In an increasingly networked business environment, global markets are now a part of a small business’s roadmap to success. This is partially due to the shrinking of the world that’s been caused by social media and the internet in general – foreign markets are becoming decisively less foreign, which means that opportunities to sell in new regions are cropping up with consistency.
Opting to expand business into global markets means that a company will be tackling a much larger piece of the pie than is already available in the consistently burgeoning US market. Going global is an excellent vector for growth, but make no mistake: expanding into new markets this way will shake up your existing business processes, so we’ve created this guide to help you streamline the process.
Expansion requires creativity and the ability to be flexible enough to see profits and growth opportunity where you never thought they’d be.
Expanding into Global Markets Requires Flexibility
An example of legendary growth can be found in the case of Owe Bergsten, who, in the early 1980s, made a trip to Asia to find new business opportunities for his small Swiss electronics shop. Bergsten encountered Nintendo’s Game & Watch line, and as a result of a few intelligent moves, his business became one of the largest distributors of Nintendo products in Europe. This wasn’t an overnight process, but because he had the wherewithal to get to learn Japanese culture and get to know Nintendo reps personally, success came in a big way.
As with Bergsten, there are going to be hurdles to overcome and essential questions to ask. For example, what is the demand for your business offering in your new target market? Are the cultural aspects that may slow down the process of gaining a foothold in the new market? Who are your main competitors and what advantages do they have?
With these hurdles in mind, there are also some significant advantages. For example, pushing into foreign markets is a fantastic method of extending the life of locally-popular products. International markets may not be nearly as familiar with your products and services as local markets are, so this is a potential “lightning striking twice” opportunity.
In the United States, Kit-Kat bars are taken for granted, but in Japan, they have really taken off. Currently, there are 80 different flavors of Kit-Kat, which is a great illustrator of how something that has a popularity that’s waned in one market can take on new life in another.
This is also a great way of extending the power of demand cycles because when one market slows down, you can supplement sales and opportunities by booms in other markets. Effectively, this expansion will help a business avoid becoming overly dependent on a single market’s sometimes challenging sales funnel. Consider this: While a company may be making less money on heavy coats in the summer in Massachusetts, there’s still a market for those items in New Zealand because the seasons are reversed down there.
Based on a study from the Harvard Business Review, it can take as long as five years before a business will start seeing a healthy Return on Assets (ROA). Let’s take a look at 10 steps that can help you become more profitable, faster.
10 Tips for Expanding Your Business Globally
There are some definitive methods for growing your business globally, though the details will vary for any business. Some methodologies will work better for some businesses than others, but there are a few tried-and-true techniques that will help any company.
1. Identify Your Potential Customers and Market
Research is the most critical step for due diligence .. You’ll need to perform a market segmentation analysis first, which will effectively break up the market’s audience into naturally-occurring or artificial segments. This is important because it will establish what steps you’ll need to take to effectively sell your goods or services in the market.
Next, it’s crucial to determine what local products or services are available in the market that might compete with yours. This is called a product gap analysis, and it helps you determine how easy it will be to penetrate the local market with your offering.
Finally, creating a beachhead team helps you breach into a global market. A beachhead team will be a team that specializes in quickly learning about various markets and adjusting initiatives to fit what’s expected by the locals.
These teams may take a moment to develop, but as you expand globally, their skill set will improve so that expanding into new markets will become more comfortable as you scale upwards. Beachhead teams are also great for determining if a product will have to be localized extensively to increase the chance of a sale.
2. Learn Finance and Compliance Regulations
A beachhead team can perform the appropriate research when it comes to determining customs, laws, regulatory procedures, and compliance rules in target markets. This will help your company avoid any foibles when it comes to attaining certifications or coming up against compliance laws in the target country.
It’s also a great idea to establish relationships with local banking institutions. This will help your company develop a methodology for dealing with profits from foreign markets. It’s important to understand that profits earned in foreign economies may need to be converted back into US dollars from the local currency.
Since there are corporate taxes associated with this, some companies opt to not engage in currency repatriation since this can significantly reduce profitability. Local banks can help you manage your finances and determine what to do with profits.
Most importantly, keeping abreast of government compliance rules and regulations for business is one of your most important steps. Some territories are known for extensive legal standards for business, so having a local legal team of your own to help you navigate through local processes is essential. Your team must review industry-specific regulations as well as general business regulations before even going to market.
3. Learn to Communicate Beyond Language
American business logic doesn’t necessarily translate well into foreign markets. Take a good look at your product or service – is there a market for it in the overseas location you’re considering?
Don’t go into a market thinking that if it works in the US, it’ll work in your new target market. You may need to tailor your sales strategy so that it fits the cultural landscape of the new market. Remember, a campaign that would seem perfect domestically may offend audiences abroad.
In addition, the opposite may also be true – products that may not work locally may be well-received in other markets, which can open up some excellent opportunities for products that may have been a bust in the US.
Finally, when making deals, don’t forget that body language and business etiquette aren’t universal – a gesture that has a particular meaning in the US doesn’t necessarily mean the same thing overseas.
It’s critical that you and your team understand the meanings of local gestures so that you don’t dismiss opportunities out of hand or put more faith in a situation that could be a dead end. A good example of this is the classic “thumbs up.” In Bangladesh, this can be a direct insult and directly hinder your chances of making a deal. For this reason, a certain degree of discipline and due diligence is going to be needed so that you don’t offend your potential partners.
4. Prepare Your Products
The last thing you want or need is for a product to have all of the regulatory and processing requirements completed but to have something holding it back from going to market. For example, many have heard about the legendary faux pas of the Chevy Nova and supposedly stymied sales because “Nova” means “no go” in Spanish. While this is an urban legend, it still speaks volumes about the need to take all of the necessary localization steps before starting in a new global market.
In addition, one step that some neglect is adequate trademarking; copyright is different from country to country, and unlicensed copies appearing throughout your new market will reduce your profitability. Make sure that your product is trademarked correctly to avoid this potentially disastrous issue.
5. Penetrate Global Markets
As with any business process, you’re going to need to deeply strategize to establish your brand presence in the foreign market. A good way to ensure good localization of your brand is to make sure that your company is accessible as possible in the new country. For example, cloud PBX can help you create virtual local numbers that use familiar phone prefixes, which locals can use to access your salespeople.
Consider creating a completely new brand to fit the new market. Sometimes, this is a useful strategy that you can use to sell your existing products.
Finally, you’ll need to establish an authority in this new market Creating ads, hiring a dynamic sales team that specializes in the new territory, and even hosting local language webinars for customers and potential partners can establish your presence in the foreign market.
6. Provide Your Team with the Right Tools
Some companies opt to transfer teams over to the new markets to ply their same business practices in a new part of the world. The time it takes for the team to adequately acclimate to the unique culture and language can be stymieing, so seek out local team members who understand the market. They will already understand the area and can use that knowledge to sell your company’s unique traits to the locals.
How can you find a competitive team to represent your brand abroad? This is where competitive benefits can make a difference – stand out from your local competitors by offering better programs for qualified salespeople.
Also, don’t underestimate the power of unified communications. With solutions like 8×8, Nextiva, and PanTerra Networks, disparate business teams can more easily collaborate across the globe. This sort of collaboration can work well despite time differences, especially with technology and translation software that can bring teams more in-line despite geographical differences.
7. Investigate the Local Competition
If there are organizations in the new territory offering similar products or services to yours, you’ll be in for a fight. For this reason, you need to have a firm accounting of the local competitive landscape so that you can determine which angles will work best for promoting your business as a better alternative.
Research what strategies seem to work well for these competitors and use them yourself if they are compatible with your business plan. What doesn’t work so well? What’s the local criticism of that business? These steps will gradually convert your competitor’s customers to your own.
Don’t be afraid to utilize tools like customer satisfaction surveys. These can also help you lock in on what needs to be done in a market to outcompete other businesses as well.
8. Research Potential Partners
In addition to figuring out who else exists in your brand’s space, it’s also critical to figure out what businesses in the local landscape can support your organization. For example, if you have an eCommerce business, who are the domestic delivery companies, and can a partnership with these companies shave off some of the overhead costs of delivery?
Local partners also have install bases that you can leverage to get more traction for your brand in this new market. It’s this support ecosystem that can help a new brand cross-pollinate and establish a foothold in a global market with a reduced waiting period. These partners will also understand the market better, and understanding like this can be valuable for a partnership.
You’ll need to establish an internal alliance team to actively seek out these partnerships and ensure that existing partnerships are well-maintained.
9. Move at the Appropriate Pace for the Market
The US is a bustling market where the “you snooze, you lose” adage prevails, but there are markets that run at a different pace than most American businesspeople are accustomed to. For this reason, adaptability is the name of the game – partners and customers will move at a pace comfortable to their culture, so be ready to pick up on their needs and move appropriately.
Keep in mind that business tends to be a more personal experience overseas, so things may take longer, but the relationships can be permanent. Once a business relationship has been established, usually after several transactions, a firm foundation of trust will be formed.
10. Perfect Your Customer Service Experience
An A+ customer service experience ensures that the new market takes well to your product or service. Use the abovementioned competitive benefits to attract the right sales teams that will provide excellent customer experiences for the locals.
Several communications technologies can help your sales teams more easily interact with locals and meet their needs. Consider solutions like AI translation, call priority queuing, and CRM tools to ensure that the market is being well-managed on a customer level.
You’ll need a team that’s ready to deal with different time zones if you’re going to be a global organization. In some situations, some customers may reach out to you from locations that are 12 hours different, so it’s important to have around-the-clock support to ensure that issues are resolved, and customers come away content with the service they received.
To manage the time zones, consider utilizing an auto-attendant system, which is an automated system that will help walk your customers through your menu options. These systems can help customers quickly resolve issues, or they can be used to gather information for your agents to utilize when they are transferred.
Additionally, AI-assisted translation solutions are also making waves and can help your agents deal with the needs of foreign language leads. Effectively, it’s all about quality customer experience management, and fortunately, there are several solutions on the market to ensure a great customer service experience.
There are No Shortcuts to Expanding Your Business
When employing the right strategies to expand your business into foreign markets, you’ll be amazed at how performing the correct footwork can make a difference. Being active in global markets will help you ride out cycles of slowing down sales domestically, and as a global brand, your authority will be significantly increased in your vertical.
Emergent tech like AI and cloud PBX are also great ways to make more globally-dispersed organizations seem much smaller for both team members and customers. Check out our enterprise VoIP page to see what kinds of tech is out there that can make your expansion into global markets more streamlined.