International Expansion and Global Expansions
International Expansion/Global Expansions
International Expansion is daring and demanding endeavor which demands a clear strategy and goal. Not all companies are capable or a good fit to start expanding internationally therefor a good strategy and good research is required. When starting to expand there are a number factors that can make your expansion a success or a failure. Here we sum up a number to do and pitfalls I’ve learned over the years. Of course we can help you to prevent pitfalls and start your Global Expansion even faster.
Keep in mind that whatever your selling you will need some serious budget to start in a new country. Prepare for spending more then you anticipated in many cases breaking in a new market is a case perseverance. People might not be waiting for your product and not always see the benefits right away also it takes a lot of time to earn trust from consumers and companies but don't let this let you down the benefits will far over exceed the risks.
4 Things what you really not want to do when starting your International Expansion/Global Expansion
1. Don’t rely on one international business partner
Don’t start with one Distributor/Agent and expect him to cover a whole Geographic region. Distributors and Agents usually sell a number of different products the products they currently sell actively are very profitable for them and in a lot cases the reason of there existence. To gain time for your product ranges they will have to be committed to invest in your product or it has to be added value to their existing product range. One way or another selling through distribution or agents demands an investment from both make sure clarify this for yourself and your distributor to see if you have a good fit.
2. Your brand (-name) is not a USP.
It looks self explanatory that you should take good considerations about what your unique selling points are but more often I still see companies listing there brand name as a USP. The fact that your are International Expanding should mean that nobody in other countries from your home market knows your brand. The fact that you still list it as a USP should raise the question “what are my USP?” as clearly you can not list enough USP’s to set your company/product apart from competitors.
3. Don’t set Targets.
I know your company works with sales targets and you expect a monthly or even weekly report on forecast and actual sales but with and International Expansion these targets mean nothing. If you have report to the board about you progress use more rudimental targets like amount leads generated, meetings set or phases of your strategy.
4. Keep in touch.
Find out what your customer expects from you to many times we see people making contact having one meeting and expect PO in return. The reality is unfortunately very different customers expect multiple contacts before the start trusting you. Even though you might be the best pick and most innovating company they still expect some confirmation. This depends on the type product you are selling. Products which are very capital intensive need more contacts for a sale then low cost commodities.
4 Thing you need to do when starting your International Expansion/Global Expansion
I know it is said and will has been said again but research as much as you can. Research competitors, country specific regulations and expected level of support. Talk to potential customers do interviews with market experts get quotes on export costs, VAT and Duties. Don’t make assumptions on your products range, prices may verify across countries for instance Eastern Europe will have lower budget thus lower prices in comparable with western Europe while the middle east is willing to pay more in general.
2. Determine you Market Entry Strategy
Depend on your research what is your strategy going to be. This is the first and most important step. For example do you want start a Greenfield strategy setting up your facilities by yourself and generating direct sales. Or do decide the purchase a competitor or a closely related company that already has the right facility and contacts? The strategy can also change over time. I have seen numerous companies that change their strategy as they go.
Set clear goals not sales goals but goals in terms of deliverables. For instance a goal could be to have a least one distributor and one warehouse in Germany setup or another goal could be going through the sales process in one specific country with a least one potential customer. These first steps are very educational and a lot harder then you think. Goals can also be Marketing related: Setup a multi-lingual website for at least 3 countries or exhibit on 2 International Trade Shows.
4. Set limits
Set limits on what you want to spend. Some companies spend large amounts of money because the board determine the strategy and management is just blindly fulfilling the strategy. If the market is not a good fit for your products you have to be willing to admit it and either change your strategy through acquisition or by going back to drawing board and redesign your product so it does fit the market. Admitting your product is not a good fit for the market is not a defeat as many would consider but just new information to on which you can learn to make a better product. The most successful companies understand this and know when to stop pushing and start redesigning and in the process create even better products in their already existing markets.
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