Summary
This ESL lesson for B2 English students delves into the intriguing question of why European brands often trail behind their US counterparts in global market dominance. Through engaging video content, students will explore the economic and cultural factors contributing to this disparity, analyzing key concepts like market capitalization and entrepreneurial culture.
The lesson focuses on enhancing vocabulary related to business and economics, practicing the Past Simple Passive, and engaging in discussions about market dynamics and global competition. Activities include a warm-up discussion, video comprehension tasks, and practical exercises on key vocabulary and grammar.
Activities
- A warm-up discussion where students reflect on global brands, their origins, and regional business styles.
- Video comprehension activities, including a fill-in-the-gaps exercise, based on a video exploring the reasons behind the US's economic lead.
- Vocabulary matching and in-context exercises focusing on terms like "stark," "languishing," "behemoth," "allocate," "homogeneous," and "regulation."
- A grammar exercise dedicated to the Past Simple Passive, allowing students to practice transforming sentences from active to passive voice in a business context.
- Practical English practice with business collocations and phrasal verbs, such as "take a dip," "get a foothold," and "jump through hoops."
- Speaking practice involving critical discussion questions about market competition, entrepreneurial culture, and the impact of regulatory frameworks on business growth.
This video was brought to you by Brilliant. When consulting the list of the world's biggest companies, you're faced with a pretty stark reality.
That's because eight of the top 10 companies are American, one is Saudi Arabian and one is Taiwanese, but none of them are European.
In fact, even if you extend this list right out the top 50, you'll only find nine European businesses: Novo Nordisk, LVMH, ASML, Nestle, L'Oreal, AstraZeneca, Shell and SAP compared to America's 30 in the top 50.
Now, unsurprisingly then, the top 10 European businesses are worth far less than the top 10 in the US. So what's going on?
America is admittedly a big and powerful country but Europe is just as big and historically at least has loads of power.
So why is America winning with its so-called Magnificent Seven while Europe is somewhat languishing?
When it comes to the biggest US companies, people always talk about the Magnificent Seven stocks: that's Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla.
Now they're not technically America's biggest seven companies anymore with Tesla taking a bit of a dip recently, as we explained in another video linked in the description.
But they're certainly all huge Tech Giants based out of the US with a combined market cap of nearly $14 trillion.
Now their European equivalent is what Goldman Sachs dubbed the Granolas in 2020.
These companies are GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, AstraZeneca, SAP and Sanofi.
Now I'm not going to get into how much it pisses me off that the letter N is used three times in this acronym, but there are a couple of notable differences here.
Firstly, the Magnificent Seven have a combined market cap of nearly $14 trillion. The Granolas, well, theirs is just shy of three trillion, and there's 11 of them.
Sure, they're big still. Everyone's heard of L'Oreal and Nestle, but their scale is vastly different.
The other major difference is the industries that play here. Of the top American stocks, the majority are tech companies in one form or another, while in Europe there's only two.
ASML develop and manufacture photolithography machines that are then used to produce computer chips and SAP who produce enterprise software.
In Europe, the majority of the companies are actually healthcare and pharma brands with the biggest company in Europe being a Zic developer, Novo Nordisk.
There's also a couple of FMCG companies, that's fast-moving consumer goods, and there's also LVMH, the owner of luxury brands including Louis Vuitton, Moët Hennessy, Dior, Sephora, Tag Heuer and Bulgari.
Now clearly then, unlike the US, Europe doesn't have massively dominant tech companies. So why is that?
Why does Europe lack big tech companies and why is Europe generally bereft of these kinds of big companies?
Well, one obvious explanation is the language barrier. Put simply, any business's service or product that you're trying to sell in Europe needs to be translated into the language of each country, which takes time, money and resources that only large businesses can afford.
On top of that, businesses also have to allocate resources to adapting to each of Europe's distinct markets and their various legal regulations, which just isn't a problem if you're a big company only operating in America.
The second big reason is market competition. While the US is one enormous homogeneous market, Europe is made up of 27 different countries with different languages, cultures and customers.
So if you want to sell a product as widely as possible, that's easy in America where you've got 300 million potential customers immediately at your disposal.
But that same product won't necessarily sell as well in France as it might in Germany.
Take the example of tech businesses like Facebook or WeChat. In the US and China, you've got hundreds of billions of potential users who use your product in very similar ways across the entire market.
But if you create the perfect social media product for Dutch people, that's not necessarily going to sell in Spain.
So as a business, you can't necessarily scale up anywhere near to the levels you can in the US, even if Europe has a relatively similar population on the whole.
What complicates things even further is the absolute dominance of US companies. Even if you can create a banging product like Skype, for example, an American behemoth like Microsoft can just step in and buy it for an obscene amount of money, and then your European product becomes a US one.
Similarly, when eBay first tried to get a foothold in the Netherlands, it struggled because the existing niche was being filled by Marktplaats.net.
What did eBay do? Well, it simply bought the site and folded it into the eBay empire, albeit under its original name.
But that's not all. Our final point is the broader financial environment. In Europe, venture capital is generally seen as more risk averse in Europe compared to the US, which can make it tricky for startups to get financial backing.
By contrast, the US is often thought of as having a more entrepreneurial culture where you bet big and you win big if it pays off.
There's also more regulation in Europe, which includes things like workers' rights and salaries, which creates a lot more hoops for businesses to jump through.
Ultimately, there's very little businesses can do in Europe to change the environment they're working in.
They can't make everyone speak the same language, they can't suddenly generate billions of euros in seed funding out of thin air, and they certainly can't stop the absolute rockets of huge American companies.
But one thing the EU itself is trying to do, though, is hold back the power of the six gatekeeper companies in big Tech. That's Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, in order to increase the competition in the EU's digital markets.
In fact, the Digital Markets Act, or DMA, has recently come into force and it's designed to do exactly that by setting new obligations for big Tech firms to give more space for emerging companies.
However, it's too soon to tell whether this will actually work or whether it'll end up just stifling growth for European companies even more.
Ultimately, underpinning this topic is a lot of data, whether that's economics, trade patterns, polling or demographics.
A lot of the time with politics you just have to understand the data. So if you want to get a better grasp on these kind of things, I'd recommend Brilliant, and they've just introduced a whole bunch of new data courses which are perfect for learners of any level.
Taking you through everything from Bay Theorem to multiple linear regression. It even uses real data sets from the likes of Starbucks, X and Spotify in order to bring things to life.
I'm not even a super mathematical person and I still found it easy and enjoyable to work through.
And that's because of how Brilliant is designed, built around learning by doing with thousands of interactive lessons in maths, data analysis, programming and AI.
The good thing is that, like I mentioned earlier, you can learn all of these things quickly and easily because Brilliant's courses are split into easy-to-digest chunks.
Brilliant helps you build real knowledge in just minutes a day with fun lessons that you can do whenever you have time, replacing mindless scrolling on the train or while waiting for coffee with something actually stimulating and rewarding.
So get learning across all kinds of STEM subjects for free for a full 30 days by clicking the link in the description.
That way you'll also get 20% off an annual premium subscription, and they'll know that you came from us, which really helps us out.
Vocabulary focus
The vocabulary section introduces key terms from the video essential for discussing business and economic trends. Students will learn and practice words such as "stark" (severe or bare), "languishing" (losing vitality), "behemoth" (a very large organization), "allocate" (to distribute resources), "homogeneous" (uniform in composition), and "regulation" (a rule maintained by authority).
Grammar focus
This lesson highlights the Past Simple Passive ("was / were + past participle"), a crucial structure for describing past actions where the focus is on the action itself or its recipient, rather than the doer. Students will practice identifying and using this passive voice to discuss business events and trends, such as "Skype was bought by Microsoft."
