I have been fortunate these past 10 years to mentor a promising international marketing professional. “Quinn” recently went back to university to complete his international MBA. He just accepted a position in Tennessee where he will be building international channels from the ground up in B2B & B2C markets. It’s an exciting opportunity for anyone in our field of international marketing.
Quinn knew where to start when he was hired last month. He worked with engineering to define the product changes required in order to meet international standards (CE, etc.). He developed a selection criteria to pick the right early international markets where the company would focus resources (UAE, Mexico & Australia). He identified a freight forwarder who will provide the right kinds of logistic support. And he started to identify opportunities to meet the right kinds of in-country partners to facilitate business deals and new client acquisition. Quinn seems to be on the right track towards providing a solid foundation to his international expansion.
But others are often not so fortunate. What is much more common to find are one or more of the following false assumptions underlying early-stage expansion decision making. A failed international expansion can scare a company’s leadership for years away from what should be lucrative international markets.
Assumption #1: We are focusing on the right markets.
To get to the heart of where this assumption can steer leaders astray, ask the question “how did we come to decide on which countries to expand to first?” In Quinn’s case some of the main factors were: one or more hot weather seasons and markets that could serve as a gateway to a larger region. Mexico is a great entry country to Latin America and the Caribbean. The UAE is closely economically linked to the rest of the Middle East. And Australia has New Zealand and Southeast Asia as neighboring trade partners.
Often companies instead choose countries where they have a contact or is a key staff member’s country of origin. Companies might follow a language to markets that really don’t make sense based on a more strategic criteria that focuses on long-term profitability.
Assumption #2: Our staff is ready to engage with international clients and partners.
To find out if your staff is ready, start with questions like: “Who on staff has experience working with international clients?” “How does staff feel about taking on international clients?” While the international expansion leader may be excited about his role, this does not mean that others share his background or attitudes.
Be sure that staff hear about the importance of the international expansion from company leaders. Informally, the international expansion leader should be having conversations to hear any concerns or questions from colleagues. After all, there is nothing worse than generating international sales leads only to have sales reps quietly leave international calls unreturned.
Assumption #3: Business moves at the same speed everywhere.
In my home country, the U.S., we typically create partnerships and close sales deals faster than in other countries. Now before you pat yourselves on the backs about our superior business skills and efficiency, please understand that this does not mean that ours are always well-built deals. In fact, misunderstandings and untrusting partners are far less likely to yield the same long-term profitability.
You can ask yourself, “Does my entire leadership team understand that the international expansion will move slower than we may be used to in our home market?” “Am I willing to invest in direct professional relationships including in-person visits to solidify and maintain strong and successful business ties?”
Assumption #4: The same rules apply… everywhere.
Definitely no. This is one of the biggest challenges in international business. The rules most definitely change based on country and local market. Rules that change include product standards, packaging requirements, forbidden marketing tactics, expectations of “gifts”, and how local businesspeople conduct themselves.
To prepare for these new rules, definitely do your research before that first contact. There are many sources of culture and legal information available online. There are also consultants who specialize in a particular region or country who can help.
Assumption #5: We already have all the answers.
There are international business professionals who spend a great deal of time staying current on how to do business effectively around the world. And they don’t even have all of the answers. What the great ones have is a strong network of resources who specialize in areas of international business and geographic regions.
As a company leader, ask yourself “what do we need to know in order to be successful and lower our exposure to risk?” “what areas are we already experiencing challenges?” Again, you can save budget by doing online research with reputable sources or else hire competent international expansion specialists.
Either way, your company will be much better positioned to reach its full global potential!
I hope you found this article useful. For more Tips and Tools from Becky DeStigter, The International Entrepreneur, sign up here.