Corporate Winners in a Hard Place

from El País

It's not all bad news in Spain. There are entrepreneurs who, assisted by highly qualified professionals, are meeting with success in their business ventures. In the middle of a crisis that is already five years old, a group of companies finds itself far ahead of the market thanks to measures that ensured growth and expansion when the economy was doing well, and even now that it is doing poorly.

These firms have increased turnover and either maintained or expanded their workforce. The secrets of their success have been an international outlook, a management style that is willing to take risks in under-exploited market niches, financial prudence to avoid being crushed by debt, investment in technology and the promotion of talent.

The Spanish businesses that have grown at sustainable rates over the last decade, notes ESADE Business School professor Xavier Mendoza, are those that based their activity on innovation and foreign markets.

They are companies like Mercadona, the distribution and supermarket chain, which succeeded through financial brawn, good management and talent. In other cases, internationalization allowed fashion retailers Inditex and Mango and the services and construction group OHL to become mostly independent from domestic consumption. Meanwhile, innovation has enabled the healthcare company Grifols to gain a foothold in a sector ruled by large pharmaceutical companies.

Mendoza explains that innovation ensures the creation of well-paid, highly specialized jobs. "Winning companies incorporate more knowledge and pay their employees above-average salaries."

Other winners include firms that took advantage of the crisis to gain market share, such as the discount supermarket chain Día or the telecoms company Jazztel. Acquisitions helped Banco Sabadell, the private security firm Prosegur, and Agroalimen, a producer of food and consumer goods.

"Spanish companies that are doing well, crisis or no crisis, are those that continue to invest even though the environment is not favorable to it," says Sebastián Giménez, a partner at McKinsey & Company.


- MERCADONA. The secret to the success of the Mediterranean-based supermarket chain, which saw profits increase fivefold over the last decade, is that customers appreciate its focus on value. This is the way it has gained market share, says Sebastián Giménez of McKinsey. "And it didn't need a crisis to achieve it."

ESADE's Mendoza adds that Mercadona listened to the market and lowered its prices, making customers even more loyal. Since the onset of the crisis in 2007, turnover grew by nearly four billion euros to nearly 18 billion euros and its workforce grew by 10,000. Meanwhile, its network of supermarkets has ballooned from fewer than 700 a decade ago to 1,400. Last year, Mercadona invested 600 million euros.