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| International Business Development: Do You Have A Plan? |
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In the not too distant future, U.S. businesses will be placed into one of two categories: those that skilfully entered into the global marketplace and those that sheepishly exited out of business. A wait and see mindset is nothing short of organizational suicide. On the other hand, a reactionary, ill-conceived global expansion is no improvement. That too spells disaster. What’s needed? Start with a mindset overhaul, fuel it with 100 percent commitment and do your homework – none of which should be any secret to entrepreneurs who’ve launched successful domestic businesses. As Bill Gates reminds us though, “success is a lousy teacher; it seduces smart people into thinking they can’t lose.” Consequently, many “smart” business people approach global expansion as just that, an expansion of their existing business. Instead, it is important for U.S. businesses to approach globalization as an entirely new enterprise: an enterprise worthy of all the money, time and sweat equity dedicated to getting domestic start-ups running successfully. At the same time, globalization needs to be fully incorporated into the overall corporate strategy and not treated as a disjointed side business. No short-cuts, no resting on past laurels and no more excuses. Where In The World Should You Go? With more than two-hundred countries to examine for global expansion opportunities, and with a group of ‘hot’ markets and emerging economies that have future promise, the first question to answer is, “where will my product or service find its highest demand?” Finding the answer to this question requires a leader to step-back and take a panoramic view of all potential markets. Then, investigate the most promising markets with a more detailed and focused emphasis on important criteria such as infrastructure, standard of living, economic/political stability and general attitude towards foreign investment. Make use of available information that is relevant to your business to help guide the decision making process regarding which markets will yield the greatest demand and warrant further consideration. However, demand itself is not enough to ensure a success. In addition to looking outside at potential opportunities and demand, it is equally critical to look internally at the corporate commitment to globalization. Conduct an honest self assessment and evaluate internal resources such as motivation, goals, talent, budgetary constraints and tolerance for risk. Nor is corporate size a guarantee for success. Today’s decentralization and technological advances have leveled the global playing field, allowing plenty of room for both small and middle-market entrants. In fact, the agility of small to middle market corporations challenges their less nimble, larger competitors in the race for international market share. Engage, Commit and Identify with the World Penetrating and developing an international market requires an entrepreneurial philosophy and drive– the same kind of philosophy and drive behind every successful start-up business. Following that logic, American businesses – birthplace of the entrepreneurial spirit – should perform well in global business. Right? Wrong. American businesses fail at a rate three to four times the rate of other countries in their ability to expand internationally, and the majority of U.S. businesses never make an attempt. One reason for this conundrum is an overall lack of willingness to engage, commit and really identify with the global marketplace. After all, the size of America’s market afforded U.S. businesses the luxury of complacency for many years. Not surprisingly, many American businesses continue to hold back on foreign investment, fail to commit the necessary resources, and make only limited advances in global expansion – all in an effort to reduce risk. Ironically, this effort to reduce risk forfeits opportunities and almost always guarantees a failure. Such an approach is contrary to what all entrepreneurs know about sowing seeds of success and starting a new business. Worthwhile investments involve risk – risk that must be anticipated, understood, calculated and planned for through the analysis of actionable data. Rather predictably, U.S. companies approach foreign markets with a sales-push mentality. They offer a product or service that has achieved great success domestically hoping that it will appeal to the local population. Unfortunately, hope is not an effective strategy, and many U.S. businesses have lost hope trying to figure out what went wrong – why didn’t the local population respond more positively? A better strategy is to focus on facts and actionable data upfront, consider cultural differences and allow the data to guide the decision making process. Set realistic expectations based on data, case studies and other relevant information. Get the necessary help from experts who have “been there and done that” and offer the indispensable perspective to avoid costly mistakes. Learn what to do, focus on success, seek opportunities while managing the fear and obstacles. Most importantly, do your homework. |