Creating a global business is no mean feat. How do you know whether your product will be relevant in a different market? What pitfalls are you likely to experience? How much cash will you need to ensure success?
The good news is that you don’t have to be a billion dollar business to start exporting – even companies perceived as being small can win big in overseas markets. From Violet Crumblesto Sippy Cups, Australian business of all sizes are showing how international traction is within reach.
For companies considering expansion into new markets in 2019, it’s vital to do the market research, assess your readiness, and answer some tough questions.
1. Is “going global” an integral part of your strategy?
Business is comprised of four things: identifying what customers value, figuring out how to deliver it to them, determining where the biggest opportunities are, and charging and collecting payment for what you deliver. Remember to weigh the opportunities and rewards against the risks of going global.
2. Do you have the right people on-site?
Whether you engage a representative to sell your product, relocate some of your staff, or hire someone in-country, it’s critically important to choose people who match your values, fit with your culture, understand your company’s mission, share the vision, are good communicators, and can perform at a high level with minimal supervision.
Develop a written document outlining mutual responsibilities, KPIs and expected outcomes so there’s no doubt about expectations. Set a time, each week, to check in with your international team to ensure that everyone is executing, and work through small problems before they become big ones.
3. Do you have systems and processes to support a global business?
The quality, specifications, and timelines that satisfy customers in Australia may not meet the regulations, or the expectations and requirements of customers in another country. You may need to make changes in the product, or how it is manufactured and delivered.
And customers around the world expect service 24/7. So even if your Australian office is technically closed, you’ll need to figure out how to assist your global customers when they need service.
4. Do you know enough about your potential global markets?
Some companies rush to the US, thinking it’s a big market, people speak English and have similar customs. Others think China is the place to go. Others argue for Europe or the Middle East. In fact, it all depends on what you’re exporting, which customers need and value what you are selling, whether you are a credible source, how many competitors there are, and whether you can generate enough profit to make it worthwhile. If you don’t do good market research, missteps could impair your expansion, and even endanger your core business.
5. Is this the right time to expand into another country?
The timing of “going global” should depend on your company’s readiness for expansion and the economic “context” of your chosen country. Going global works best when the company has an experienced team; well-functioning systems, policies and procedures; reserves; customers and recurring revenue – so the company can stay afloat, even if the ‘going global’ efforts fail. It may take a few tries to get it right, so be prepared to make an investment with no return for a year or two.
6. Is someone responsible for the global strategy?
Someone besides the chief executive should be responsible for implementing the ‘going global’ part of the growth strategy. It should not be assigned to the marketing or sales or product teams, because all parts of the business must support “going global” in order to achieve success.
While there are many benefits to taking a company global, there are also many pitfalls. Answering these questions should help identify whether you have the people, processes and systems in place to successfully “go global”.
Dr Jana Matthews is the ANZ Chair in Business Growth, Professor, and Director of the Australian Centre for Business Growth at the University of South Australia’s Business School.
This article was first published by The Age