1. SUPRACOUNTRIES
INTRODUCTION
In recent years, during which I have carried out work in close collaboration with a
multitude of companies whose objective was not only the search for new markets but
also to break into them successfully, I have had the opportunity to understand a little
better how our environment works.
I agree totally with the many experts, among them Professor Pankaj Ghemawat, who
say that the world has changed, mainly because of the unstoppable march of
technology, but also through the political will of nations to open up to others and vice
versa (although this second situation, as we have seen on many occasions, is
reversible). In this area, countries have made a great effort to create preferential trade
areas, free trade zones, customs unions, common markets, economic unions and
many organizations whose role is to facilitate cooperation. However, and to quote
Professor Ghemawat again, I would echo the concept of semiglobalization, in which,
although we have achieved a high level of convergence, we cannot forget that there
are still countless differences between countries and markets, mainly arising from
cultural, administrative, geographic and economic issues. I would like to emphasize
this aspect, as we cannot ignore it in dealing with the process of internationalization.
Having said that, in my opinion the general process of globalization is unstoppable, and
the great challenge for companies is to be conscious of the size of the market they
move in. It is clear that a normal restaurant in a normal location in Spain is not
competing against a normal restaurant in China, so its market is limited to the town
where it is located and maybe the surrounding ones. But it is not the same case, for
example, for the travel agency next door to the restaurant, as its competitor is not
necessarily another agency in the same town or nearby, but an agency which offers its
services by internet and may be based in, say, France. Therefore, as many textbooks
and business schools teach us, it is imperative to identify our market clearly, though we
must not forget to take into account the changes that are going on around us.
I am frequently asked if there is a real need to internationalize, and the answer is not
easy: it depends on any number of factors. I always say that this process must not be
the cause of the demise of a company, but rather another step forward in its activity
and existence which requires care in what, when and how to take it. This brings to mind
one of the maxims of business management: the diversification of risk. In the last
hundred years, in only two has the world economy fallen worldwide, which gives us an
idea of the real need to diversify in new markets. Not to do so could put the very
existence of a company in danger if there is a long period of recession such as the one
we have been living in Spain since the year 2008.
“SUPRACOUNTRIES” OR AREAS OF INFLUENCE

2. “Supracountries” or areas of influence and barriers to influence
In my attempts, as I said before, to get a better understanding of the reasons for things
in the field of internationalization, mainly to be able to give solutions to the companies I
collaborate with, I have been forced, as is so often the case, to turn to history to find
answers to our current situation. My studies have given rise to what I call
“Supracountries” or Areas of Influence, a concept I will explain in this section.
When I began to explore these concepts, I had no other objective in mind than to be
able to understand the environment which companies currently live in, and in particular
to be able to answer the questions I was facing in my daily work. I hardly need say that
by analyzing a problem thoroughly and making a good diagnosis we will be able to
solve it correctly. However, if we err in our diagnosis, we will without doubt also fail in
our approach to the solution, and this, in most cases, may prove fatal for an
organization, which may well not be able to recover from the mistake.
As we explained above, the world is tending towards globalization. However, though
we must recognize that we are still a long way from being able to talk about a totally
globalized world, we can safely affirm that the world is coming together and differences
are becoming less significant. This has brought us to reflect on the topic, and to take on
board that the process towards this globalisation did not begin with modern technology
or even in the last few decades: rather, it began centuries ago, almost at the beginning
of time, though now it has become more intense, as the pace has increased and it has
become almost irreversible. True, the aim of the Roman Empire was not to achieve a
global world, but to dominate all known lands, taking all power to itself and imposing its
civilization with a view to survival, but without being aware of it they contributed greatly
to globalization.
The same would occur later with Christopher Columbus, who was looking for new
lands, riches and glory for the Kingdom of Castille. However, these days there is a
factor at work that was missing at the time, say, of the Roman Empire, and that is that
relationships between countries are now so intense that even languages evolve in
parallel, rather than separating, providing a strong cohesive force. That isn’t all:
communications, cooperation frameworks between countries and modern technology
keep cultures together, providing two-way feedback thanks to music, the television,
etc., meaning that part of what united them lives on.
All of this, without it ever being the intention of those that caused it, means that in a
more globalized world, large areas have arisen which have strong common bonds,
providing a real identity which differentiates them from the rest. These areas are on a
higher plane than what we today denominate countries, occupying an intermediate
position between a totally globalised world and the individuality of a particular country.
To define these areas, I have used the term Supracountry, or Area of Influence. To put
it another way, we could say that the Supracountries, or areas of influence, are a group
of territories with a strong common identity, rooted in a series of factors and historical
events which have caused convergence at a greater speed, creating a deeper, more
intense level of cohesion among them than with those that do not belong.

3. Influence Barriers
These Supracountries, or Areas of Influence, are made up of countries, or parts of
countries (as one country can belong to various areas of influence) sharing common
bonds, relationships and characteristics, mainly in the area of culture and tradition. In
many cases the language provides a great unifying link, frequently in combination with
close economic and political relationships which make movement of people and
companies easier, and where this very cohesion creates an entrance barrier to others,
which we shall call the Influence Barrier.
In Professor Pankaj Ghemawat’s book “Redefining Global Strategy: Crossing Borders
in A World Where Differences Still Matter”, we find a magnificent description, in the
CAGE analysis, of all the factors that unify or differentiate markets, based on cultural,
administrative, geographic and economic aspects. We can see that there are countries
or geographic zones to which some of these factors are common, creating close links
that mean that as we move around or carry out any activity, be it economic, commercial
or merely personal, within the Supracountry or Area of Influence to which we belong,
things are easier and we feel more comfortable because there are relatively few
differences from our own immediate environment. However, when we try to do the
same in another Supracountry, we find more differences, or entrance barriers, which,
taken together, form this Influence Barrier which is so hard to overcome.
The fact of being supranational, as the term itself suggests, is equally relevant, and for
this reason I have not taken into account important markets such as China and Japan.
The current map of the world is probably made up of the Supracountries and those
countries, such as China or Japan, which for historical or geographical circumstances
have remained isolated, but which, without doubt, need to be taken into account on the
economic world stage. I will go deeper into the reality of China, and how it currently
interacts with the rest of the world, in a future article.
Dynamic Nature
Another key aspect of Supracountries or Areas of Influence is their dynamic nature,
which means they change over time. Until such time as we reach total globalization, at
which point they will completely disappear as everything would be the same and
differences non-existent (a scenario which I think is unlikely ever to happen because of
such critical factors as language and religion), this concept will continue to be valid and
applicable to our business reality. We can conclude by asserting that these
Supracountries or Areas of Influence will vary according to the factors we have already
listed and to others which may force their way into consideration. This means that what
I consider is the map of Areas of Influence today may not be the same tomorrow, and
we need to be able to detect the changes, which will most likely involve merging one
area with another, reducing their overall number.
Before continuing, I would like to point out that this concept is purely economic and tied
to the process of internationalization.
INFLUENCE BARRIERS

4. Taking into account the above, we need to be aware that between the different
Supracountries there is an intangible wall, the Influence Barrier, that has to be
overcome, as it forms a formidable impediment to entry to a group of countries or a
particular geographic area. I would like to stress how difficult it is to break through:
however, once this is achieved, it becomes an extremely important competitive
advantage. I would like to expand on this point, which is very interesting as it explains
why the multinationals are so powerful and why it is so difficult to compete with them.
This is because they have managed to break into the Areas of Influence.
The more breakthroughs into Areas of Influence, the greater distance a company can
put between itself and its competitors, and the greater the competitive advantages that
have to be overcome. This explains the leadership of countries such as Germany,
Japan, The United States, England, France and other countries which are world
powers. For other, newer economies to provide real competition for them, growth in
their domestic markets is not enough: they have to strive to conquer other markets and
other Areas of Influence. Only in this case will they be able to compete with, and
supplant, these economies and their big multinationals.
“Areas of Influence are dynamic: they have changed and will continue to change
throughout history”
The Supracountries, or Areas of Influence, are a consequence of a set of initial factors,
which we will analyze below, which have given rise, in a more intense way and at a
greater speed than would otherwise have been the case, to a similarity of approach to
a series of aspects. The current map of the Supracountries can be seen in the following
figure, which indicates the existence of six big Supracountries. However, it mustn’t be
forgotten that this is a dynamic concept, and that, as a consequence, it is alive and
evolving. This means that what today is the map of Areas of Influence may not be so
tomorrow, so we have to remain alert to any changes that may take place.

5. If, as we mentioned above, we add the two other main markets of today to this map, we
have a world vies as shown in the next figure.

6. Each Supracountry, or Area of Influence, is, of itself, for the people and countries within
it, a competitive advantage with respect to other areas. And the bigger the Area of
Influence we belong to, the bigger this advantage is. For this reason, it is very
important to have access to other Supracountries or Areas of Influence in order to
eliminate the competitive advantage of our rivals in that Area. Likewise, we need to be
aware that our advantage in our own Area can be nullified if a company from outside it
overcomes the barrier.
Another crucial factor as we move around within a Supracountry is, and here I am
going back to the term semi-globalization as it can be extrapolated to an Area of
Influence, that we cannot treat it as if there were no differences within it, because there
are, and in the process of internationalization we must bear them in mind. An Area of
Influence is one where a company can move around more easily owing to the reduced
number of entrance barriers and a greater number of similarities of various types
between the different countries that make it up. This gives a comfort zone feeling, but
we must not relax in the process of internationalization, as, when all is said and done,
each market needs to be attended to individually, taking its peculiarities and differences
into consideration.
Why is it important to have an awareness of the Supracountries or Areas of Influence:
1. They provide us with knowledge of the real situations that surrounds us
This is of enormous relevance, as it allows us to be aware of these factors when taking
a decision, so that business criteria are paramount when facing an internationalization
process. Although it is true that the entrance barrier is lower when we want to tap into a
market that belongs to the same Area of Influence as we do, than when we want to
enter one that is in another Area, this may not be sufficient to rise above other criteria
such as security, monetary risk, or simply whether it is the right market for my product.
We all know that it is much easier to go where we know people. However, when
I work with companies on this point, I insist on making them see that sometimes
the easy route isn’t the most suitable, and that, although it is human nature to
tend to the easy way, in business we need to be aware that we are looking for
what is the best for the company. So the mere awareness of this danger, which
could be described as “drifting in our own Area of Influence”, raises the alert,
causing our decision making process to be more objective. Of course, if the
conclusions about the two markets are practically the same, and one is within
our Area of Influence and the other isn’t, unquestionably we should choose the
one in our Supracountry, as, given greater similarity and consequently lower
entrance barriers, the possibilities of success in this market are greater than in
the one that is not in our Area.

7. So the Supracountry is not a bad thing in itself: on the contrary, in so far as it is
possible we should take full advantage of it. All we need to do is be aware of its
existence and keep it in mind when we approach a new market in the
internationalization process.
2. Preparation of a general internationalization strategy.
The design of this strategy needs to take this into account to maximize
resources and minimize effort in structuring our internationalization process. In
other words, the mere awareness of these supracountries will force the
preparation of said strategy to keep in mind the effort and difficulties inherent in
overcoming the entrance barriers, and, in the case of belonging to the Area of
Influence, the competitive advantages of our company.
This allows us to define priorities and approach the internationalization process
logically. For example, if we are thinking of opening three markets, let’s try to do
it in the minimum number of Supracountries possible, as the effort involved will
be much less. And if our objective is to reach several markets in the same area
of influence, this concept will allow us to structure our planning so as to
minimize our workload, as, by keeping this in mind, we would carry out a
strategy specifically designed for that Supracountry. For example, we could
open a first market within the Supracountry, and then from this market attack
the others. If we did not keep this in mind, the difficulty and the resources
required would be greater, as we would be trying to open two markets from our
own in a different area of influence, meaning two breaks with an area of
influence rather than one. So this is clearly a useful concept when designing a
global, internationalization strategy.
As we have seen, the mere fact of keeping this term in mind allows us to
approach an internationalization strategy so as to increase our chances of
success as we can build, for example, on the competitive advantages which our
area of influence provides, and therefore minimize the risks of entry to new
markets and optimize the necessary resources for the whole process.
It is therefore as important to detect the target markets of our company or
product, bearing in mind factors related to the product itself, the demand in a
particular market, how developed that market is, the geographic and cultural
distance, among other factors, as it is to be aware at a higher level of these
Supracountries, in order to be able to carry out a global internationalization
strategy. In other words, I consider it essential for internationalization planning
to start from a higher level than that of the individual markets. This level is made
up of the Supracountries and those individual economies that do not form part

8. of one, such as China and Japan. This level shall be called Supracountry Level,
or Areas of Influence.
In later articles, we will analyze each of these areas of influence more specifically,
detailing each and every link they have, and so provide the key to overcoming the
influence barriers which form an obstacle to the task of internationalizing our company.
Not all influence barriers are the same, so we need to understand the differences to be
able to get past them.
The origen of the Supracountries or Areas of Influence
When I began to analyze all the circumstances which could have an influence on our
current reality as far as company mobility is concerned (although the same can be said
for individuals), and in particular as regards the area of influence or supracountry, I
came to the conclusion that there were a series of main causes which lead us to a
better understanding. I am aware that there are many others, but I am going to refer
specifically to: colonialism and other relevant political movements up to the end of the
20th century, migratory movements, mainly during the last century, commercial and
economic relations and several others, among which language and religion are key. In
my opinion, these factors are critical in any analysis of the current situation.
Until not so long ago, colonialism was a reality in the world. This, mainly at the hands of
the big European nations, meant that for many years, centuries even, there was a
transfusion of culture,
language, habits and
customs from the
metropolitan centre
towards the colonies, in
many cases imposed by
force. This movement
has meant that, today,
many of the former
colonies maintain a
special link with the
previous home base,
and with the other
territories which fell within this power’s borders. This is possibly the single most
important factor in the origin of what I have called Areas of Influence or Supracountries.
Without going into detail, a brief glance at the map (above), indicating some of the
former colonies that have given rise to these areas, helps us see the clearest ones: the
Commonwealth, Latin America , France (mainly in North Africa) and Russia (with some
of the old republics that made up the USSR)
Returning to Professor Ghemawat’s causes of differentiation between countries, we
recall: cultural, administrative, geographic and economic.
Colonization has meant that some of these differences are smaller within these areas,
particularly as regards the cultural element: the fact that many former countries
continue to use the language of the colonizing country, have the same religion, or
simply drive on the same side of the road gives the feeling of being at home. As for the

9. administrative part, colonization has left a large legacy, and therefore much of local law
has been influenced by the legislation of the colonizer. In the economic field, this long
period of coexistence meant that many commercial links were established which still
exist today. For all these reasons, I consider that this element of history fact has put its
stamp on today’s reality.
In the same vein, although not considered colonialism as such, I have taken into
account the political relationships of influence which came into being after the Second
World War. On the one hand, the division of Europe into two great blocks, as a result of
the Warsaw Pact, not forgetting the USSR, which had emerged after the First World
War as a federal state where Moscow held the reins of power and exerted an
enormous influence on the surrounding territories. And on the other hand, the existence
of authoritarian regimes, such as in Spain or Portugal, which kept them apart from
western reality.
However, I would like to avoid putting colonialism forward as the only reason for the
existence of these areas, as throughout history there have been other circumstances
which have been relevant to their development. A second factor I use to explain their
origin are migratory flows. These, while not in themselves a defining factor in the
generation of an area as such, have contributed to the strengthening of those which
already existed, or to the creation of small colonies of influence spreading these areas
into neighbouring countries, for example. Their main role, though, has been to provide
a bridge to break down what I call the barrier to an area of influence. Thanks to these
migratory flows, bridges have been built which provide links between different areas of
influence or supracountries. On the map we can see the principle migratory flows of the
twentieth and early twenty-first centuries.
A third factor which
we cannot ignore is
commercial and
economic relations,

10. both at company and state level. Often thanks to investment by big multinationals, but
at other times, as we said at the beginning, as a consequence of political agreements
between nations, such as the creation of preferential trade areas, free trade zones,
customs unions, common markets or economic unions, they facilitate movement
between different Areas of Influence. A clear example is the European Union, which will
no doubt succeed in creating an Area of Influence which is not yet fully consolidated
given the gulf that still exists between the member countries. From my point of view,
the day the European Union becomes an Area of Influence or Supracountry, is the day
that the European project can be said to have succeeded: until then, it is a shared
space with many barriers yet to be overcome.
Before finishing this section, I would like to point out two more factors which particularly
deserve a mention, as I believe that although they are to a great extend the cohesive
nodes of the former colonies, they are not always linked to these and on occasions
have followed their own path. They are language and religion. The clearest examples
we can see are the Arab countries, where Areas of Influence have been created based,
basically, on these two factors, and where most of the colonizing factors have
disappeared completely. In the following figures we can see the world divided by
religion and language. This gives us a clear idea of what we are talking about.
Español
Inglés
Francés
Árabe
Portugués
Ruso
Chino
Hindi

11. In conclusion, we should not consider colonization to be the only cause of the
development of Supracountries, because, as we have seen, other factors have also
played an important part.
How to break down the influence barriers
In this final section, I would like to bring my experience to bear to explain how to break
down an influence barrier, or, to put it another way, how to gain access to a
Supracountry or Area of Influence different from my own. In most cases, the
breakthrough happens as a result of the use of a combination of these tools, not by the
application of one of them alone. I would like to point out that I will make a general
presentation as to how to break down an influence barrier, but it is important to take
into account the particular details of each case, at the same time adding those of the
individual country we are approaching in the area.
There is no single formula for breaking into an Area of Influence, as this in turn will
depend on the strategy adopted when approaching a new market.
This statement can be more easily understood if we consider that it is not the same to
enter a market by buying a company, in which case we find ourselves in a mature
market, having accessed via purchase of market share, as it is by growing organically.
Neither is it the same if we use a distributor or importer already within the market rather
than establishing a network of sales outlets of our own.
For all these reasons, we will have to use the different methods I propose, combining
them together according to the entry strategy we have decided on. As these methods
are tools to break through the influence barrier, it is important to keep in mind the local
factor, which will multiply the chances of success for our company. It is the same if we
look at different breakthrough strategies used by large and small companies. Below I
will give a few hints as to how to do this depending on the type of company and the
resources available.
1 Be present in the Area of Influence. Once inside an area of influence it is easy to
move around within it as long as we use the market via which we gained access as a
base, because if we want to break in again from our own country we will be faced once
again with the influence barriers. For this reason, if we wish to move into another
country in the same area of influence, I recommend basing that move on the markets in
which we are already present: it is from here that we can best approach new countries
in the same Area.
2 Take advantage of migratory flows. As we mentioned above, migratory flows, both of
people and companies, are an important breakthrough factor as they provide significant
bridges between two Supracountries. There are two types. Firstly, people or companies
from our destination country who are present in our own country. A clear example is
provided by immigrants who have moved to other countries and have managed to help
companies where they now live either directly or by providing them with contacts
making entry into their original home markets easier. Secondly, and this is how the
Chinese are doing it, where influence barrier breakthrough rests on people or
companies from our own country who are already operating successfully in our
destination country. I will develop this theme in the chapter on China.

12. 3 Institutions and official bodies. Throughout history, as you would expect, mechanisms
have been put in place to make the internationalization process easier. For this reason,
a number of institutions have been created, such as Chambers of Commerce, some of
which are bilateral, whose function in many cases is to facilitate relations between
different markets, making the whole process easier. In addition, states and public
bodies, conscious of the difficulties faced by companies expanding into new markets,
have created official organs of foreign trade, many of them located inside the foreign
markets, or have permitted their embassies to be used as a base for the same
purpose.
4 The language. On many occasions, the area of influence can be breached by the
simple method of adopting the language of the destination country. This is most
frequent in internet-based companies, where the home base is unknown and provided
by a domain. In these cases, more or less the only thing you have to do is adapt to the
local language.
5 Specialized local companies. Nearly all markets have specialized local companies
whose role is to facilitate entry into the country. This type of company is very useful as
they can make breaking through the influence barrier easier. It is important to select
carefully so as not to waste resources.
6 Local partners and collaborators. In some markets, almost the only way in is to find a
local partner. Indeed, there are those where this is required by law. This makes
breaking through the barrier easier, though we must be very careful with our choice of
partner. Very often, instead of actually creating a company, we can use various
mechanisms of collaboration. In any case, the result and the entry strategy would be
very similar.
7 Local employees. Throughout this document, we have considered people as bridges
to break into areas of influence. So we consider it very important that the majority of the
workforce, if not all of it, should be local. This will provide us with direct transfer of
market knowledge from our employees to the business. We are not saying that no-one
from the home country should be sent, as often this is essential in terms of know-how,
but as far as possible we should rely on local people to increase our chances of
success and to overcome many of the existing entry barriers with greater ease.
8 Local knowledge (culture, language, customs, tastes, etc.). Having people who know
the destination country gives us the chance to get closer to it. The great thing about
this is that the person concerned has know-how about the business, and knowledge of
the home country as well as of the destination country, meaning that he/she is
extremely useful in the process. It is not always easy to achieve this, but when it
happens it is extremely valuable.
9 Buying a local company. Possibly the quickest and easiest way of breaking the
influence barrier is the purchase of a local company. We can observe that this is the
strategy followed by big organizations, as it places them in the market immediately and
they can do business from the word “go”. But this is not always so easy for smaller
companies with fewer resources, who are more likely to need other methods to break
into the area of influence such as those listed above.

13. Conclusions
o The concept of Supracountry, or Area of Influence permits us to have a deeper
understanding of our environment which we can apply when taking decisions
affecting an internationalization process. This will give us the opportunity to
carry out a closer, more detailed analysis of our objectives and strategy and
how to overcome the influence barriers when necessary.
o We must be careful not to confuse Supracountries or Areas of Influence with
countries, as the term refers to a series of similarities and links between its
constituent parts, helping reduce barriers for internationalization movements
from one country to another within the area, but at the same time creating an
entry barrier to itself as far as other areas of Influence are concerned.
o Internationalization is a complicated task, which requires us to keep many
factors in mind, including those presented in this paper. In any case, I consider
it absolutely essential, in a world tending more and more towards globalization,
for companies to examine just how important it is for them to go through this
process, and supposing they take the decision to follow it through, to do it in a
way that takes into account absolutely all the relevant variables. Only by
minimizing risks will we be able to increase our chances of success.
Bibliography
o Redefining Global Strategy: Crossing Borders in A World Where Differences
Still Matter - Professor Pankaj Ghemawat, ed. Harvard Business Press, 2007
o Global Standardization vs. Localization: A Case Study and a Model. In The
Global Market: Developing a Strategy to Manage across Borders, ed. J. A.
Quelch and R. Deshpande. San Francisco: Jossey – Bass, 2004
About Daniel Millán
Bachelor of Business Sciences and Master of Business Management from the IESE
Business School.
_ CEO y Founder Member of TERNUM Group. Since 2006.

14. _ President of Family Mimar, a seed capital investment company created to
support new ideas and projects. Since 2005.
_ Before 2005, several start-ups, including the design and management of a
Project Finance initiative valued at 100 million euros in Kronos Kapital, investing
in Polish assets.
_ Assessor to the Polish Hispanic Chamber for internationalization matters.
_ Frequent conference speaker on Internationalization and Poland as an
attractive investment market. Chambers of Commerce, The Business Institute
(Instituto de Empresa), IESE, ICEX, IPEX.
_ Frequent article writer on Internationalization in his blog
http://www.ternumcomercioexterior.com
_ Contact:
o daniel.millan@ternumgroup.com
o @dmillanm
es.linkedin.com/in/dmillan