Your company is now stable and profitable. You’ve grown substantially in your home market. Now, it’s time to consider expanding internationally. It’s an exciting time. However, while the potential for great success is there, so is the potential for failure.
There are many things to consider before you get started. One of the most important is whether or not you should take this leap in the first place. If the answer is yes, then where should you start? The strategies below will help you to prepare for global expansion.
Local and international business environment of a firm
Before you go global, it’s imperative that you have a thorough knowledge of your company, and your industry. It’s not enough to understand what you have to offer in your home market, you have to understand your new markets as well. If you don’t, it will be nearly impossible to position your business for success.
First, consider the local. You can’t penetrate the market if you aren’t able to convince the local population that what you have to offer is a better value than what they’re already purchasing. Your insights into your own company will help you to identify what you need to develop in order to appeal to a new customer base.
You know how your industry works in the market you are currently in, but do you understand how it works in your target market? Remember that you’ll likely deal with different tax structures, licensing requirements, and regulations. You may also be confronted with cultural differences in the way that people conduct business with one another. For example, the process of negotiation can look very different from one country to the next.
Ensure that you have a market for your product in other countries
Global expansion only works if you have something to offer that people in those markets want. This means conducting extensive research into the markets in which you plan to expand. You are most likely to find success in marketplaces where your target consumer closely matches your current audience.
Another thing to consider is the viability of your company in other markets. Take Alibaba as an example. The company is currently making experts expand globally. While it’s been a great success as an e-commerce giant in China, there are concerns about their ability to expand operations to the United States. Many of these concerns involve the issue of trust. Unfortunately, the company has developed a reputation as a ‘hub for counterfeiters’. This will and should serve as a serious roadblock to success.
Before expanding internationally, startup owners should consider their company’s history and established values. Then, examine the values and cultural standards of the markets in which they wish to expand. Even if they haven’t done anything legally or morally wrong in their current markets, there is a possibility that things they have done could be seen as offensive in other markets.
Adapt your product to local marketplaces
American restaurant chain Tony Roma’s has successfully expanded into several international markets. Recently, they’ve begun a very successful run in Malaysia. One key to their success has been a willingness to adjust their product offerings to new markets. For example, in order to accommodate local tastes in Malaysia, they’ve added lamb ribs to their menu.
Unfortunately, not all companies are quite as successful. While big-box electronics retailer Best Buy has done very well in the United States. That wasn’t the case when the company attempted to expand into Europe. They failed to take into consideration the shopping preferences of European consumers. For one, they strongly prefer shopping in smaller stores rather than big-box stores. Ultimately, Best Buy shuttered its operations in Europe.
Even search engine giant Google has struggled at times. In fact, in spite of being the search engine of choice in so many markets, Google has failed to gain traction in China. Instead, they lag in popularity behind Baidu. This is because Baidu’s search engine algorithms are specifically created to curate results that more closely match the preferences of the average Chinese user.
Make sure your existing business model translates into new markets
Once you’ve clarified that you have a market for your company and you’ve made any necessary adjustments to your products, it’s time to get your message out.
Next, you’ll need to put that knowledge into action. For this, it’s best to rely on the professionals. They can help you with the following important tasks.
- Localising your mobile apps
- Translating web content
- Setting up multilingual landing pages and other content
- Localising and translating advertisements and commercials.
The importance of website localisation especially should not be ignored. Canada based ITIC Software recently required help with this. According to the owner, they knew that quality localisation would be key in expanding to a global level. The Word Point gave them the help they needed. As a result, their international market has expanded significantly.
If your company is still in its infancy, it’s never too soon to think about expanding globally. Drew Fortin, VP of marketing at PI International recommends considering globalisation when you create your initial website templates.
Get the right team together
Your globalisation team will consist of several people. First, there will be the internal staff members who have the most knowledge of your products and operations. You’ll also need to work with staff and contractors in your new market to help ensure that your expansion goes as smoothly as possible. They will be able to help you to understand your new market, and assist you in connecting with business partners that are in the best position to help with your expansion.
Finally, don’t dismiss the importance of creating ‘buzz’ among local populations about your brand and your products. For example, when Cellairis expanded into Kingston, Jamaica, they worked hard to recruit brand ambassadors. Their grand opening was a dance hall style gala. Their success is largely because they sought to understand what would be most appealing to their new audiences, and involved local citizens in the process.
If you plan to expand your business internationally, be aware that this is a time and resource-intensive process. Failure can be devastating. On the other hand, when it’s successful, it can be quite lucrative. Following the strategies above will help you to determine whether or not global expansion is right for your brand, and how to get ready for your next steps.