Minority & Woman business owners wishing to become suppliers in a global market must understand that this requires, first and foremost, competing on a global scale.
Multinational corporations are increasingly realizing that they can achieve cost savings by engaging in “strategic sourcing” strategies. These strategies frequently result in supplier consolidation: the shrinking of long lists of local suppliers to short lists of very large suppliers that can service the corporation on a global scale.
To succeed in the global market, minority businesses should employ a few tactics:
Partner for capacity building: Minority & Woman owned businesses can gain advantages and better equip themselves to compete in a global market if they form strategic alliances. Business-to-business partnerships can allow minority and woman owned firms to pool their resources to serve corporate customers on a global scale. Corporations are increasingly welcoming alliance and joint venture proposals in global bids.
Embrace second-tier opportunities: Second-tier suppliers are subcontractors who provide goods and services to primary corporate suppliers. These types of arrangements can provide global business opportunities for small minority and minority owned businesses that may not yet qualify as primary suppliers to multinational corporations. By gaining experience as a second tier supplier, these businesses can position themselves to compete for future primary supplier opportunities.
Leverage existing resources and networks: A number of organizations have resources and services to assist minority businesses in their attempts to go global. The National Minority Supplier Development Council (NMSDC) has established affiliate councils in Canada ; the United Kingdom ; Australia ; & South Africa, and offers a robust set of international programs to assist and certify minority businesses.
Woman owned businesses can look to the Global Business Committee of the Women’s Business Enterprise Council(WBENC) for asssistance in expanding outside the US. Another organization, WEConnect International is a global non-profit that facilitates sustainable economic growth by increasing opportunities for women-owned businesses to succeed in global value chains. WEConnect educates, trains, registers, and certifies women’s business enterprises based outside of the US that are at least 51% owned, managed, and controlled by one or more women. WEConnect is currently active in Canada, Chile, China, India, Peru, and Europe (primarily in the UK).
Utilize corporate supplier diversity programs: Most importantly, minority and woman owned businesses should take advantage of corporate supplier diversity programs and initiatives, and use the corporate representatives as their advocates. Most large multinational corporations provide resources to assist minority and woman owned businesses in navigating the complexities of their procurement processes.
Understanding and utilizing these four tactics will give minority and woman business owners an increased likelihood of success in competing in a global market.