Taking your products or services abroad can create tremendous opportunity.
Do not have time to read? You can listen to this article below.
Few U.S. Businesses Consider Expanding Abroad
Taking your products or services abroad can create tremendous opportunity. Yet few U.S. businesses make the effort–and less than 25% of those that do succeed. Why? This is because of a complex range of factors beginning with inadequate research to ensure the fit of products and services to foreign business cultures and logistics.
Great Opportunity And Risk
Corporate entities have the clout to go international, often forming even larger global conglomerates that have come to dominate the world. Yet many small-scale startups have succeeded, as well, by beginning with low costs, doing careful research, creating reliable international networks and then using the latest, most effective digital and other technologies to secure their market niche.
Key Advantages Of Establishing A Global Presence Include–
- Accelerating the sales cycle of your products/services to the expansive international market.
- Reducing dependence on your local/national market.
- Counterbalancing seasonal market fluctuations in your region/country with sales to the other hemisphere or a region with different market dynamics.
- Becoming savvy about competing effectively in multiple markets will help you better understand your original consumer base, especially one demographically or psychographically diverse.
Before You Start
Is your business offering is a good fit for your target foreign market? Begin with consumer testing to determine not only fit but also what, if any, product/service modifications you’ll have to make. Be ready to reevaluate all your initial assumptions about foreign market demand and the best ways to generate revenue.
Evaluate The Product Or Service Fit–
- Most American products and services are well received overseas. This is not the case, however, if your potential customers are averse to milk products, certain clothing styles, etc.
- Is your target market familiar with your product or service? If not, you’ll need to educate your new consumers. This takes time and money. On the other hand, if you’re the first one to introduce a popular product in a foreign market, it will give your brand recognition and traction with the introduction of future products.
- Do you feel comfortable with the new culture? If not, this will be a big problem because you’ll need the motivation required to gain a thorough working knowledge of the language and culture.
- Is the foreign country’s infrastructure adequate? If you’re expecting Western standard accommodations and reliable logistical support you could be in for a series of shocks. If the roads aren’t up to par, hot water isn’t available, etc., be sure you have plans in place for maintaining the necessary profit margin within those limits.
Americans Are Notorious For Often Making A Poor Impression On Foreign Business Leaders, So Be Sure To–
- Cultivate a personal rapport before doing business. Foreign business leaders generally consider it rude to start talking business without first establishing personal rapport with small talk and sharing background information that doesn’t involve serious self-disclosure.
- Show respect for your hosts’ country by researching their culture beforehand, including demonstrating some familiarity with basic phrases in their language.
- Learn about their culture’s body language. Facial expressions are species-specific, but body language varies significantly from culture to culture and has a powerful effect on how well you are received.
- Avoid setting time limits. Keeping your initial meeting as open as possible puts others at ease and strengthens your negotiating position.
- Bring your own interpreter. Be aware, if they provide the interpreter, he/she will have their interests at heart, yours less so.
- Dress well and deport yourself with dignity.
In Part II of this Insights article, I’ll go into greater depth on the specific things you need to do to explore the viability of international business ventures.