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Strategic Planning for Successful International Expansion As international leaders in innovation, it is important for businesses in the US to look at the world from a fresh angle, as well as with a different perspective. “A global mindset is the opposite of economic isolationism. We are part of the globe, and should stop looking inward, but look out,” former Secretary of Commerce Carlos Gutierrez once commented. It’s time for U.S. businesses to take the next step internationally, through the development of a winning expansion strategy – a rational approach that eliminates surprises and gets it right the first time. After all, there is no challenge too great for a country that has proven itself over and over again. So, let’s start the journey. 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 expansions just that, an expansion of their existing business. Instead, it is important to approach globalization as an entirely new enterprise: an enterprise worthy of all the money, time and sweat equity used for getting domestic startups running successfully. Globalization needs to be fully incorporated into the overall corporate strategy and not treated as a disjointed side business. We interviewed 74 companies that made an attempt to go global and did not succeed. These companies are now looking to understand how they can succeed expanding internationally, and tackle global markets in a strategic and structured manner, as opposed to an opportunistic way. Top challenges companies face: 1. Overseas acquisitions fail to deliver 2. They struggle to expand lacking the knowledge and data as to where in the world they should go and what tactics to implement 3. Money and management effort is wasted, often because of unsophisticated management approaches The main reasons companies face these challenges: 1. Unclear strategic direction 2. Underestimated risk 3. Poor alignment between vision, mission, resources, strategy and operations How can companies overcome these challenges? 1. Have a clear strategic intent and measurement tools. Continuously. Understand internal structure, national operations and align them with global strategy Identify the markets, customize product lines and supply chain 2. Make sure all employees are aware of the global vision, understand and accept the differences in doing business 3. Design global programs that are appealing to your global customers Make sure there is a cultural fit in terms of values and product design Understand what it takes to develop a competitive advantage in these markets 4. Assess risk and focus on opportunities Success in the home market is not a guarantee to global success Make sure the expansion doesn’t get “a life of its own”, and that good money doesn’t follow bad The new frontier is that there is no frontier – how small to middle-market businesses respond to this reality may have a significant impact on the economy as a whole. Savvy entrepreneurs will likely see opportunity where others see impasse. Accordingly, while some business people will look at the current economic crises as an excuse to enter a holding pattern, entrepreneurs will see the culmination of a perfect storm. Today, the value of the U.S. dollar makes our country’s goods and services far more competitive abroad. So, what are you waiting for? Now is the time to control where you want your business to be so your company is not like a jellyfish adrift on the tides. |