How a Family Business Can Dominate a Market
You might think of a family business as the deli shop on the corner, the cleaners down the street, or the bakery across town. In one sense, you’d be right. In any given town or city across the world, Main Street is lined with “mom and pop” shops that contribute to that economy in a very real way. But family businesses make up so much more of the global economy than you may realize.
It is estimated that the total economic impact of family businesses to global GDP is over 70%. In America, according to the U.S. Bureau of the Census, about 90 percent of American businesses are family-owned or controlled. Ranging in size from two-person partnerships to Fortune 500 firms, these businesses account for half of the nation’s employment and half of her Gross National Product.
Communities are healthier and more sustainable if they are supported by local businesses, which have a tangible stake in a town’s success. Local businesses create a virtuous circle that results in higher living standards and greater personal accountability for the long-term wellbeing of our communities.
These independently-owned firms can–and often do–dominate the marketplace. The reason is fairly simple: family businesses better understand their markets. These companies often have a relationship with those they serve, promoting loyalty amongst consumers. In contrast, multinationals get to a point where they lose touch and become the corporate version of political entities like the Roman Empire and the Han Dynasty. Once they get to a certain size, empires start fraying at the edges and inevitably experience overreach and collapse. Many multinationals struggle to establish operational procedures that keep far-flung offshoots in line with a central policy without stifling these branches’ ability to conduct good business.
Successful family businesses can grow, adapt, and make smart strategic decisions when they exercise commitment to their core values. One might have thought that THP passed up a partnership with Coca-Cola. However, that wasn’t the case at all.
Squaring off against a much bigger competitor requires nerves of steel, particularly with a corporation hailing from the richest and most powerful country on the planet. But my father taught me valuable lessons that day: understand our values and what our company stands for, what direction we are heading in, and above all else, do not be dazzled by the power that multinational companies are able to display. That’s how family businesses compete and win.
Learn more about how our family business, THP, became Vietnam’s leading beverage company by visiting my website!