. It gives the examples of Microsoft buying Skype and eBay buying a Dutch website, which means the European product becomes part of a US company.
4

Vocabulary

Vocabulary
These expressions will help you communicate more naturally about this topic.
Examples
To gain a foothold in the market — to establish a secure, initial position in a new business or market area.
Usage note: This is a common business collocation. It's often used when discussing the challenges of entering a competitive market. You can also say 'establish a foothold' or 'secure a foothold'.
A one-size-fits-all approach — a single solution or strategy that is applied to all situations, often inappropriately.
Usage note: This phrase is typically used to criticize a strategy that ignores local differences. The video argues a one-size-fits-all approach that works in the US fails in Europe.
To tap into a new market — to access and start taking advantage of a new group of potential customers or a new sales area.
Usage note: This is a dynamic phrasal verb suggesting proactive expansion. For example, 'The company developed a new app to tap into the youth market'.
To navigate the regulatory landscape — to successfully deal with a country's or region's complex system of laws and official rules.
Usage note: This is a semi-formal phrase that emphasizes the difficulty of complying with regulations. 'Navigating the landscape' is a common metaphor for managing complex systems.
A level playing field — a situation of fair competition, where no single company or person has an unfair advantage.
Usage note: This is a common idiom in business and politics. People often talk about the need to 'create' or 'ensure' a level playing field for all competitors.
5

Decide if each statement is true or false. Correct the false ones.

01The video describes the American market as being large and relatively uniform.
02According to the video, businesses in Europe only need to translate their products and don't have to worry about different legal systems.
03The video mentions that Microsoft, an American company, acquired the European tech product Skype.
04The video argues that the need to adapt products for numerous languages and cultures in Europe makes it difficult for businesses to scale up quickly.
05When eBay entered the Dutch market, it successfully competed with and eventually replaced the local website marktplaats.net.
6

Complete the sentences with words from the box. One word is extra.

Word bank
01It can be incredibly difficult for a small startup to gain a in a market dominated by multinational corporations.
02Because customer preferences vary so much between countries, a marketing strategy is rarely effective in Europe.
03The company hopes to the growing demand for sustainable products by launching a new eco-friendly line.
04International businesses need experienced legal teams to help them the complex regulatory landscape of foreign markets.
05Smaller companies argue that tax breaks for large corporations do not create a level for everyone.
7

Choose the best answer based on what you heard in the video.

01According to the video, the need to adapt to different languages and legal systems in Europe primarily creates a significant hurdle for which type of business?
02How does the video contrast the consumer markets of the US and Europe?
03What strategy did eBay eventually use to establish a foothold in the Dutch market?
04Which of the following is NOT mentioned in the video as a reason for Europe's lack of dominant tech companies?
8

Business Giants: US vs. Europe

Test your understanding of key terms and concepts from the video.

Match each item on the left with the correct item on the right.

A
B
9

Discuss these questions with a partner. Try to use vocabulary from the lesson.

  1. Considering the dominant industries in your country, what challenges would a local company face trying to gain a foothold in the market globally? Do you think the government does enough to create a level playing field for local businesses against international giants?
  2. The video contrasts the US economy's reliance on a few tech giants with Europe's more diversified top companies. Which model do you believe is more resilient and sustainable? Is it better for a country to support a dominant sector that can easily tap into new markets, or to ensure a level playing field for various industries?
  3. Imagine a successful European company wants to significantly expand into the US or Asia. Why might a one-size-fits-all approach fail, and what specific challenges would they face in trying to navigate the regulatory landscape of a new continent?