Digital developments and the recent transition to remote work have made global expansion easier than ever. Now, companies all over the world can offer their goods and services to other countries and cultivate brand-new markets.
Choosing to do so will set them apart from their competitors and ensure long-term success. But only if they cover the six essential steps below. After all, the international arena is often rife with challenges, so it’s wise to prepare accordingly.
1. Select Your Market
Finding the right market is no easy task, especially when there are 195 countries to choose from. How does an executive narrow down their options and pick the best one? More importantly, what does their target audience look like in a different setting?
Odds are good consumers’ interests, needs, beliefs, and traditions will differ from those in the United States, which can complicate things. Therefore, you must research each region to determine which markets are most viable for whatever products you offer.
Once you determine which countries are most promising, narrow them down further by comparing market entrance and size, cost efficiency, resource and labour supply, local regulations, and geographical constraints. For instance, South Korea might sound like a great place to market gold jewellery. However, unless you plan to mine the metal elsewhere, this country may not be a viable option because it’s never been one of Korea’s major industries.
2. Visit Each Country
Visiting viable markets can also aid in narrowing down choices. Of course, doing business online may be easier — and more cost-effective — but making new connections in person will help you establish personal relationships much quicker. Because it’s often difficult to judge personality through a screen, meeting in person may be a wiser option, especially for executives who value cohesion.
Meanwhile, those who have already made their selections might travel to each location in an attempt to better understand cultural nuances. For instance, U.S. executives doing business in China may expect their colleagues to maintain a professional persona when negotiating. However, Chinese businessmen would rather cultivate guanxi and spend time together around a dinner table to establish a strong partnership.
Failing to recognize this significant cultural difference or others early on could result in weak relationships and an even weaker business model.
3. Localize Your Product
To compete in a global marketplace, your products must meet consumers’ needs on an international basis. However, doing so may require that companies alter products to comply with different rules, regulations, and preferences. For instance, cosmetic companies can’t market products that contain coal tar dyes or parabens to Europe because the country has banned these substances. Therefore, they must substitute ingredients if they wish to expand globally.
Of course, how and what you localize will depend on your market and target audience. However, it’s generally good practice to translate packaging, labels, websites, instruction manuals, and marketing campaigns into the native language. If one region has two dialects, confirm which one is more common before sending anything to production.
4. Establish Off-Site Warehousing
As traffic increases and the team begins to expand, some businesses may start to outgrow their current facilities, including the warehouse. At this point, they’d be wise to consider off-site warehousing — both at home and abroad. This solution would allow them to hire more employees, store more equipment, and stock a larger inventory, all of which are essential to making supply meet demand in an ever-fluctuating market.
Establishing off-site warehousing will also ensure overseas customers receive products in a timely manner. Instead of shipping products by freight or air — which is rather expensive — your team can fulfil and ship orders within the shopper’s home country. You might even position the warehouse close to an international airport or post office to expedite the process. As long as your team can keep up, this strategy will inevitably result in fewer bottlenecks, faster delivery times, and happier customers.
5. Leverage Native Experts
Every country has its own rules of engagement, which is why leveraging native experts can be highly beneficial when taking your company global. In fact, connecting with a local globalization specialist can help you realize regulations, customs, and cultural differences more quickly so you can avoid potential pitfalls and achieve success sooner.
Native experts can also help American executives gain valuable insights on engaging their target audience. In this case, you might consider a soft launch complete with free samples, a trial period, and other attractive offers. Ask customers and your local expert for feedback and reassess your progress at the end of each week. Maybe you belong in a more niche market, or maybe current product placement is effective. Either way, a native would be the one to ask about such matters.
6. Use Smart Payment Tools
Complications surrounding currency exchange and varied payment systems prevent many businesses from going global. However, new billing and payment tools are making it easier to develop an international customer base. Now, consumers all over the world can make digital transactions without worrying about exchange rates, taxes, or trade regulations. Some platforms even come with international fraud protection and API integration, which can automate business processes and enhance sharing between international entities.
New developments in smart payment tools also allow businesses to deliver online invoices in various languages and outline fee and tax guidelines for consumers in different countries. These intuitive features can save your team both time and money by anticipating consumers’ needs and answering questions so a customer service representative doesn’t have to.
Laying a Firm Foundation
Global expansion is a tricky topic to cover in just a single article because the process involves so many different factors and complexities. Plus, you may run into more setbacks depending on where you choose to grow your market. However, covering the six steps above will set you on the right track and establish a firm foundation on which to build your international business.
As you do, remember to surround yourself with expert consultants, lawyers, natives, and global entrepreneurs who will support and advise you. Their wisdom will guide you to make the best decisions for your business and ensure long-term success along the way.