Navigating the complex terrain of international expansion?

Navigating the complex terrain of international expansion??

The ultimate question often arises in many conversations with businesses wanting to scale and expand: How and where should we extend our business overseas to bolster growth and traction?

Such an inquiry would warrant a comprehensive response that embraces multifaceted considerations from my extensive international experience over the decades, beginning with my first role in System X's export department in 1982. I have penned numerous articles and even a book on the subject, enriching my insight further.

Various elements come into play while deciding your expansion strategy, from the similarity of your targeted sector to your home market to its global development status. Furthermore, the degree of product localisation required - not just for the product itself but also the supporting material and activities - needs thorough examination.

Potential channel strategies can mitigate the risk of financing the establishment of new business entities in each market. Several options include distribution, partnerships, joint ventures, acquisitions, and local entities. Each carries its merits and drawbacks, which must be scrutinized to comprehend the associated risks.

I think it could be to engage a consultant to help you evaluate the markets you are considering targeting. Once you have shortlisted the potential markets, partnering with a distributor could aid in a more in-depth assessment of the market opportunity and the essential product localisation required.

Due to minimal language localisation requirements, software companies often eye the US as an initial expansion target. However, it's vital to understand local sector processes and regulations that may impact your product. Post-Brexit, expansion into the EU and Europe has become more complex. While language localisation is crucial for markets like France, Germany, Italy, and Spain, understanding how these markets differ sectoral from your home market is equally important.

Your solution's complexity also determines the degree of in-country support required, where a distributor or partner could provide front-line support. However, removing the freedom of movement of capital and people post-Brexit has complicated sending UK personnel abroad, introducing the need for work permits for extended stays.

Consider the US, although it appears as a single market, consists of separate states with differing tax rates. Therefore, navigating taxation at CodeBook became a critical factor while expanding. When expanding EMC abroad, I leveraged distributors and delivery partners with extensive market contacts, integrating them with my sales team for unified operations.

As Global Silicon, we had technical partners with local knowledge and contacts in the Chinese market, which helped identify suitable partners in Korea and Singapore. This allowed us to reduce travel frequency by hiring a local salesperson in the region.

Localisation extends beyond the product and includes other aspects of the business, even down to understanding whether the business or product name has a local meaning, especially with tech brands that use made-up ones.

Knowing the market is essential, and I can recount instances where the lack of knowledge led to potential business disasters. The point is to avoid becoming an accidental exporter responding reactively to customer inquiries. Instead, this strategy must be proactive and thoroughly planned to ensure the right resources are allocated to real opportunity areas.

? A US company eager to capitalize on Europe's competitive digital mobile market was preparing a bid for the D2, the second German network. Amid a high-level meeting, one executive, looking at a map of Germany, turned to his colleague and declared, "We won't develop infrastructure in the part of Germany called Denmark; there aren't enough people." Their arrogance and ignorance were glaringly apparent then, exposing their lack of due diligence. As we all know, Denmark, far from being a part of Germany, was at the time one of the countries with the highest mobile penetration in the world.

? Another US business, keen to expand into Europe with the creation of the single market, developed a hardware and software solution for managing cross-border logistics modelled on their experience in the NAFTA region, which includes the US, Canada, and Mexico. However, NAFTA and the EU single market are starkly different, with the latter having no borders for member countries and no accompanying paperwork. Luckily, they hired my consultancy firm to validate the opportunity, which prevented them from signing a 10-year lease agreement for a massive factory, potentially saving them from substantial monetary loss.

? Believe it or not, a publication map could spark an international diplomacy incident. I unintentionally caused one when we used UN maps of countries for our reports on the mobile market. During an international conference we attended in a North African country, the Minister of Post, Telegraph, and Telephone (PTT) objected to the map, demanded all publications be destroyed, and threatened to eject our team from the country.

Your expansion strategy could be a hybrid model, combining channel partners and country entities, that is staged and proactively managed. Toshiba's strategy, for example, was to partner with local distributors in each market and acquire them after some time.

This is one of the most complex decisions a business will ever make, requiring meticulous analysis and evaluation, akin to validating a business idea. If the founders or management lack international expansion experience, I would strongly recommend employing the services of a seasoned consultant who understands the unknown unknowns – those aspects inexperienced individuals might overlook.

Given the complexities and challenges of business expansion, I invite you to a free 15-minute one-on-one consultation to further delve into these topics. This could be the first crucial step towards successfully expanding your business abroad.

Author

Andy?Hamer

With a track record of delivering disruptive technologies and a diverse commercial, sales, marketing, and operations portfolio, I offer consultancy services that drive business success.?

Think of me as your personal "Google Maps" for business, helping you navigate the complex world of information and variables to find solutions that improve your business, increase profitability, and minimize risk.?

I have worked with medium-sized businesses, start-ups, and major technology companies globally, including CodeBook, Xinaps, Invicara, XYZ Reality, IBM, DEC, Apple, Toshiba, Panasonic, ATT, BT, CSC, NTT, KDD, and Deutsche Telecom.?

My consultancy services offered in-person, remotely, and in a hybrid format, are founded on aligning businesses for success.?

Your business is my business, and together we will develop an aligned commercial-operational strategy to scale and grow your business.?

Don't just take my word for it - my clients speak to my expertise and approach.?

Accreditations

? BA (Hons) Marketing Engineering?

? Fellow of the Chartered Institute of Marketing FCIM

? RICS Certified Project Information Manager

Publications:

? Guide to Exporting

? Importance of structured data for BIM

? Impact of BIM on FM