5 - Early internationalisation and the growth of overseas markets 1909–1939

Summary

From an early date the Nathan family, with their international merchandising expertise, saw the possibilities of selling Glaxo powder in markets outside Britain and New Zealand. Agents were appointed in some countries before the outbreak of the First World War and by 1914 exports represented more than a third of the turnover of Glaxo powder. The shortage of Glaxo supplies (and sometimes their poor quality) almost destroyed the trade during the war and prevented further development in the immediate post-war years. The export business started to revive in 1922 and by 1925 had grown to represent nearly a half of the value of the Glaxo department's total turnover.

There was in the earlier years a division of international marketing responsibility between the London and Wellington offices. Its exact details are unclear, but Alec Nathan wrote in 1919 ‘that if the strict word of the arrangement was kept, [London] should not be able to do any Export Business except with South America and Spain’. In both those countries London had appointed agents before 1914.

As the business developed the Nathans were forced to begin limited local production when protective tariffs or other discriminatory regulations, intended by governments to develop local productive expertise, were introduced. The diversification into pharmaceuticals also stimulated the establishment of manufacturing capacity overseas; vitamin products were highly suitable for local production, since they could be produced on a small scale for a modest cost in capital equipment and staff.