Santa Goes Global
‘Twas the night before Christmas. After delivering to the house of three small children in northern Maine, Santa headed for the Canadian town of Fredericton. After getting an exercise ball stuck in a chimney in Texas (this annoyed Santa. What child in its right mind would want an exercise ball?) Anyhow, after getting stuck in this chimney, Santa was running late. His reindeer cruised high and fast. Ice crystals from a wispy cirrus cloud stuck in his beard. And just then, to the right of the driver’s seat, a crackling sound erupted. Stupid radio. Santa had never felt it actually necessary to modernize his sleigh, but gadget-fascinated elves at his north pole base had decked the sleigh out with electronics and “safety measures,” such as seat belts and airbags. A voice caught his attention. This was the control tower at Fredericton International airport. Would he please land on runway E4. Immediately.
The welcoming party at Fredericton International airport started off on the offensive. What did Santa think he was doing importing goods across national boundaries. Santa replied that bringing goods in was his duty. The officials reminded him that his only duty was to be tariff-ied. He was. What would become of his reputation if he were late delivering gifts. A few hundred thousand empty trees on Christmas morning would seal his fate. The jolly old guy on glass coke bottles and Norman Rockwell Paintings – what a future.
A brief quiz ensued. Was Santa aware of the embargo on Cuban goods? Distributing free products could constitute dumping. Had appropriate measures been taken to procure an exemption? Why was Santa in such a hurry? How much ground did he have to cover?
In short, the officials discovered an appalling lack of international marketing savvy. Night before Christmas or not, Santa needed a crash course in international marketing. This was the only option, unless Santa wanted real trouble on future Christmases. Stacks of paperwork, scattered across a nearby table, worried Santa. Acronyms, printed in bold text, filled the documents. What did they mean? Santa’s imagination ran wild NAFTA: Not Available For Trade, Alas. MERCOSUR, My Explicit Right: Confiscate Objects and Subject to Unusual Restrictions. APEC: Appropriate, Purloin, Expropriate, Commandeer. Terrified at the possibilities, Santa tore his eyes from the papers.
The group began by explaining restrictions: tariffs, quotas, embargoes, and exchange controls. There are levels of restriction. Embargoes flat out prohibit the export or import of certain goods. Yes, that’s why Cuban children never get US made christmas presents. Tariffs, basically an import tax, serve two purposes: to protect domestically produced goods from foreign competition, and to provide revenue to the government instituting the tariff. Some countries ease restrictions further by specifying quotas: quantities of a product which may be imported or exported at a reduced tariff level. Should the quota be exceeded, however, higher tariffs would apply. When the self-appointed educators introduced exchange controls, a desperate Santa butted in, suggesting that the two parties exchange controls immediately. They could control who got which presents. Santa would control the restrictions. The educators smiled disparagingly. Not possible. So sorry. Exchange controls wouldn’t affect to Santa anyhow, unless he was providing corporate-CEO style bonuses for Christmas. Exchange controls apply to buying or selling large amounts of foreign currency. This was too much. Santa began lapsing into shock.
Being generally decent humans, not devoid of some sympathy, despite their regulation, restriction, and paperwork loving natures, the group of officials ended the bad news and presented Santa with some encouraging information. Certain groups of countries had banded together to simplify trade amongst themselves. NAFTA basically allowed free trade between major North American countries. MERCOSUR did the same for South American nations. APEC facilitated trade between the Americas and Asian countries like China, Thailand, Japan and others. At the mention of the land of the rising sun, Santa felt he could see the light at the end of the tunnel. These alliances covered most of the world. The countries not covered by alliances were generally so unstable and tumultuous that no one would care about import/export regulations. For instance, a few bills generally greased sleigh runners at border crossings throughout most of Africa.
As if reading his mind, a short official sporting old fashioned spectacles began droning on about cultural relativity. His peers generally recognized him as an Einstein of cultural differences of relative importance. Because different cultures have different norms concerning offensive, acceptable, and commendable behavior, speech, or advertising, it was important to understand cultural differences before trying to establish markets in foreign countries. Had Santa attempted giving gifts to officials in North America, severe repercussions would have ensued. In Africa, however, different standards prevailed. Cultural norms also affected the types of products demanded. Giving mittens to children in Central America or Africa would put Santa out of business. Alcoholic products were not popular in Muslim countries. Of course, the official reminded Santa, if there were any bourbon or sherry in the sleigh, it would be wise to leave it in the official’s office, so it did not fall into the wrong hands. Following this remark, the official smiled as pleasantly as an official can, and shut his mouth.
Taking advantage of the silence, Santa succinctly explained his predicament – time was running out and there were presents to be delivered. He needed to bid these excellent gentlemen goodbye.
But no, there was more. The best news was yet to come, or so the officials thought. They started in on McDonalds and french fries. Did Santa realize that he would be less busy if he turned himself into french fries?
French fries? Who did they think he was, Mr. Potato head? This was ridiculous. Indignation boiled up in Santa, but before he could speak, the officials squeezed in another question. Was Santa aware of the benefits of licensing, franchising, and outsourcing. Yes… Franchising, not french fries-ing. This could relieve the terrible rush every Christmas season. Franchising would allow Santa to provide costumes and delivery mechanisms to qualified gift deliverers around the world. They would compensate Santa for use of his marketing strategy, and Santa would not have to deliver all gifts on his own. Licensing provided similar opportunities where jolly old, white bearded men could buy the rights to do Santa’s work. Outsourcing actual deliveries of gifts would free Santa up considerably. To expedite delivery options and reduce shipping costs, Santa could take advantage of a number of options. Contract manufacturing would allow Santa to hire foreign companies to manufacture gifts, presumably to be distributed in those same countries. Any part of the gift production and delivery process could be outsourced to other companies, either at home or abroad. Offshoring, similar to contract manufacturing, would allow gift-creation processes to be moved abroad in order to facilitate shipping, lower costs, and generally make life easier on the world’s busiest delivery man. If Santa took advantage of these manufacturing and licensing options, he could become a true multinational, since operations, not just deliveries, would take place around the globe. As a multinational, Santa would need to choose whether or not to maintain direct ownership of all overseas operations, or seek strategic alliances with companies already established in worldwide markets. At this point, the group of officials realized they were discussing relatively minor concepts. So they backed up and reiterated one crucial concept: proper globalization policies would keep Santa’s business alive in the modern world. He must remember this.
A clanging noise jarred every individual in the meeting. A senior official whipped his head around and focused a withering glare on his subordinate. Would the inferior official never remember to mute his phone? Yes, a blood pressure pill was important, but disrupting meetings with such unexpected noise affected everyone’s blood pressure. Santa stretched and rubbed his eyes, glad for the disruption of the lengthly meeting. Opening his eyes again, all was dark. An alarm clock bleeped impatiently.
T’was the night before Christmas… Time to get going.