It's a Small World After All

Quick quiz: Which famous brands are owned by U.S. companies and which ones are not?  [Answers below.]

  • Nokia
  • 7-Eleven
  • Canon
  • Clearisil
  • Dove
  • Sony
  • Nestle
  • Lysol
  • Heineken
  • Honda
  • Carnation
  • Lipton

Just looking at where a particular company is physically headquartered is not necessarily determinative of where it does business.  It may not be surprising that U.S. companies such as Coca-Cola and McDonald's earn a significant portion of their revenues from outside our borders; 72% and 66%, respectively.  But even companies like Exxon, Intel, and Hewlett-Packard obtain over half of their revenues elsewhere.  We are clearly living in the "flat world" of Thomas Friedman described. 

While American companies seek foreign customers to earn a profit, the U.S. share of the global marketplace as a whole is diminishing.  The amount of business done in the world that is controlled by U.S. companies stands at about 45% these days, down from 66% in 1970.  The projection is that this trend will continue as foreign companies become even larger players in the world economy.

As the lines between foreign and domestic corporations are blurring, investors should consider all the opportunities that exist throughout the world when looking to allocate their investments.

Quiz answers:  They are all owned by non-U.S. companies.   

Words of Wisdom

Q: How does a Zen monk know his pizza is enlightened?    A: It's one with everything.