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International Business Expansion

Questions and insights

From the UK to USA and beyond

For a small and medium business international expansion can be an exiting time and inject new energy and vitality into the life of a company. Visions of year on year near linear sales growth, unrivalled global dominance, the product deployed in many far away exotic places pervade the executive stratosphere!

However, international expansion is also a risky endeavor, particularly for a small to medium business. Knowing when and how to expand into new markets, particularly international markets, is a vital turning point. It has the potential to make or break a company. Informed by this prospect international expansion requires nerve, investment, planning and flexible determined

The attractiveness of being an interim is the variety of clients I have had the pleasure of working with. Many assignments have been challenging and compelling. This is particularly true of small and medium business (SMB) clients who have decided that international expansion is the key to success.

For some international expansion is an imperative for success. A saturated and competitive home market, the prohibitive costs of developing new products and the high risk of diversification, lead many SMBs to look abroad for growth. Sell the same product to more customers is the executive mantra!

Based on many years of international experience here are some initial simple questions and insights to consider.

  • Is your home market really that bad? Ensure that you have truly exploited the full potential of your home market and that international expansion is not simply the fantasy of the “grass being greener and more plentiful on the other side”. International expansion is costly, risky and will require a change in the operational capabilities of the company.
  • Which countries are easier to enter? Initially choose and enter countries where you have some form of close strategic cultural synergy and geographical proximity. Consider countries where you are able to initially provide rapid and effective support from your home country and where your product requires little if any localization. Enter a few countries at a time, learn from each market entry experience adapt your company position accordingly. Take baby steps, walk and then run.
  • Is Globalization global? Answer No! Some countries find it difficult to buy product from certain other countries. Do not assume that you can overcome this without some form of additional market positioning and a localized presence or resources. Deploy flexible and where possible in country resources using outsource companies, partners, associates and consultants to establish your first 'beach head' accounts or channel partners. This is a low cost, low risk deployment strategy which you can adapt and change quickly depending on changing or unexpected market conditions.
  • Can you change direction quickly? Despite the best market information gathered you will never know if you should be in that market until you have entered it. Nor will you be able to predict the competitive response. Expect the unexpected and respond rapidly to correct your position even if that means pulling out of a market.
  • Is your value proposition and market message clear and straightforward? You only get one chance to make a first impression. Make your value proposition simple and clear. Also and vitally, it really makes a difference if you are able to present your key company and product information in the local language. It does not need to be all of it just the key important messages and information. No one wants to do business with a vendor who appears to be lazy or remiss in relation to local requirements, tastes and customs.

Paolo Di Leo

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