The following is an excerpt from an article from AllBusiness.com by Michael Evans.
By definition, “going global” is the worldwide movement toward economic, financial, trade, and communications integration. The concept of globalization can be traced back as far as the Roman Empire. More recently, the concept was popularized by Thomas L. Friedman in his book The World Is Flat, in which he argued that the pace of globalized trade, outsourcing, and supply-chaining was speeding up and that its impact on business organizations and business practices would continue to grow in the 21st century.
For small and emerging businesses, going global is a significant undertaking that could disrupt existing business activities. Thus, it is for crucial for CEOs and business leaders to understand its full impact and determine if the rewards outweigh the risks. Stakeholders across the organization will be called on to carry more responsibilities to continue to execute on day-to-day activities in addition to the global initiative.
Taking a small business global is an complex and dynamic process. Gaining a deep understanding of the targeted markets, the competition, current local market trends, and the requirements to successfully launch and drive growth lays an important foundation.
10 Steps to Successfully Expand Your Business Overseas
1. Perform a “Deep Dive” Due Diligence
Before going global, it is critical to understand what the full impact on your business will be.
- Prepare a market segmentation analysis to determine if your product will sell in the local market.
- Prepare a product gap analysis against local products. Is there a demand that is not satisfied by a local company?
- Perform a SWOT analysis against competition. Your product will likely be higher priced than local products. Will the market buy your product?
- Consider market opportunity/sizing. How big is the market and how long will it take you to capture your targeted sales?
2. Develop a Strategy and Business Plan
Each market has its own nuances due to economic, cultural, governmental, and market conditions. It is important to develop a localized strategy and business plan that drives local success while remaining integrated with the overall corporate strategy and objectives.
- Define short-, medium-, and long-term strategy. Set reasonable goals to measure progress and cost/benefits.
- Define goals, objectives, and success metrics.
- Complete the business model and structure. Decide if you set up a separate company, a branch, or a sales office.
- Develop a top-down annual budget.
- Develop a tactical project plan with commit dates.
3. Establish a Beachhead Team
Many global companies try to launch with executives from the parent company or rapidly build a local team from scratch. This is time consuming, risky, and slows time to market. Using proven senior interim executives allows the company to hit the ground running, quickly validate assumptions, and drive key readiness initiatives while the company hires the right senior management team.
- Bring on senior interim executives with deep domain expertise or outsource interim leadership to executive leadership organizations.
- Establish the financial infrastructure—consider outsourcing this to local service providers.
- Begin the recruiting process for the permanent leadership team.
4. Product Readiness
Based on the product gap analysis, take the necessary steps to market-ready your offerings to achieve high-impact product differentiation.
- Review government- and industry-specific regulations to ensure that compliance and certifications are obtained if needed.
- Determine if any localization of the product is needed. Pay close attention to the translation of the name of your product in the local language.
- Initiate a patent and trademark review—some countries are known for “copying” good ideas.
- Initiate testing and quality assurance review based on local standards.
- Consider a local logistics and distribution network. Who will sell your product and how will it get to them?
5. Organizational Readiness
Cultural differences, whether it is language, regulations, or customs, requires a firm to be flexible in the policies and procedures implemented in an international operation to ensure employees are engaged and executing on the company’s plans. The “one size fits all” mindset can have short-term benefits but will have negative long-term effects.
- Evaluate the organization structure needed to successfully execute your strategy.
- Develop policies, procedures, and handbooks that comply with local requirements while maintaining balance with overall company policies.
- Develop competitive benefits programs to attract qualified local employees.
- Develop competitive compensation packages based on local standards and customs.
- Develop a local information technology infrastructure that is compatible with your domestic infrastructure.
- Manage payroll and human resource functions—again, a process that lends itself to outsourcing.
To see the remaining 5 steps in successfully expanding your business, read the full article here.
About Micheal Evans
Michael Evans is Managing Director for the Newport Board Group. Previous to Newport, Michael L. Evans had been with Ernst & Young since 1977 and served as a partner since 1984. During his 34 years with the firm, he served as a tax, audit and consulting services partner, specializing in real estate companies and publicly traded entities. Michael served as the firm’s Global Director of the Real Estate and Construction Industry from 1988 to 1998, serving many of the largest international real estate organizations in the U.S. and the world.
