Global growth and expansion is the antidote for shrinking domestic markets. It offers unparalleled opportunity for growth, increased sales, diversified markets, and improved profit. US companies must pay attention to international markets for their products and services and take advantage of amazing growth opportunities. Unfortunately, many US businesses gaze with trepidation at the process and surrender to fear before making an earnest effort.
Locke, the former Secretary of Commerce stated: “With traditional drivers of U.S. economic growth like consumer and business spending facing stiff headwinds, it has never been more important for our companies to increase their sales to the 95% of the world’s consumers who live outside the United States.” Not to neglecting the fact that 73% of the purchasing power is outside of the US. How do you plan to take advantage of that?
Every company can increase its sales dramatically when going global
Today, businesses are being placed into one of two categories: those that skillfully enter into the global marketplace and those that sheepishly exit out of business. A wait-and-see mindset is nothing short of organizational suicide. However, a reactionary, ill-conceived global expansion is no improvement. That, too, spells disaster.
Tapping into this large pool of opportunities requires a bit of work to refine your skills, adjust your mindset, reaffirm your focus, and retest the strategy while modifying the direction as needed, in a global context.
There are three main reasons to start planning your international path now:
1. The real growth trends are outside the US.
2. It isn’t a choice anymore. Your competitors are doing business in the US and are gaining market share, so whether you are aware of it or not, you are competing globally.
3. Like every investment portfolio, you need to diversify, and by balancing domestic and international markets, you manage risk and leverage growth opportunities.
Focus on Success and Avoid Top Three Costly Mistakes
In order to create a framework that enables you to see, identify, respond, think, plan and operate strategically, beware of the top 3 mistakes companies make when going global:
Mistake 1: Lacking Clear Objectives
The reason to go global must come from a legitimate need to change that is based on accurate data, starting with the present and looking into the future. It begins with asking the right questions. Don’t skip this critical step. You can significantly increase your likelihood of success by researching the market and the competition and setting clear objectives, timelines, milestones, and metrics and using this research to create a roadmap to success. And of course, all this information has to be analyzed and interpreted in context, and aligned with the local culture, politics, financial system, and more. Data alone will not suffice. Make sure you define the right target market(s) for your product or service and choose the appropriate mode of entry.
Mistake 2: Forgetting the Fundamental Importance of Cultural Differences
Be sensitive to cultural nuances. I’ve witnessed many business transactions that come to a screeching halt and fall apart due to cultural misunderstandings and cultural ignorance. Don’t assume anything, and do your homework. Business people in an international business environment must not only be sensitive to differences in culture and language, but they must also learn to adopt the appropriate policies and strategies for coping with these differences. This will affect the outcomes of the negotiations, agreements and business structure.
Mistake 3: Underestimating the Time to Market for Your Product/Services
Don’t put expansion plans at risk by budgeting too short a timeline. When this happens, inevitably, the business depletes available capital and the upfront investment of time and money is wasted while your international reputation is blemished. Resist the temptation to be overly optimistic. Look at the Ease of Doing Business (EODB) index for planning purposes, and focus on interpreting that information correctly and analyzing how it will affect your specific business plans, using your resources, vision and long-term plan. You cannot put a time frame or price tag on building relationships and trust.
Focus on Opportunities, Not Obstacles
Ultimately, a successful global expansion is dependent on a company’s ability to view the world in a new way. In this increasingly complex and competitive global environment exceptional skill is then needed to evaluate the options, manage the risks and execute a winning growth strategy. Instead of gazing with fear at the process, focus with excitement and starry eyes at the opportunities and, most importantly, plan for success.
Winners will reap the benefits, while expanding and executing growth strategies more quickly and more effectively than their competitors. Be fast, flexible, innovative, motivated and enjoy the adventure! It’s a big world out there with lots of potential for businesses with a keen entrepreneurial spirit.
Includes excerpts from Grow Globally: Opportunities for Your Middle-Market Company Around the World. Copyright (c) 2011 by Mona Pearl. Reprinted with permission of John Wiley & Sons, Inc.