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| Just Don’t Do It! |
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Are you completely satisfied with the current performance of you company? Or, have you struggled to consistently meet your goals over time? If you’re like most company owners, chances are you would like to see some level of improvement.
The way the US market is reacting to world economic developments, your best bet is to start making money and sell globally, and do it in a cost-efficient way. This way you minimize risk, diversify your efforts, and start to face reality that by 2020, 80% of your customers will be outside the US. In some industries, the trend is even faster growing. Doesn’t it raise the question of how you are going to survive and thrive in the new economy? The following is an explanation of seven important lessons on what we believe creates global success and what can lead to failure. We are confident this will help you increase your chances of reaching your global expansion goals. Mistake #1: Underestimating the Time Horizon for Your Product/Services Don’t put your plans at risk by budgeting for too short a time horizon. One of the most unpleasant risks is running out of money, after so much work and time have been invested. Be prepared for business to take much longer than you anticipate. There is no set time one can predict and on plan on for things to happen. Unless you build the necessary relationships, it can take a long time to establish the right network and channels of distribution. Mistake #2: Not Having Clear Objectives and a Roadmap Don’t skip this critical step – you can significantly increase your chances of success by starting with researching the market and the competition, setting clear objectives, timelines, milestones and metrics. Make sure you define and target the right market(s) for your product/service, and not only follow the crowds. Also, choose the appropriate mode for entering a particular foreign country and/or region. Not having a good roadmap can turn out to be very costly for your company. Mistake #3: Improperly Judging Risk Understanding your exposure to risk – as well as time horizon and objectives – will help you better plan for success and make better strategic decisions. When conducting transactions across borders, an international business must deal with government restrictions, and find ways to work within the limits imposed by specific governmental interventions in the international trade and investment system. Mistake #4: Confusing Sales with Long Term Business Development How you enter a market and generate your first sales can have a profound implication on just how successful you will be in the long run. Mistake #5: Forgetting the Fundamental Importance of Cultural Differences There is no one way of doing business, and the American way is definitely not the only way. When venturing globally, one has to be sensitive to nuances in order to get the deal done. Many business transactions were halted or terminated due to cultural misunderstandings, or to be a bit blunt, cultural ignorance. Managers in an international business environment must not only be sensitive to cultural and language differences, but they must also adopt the appropriate policies and strategies for coping with them. Mistake #6: Making Decisions Based Only on Widely Known Information One size does not fit all. One has to follow a strategy that fits their product/service, business objectives and corporate culture and then match it with the appropriate country and/or region. Differences among countries require that an international business vary its practices by country. Marketing a product in Venezuela may require a different approach from marketing the produce in Switzerland; managing US workers might require different skills than managing Egyptian workers. Maintaining close relations with a particular level of government may be very important in Mexico and irrelevant in the UK. If you disregard one component of this important triangle, you are sure to dramatically increase your chances for failure. Mistake #7: Being Overconfident in Your Global Expansion Skills Seek professional advice to navigate the unknown and use other people’s experience to help you succeed and follow a smooth road. A little humility goes a long way in combating the overconfidence error. Remember that what got you to be successful in the US, in most cases won’t get you there. At the most fundamental level, the differences arise from the simple fact that countries are different. Countries differ in their cultures, political systems, economic systems, legal systems, and levels of economic development. Many of these differences are very profound and enduring. |