Taking your company overseas sounds alluring. A new audience, more potential revenue, and the ability to help more people all sound great. But how will you know if your company is ready to enter a new market? The journey to becoming a global company consists of several challenges to tackle.
Exploring across borders is expensive and complex no matter how big or small the company is. Expanding can take away time and resources from other opportunities that may need it. Diego Caicedo, co-founder and CEO of OmniBank, said, “Companies should evaluate whether or not expansion is indeed beneficial, or if it will take away from their core business.” Zoe Morris, president of Frank Recruitment Group, said, “Take a look at finances and honestly ask yourself if you have the funds to support the initial investment and sustain the growth you’re forecasting.” If expanding your business doesn’t require you to sacrifice the foundation of your company back home, then it might be the right time to grow.
Just because you think your product or service will flourish in a country does not mean it will. Tailor sales and marketing to each country, and more specifically to each market in each country. Do not ignore the cultural differences that shape the marketplace. Wesley Johnston, director of the Center for Business and Industrial Marketing at Georgia State University said, “If many of your potential consumers are lactose-intolerant, you’d want to steer clear of opening an eatery that sells only cheese pizza.”
Be sure to do market research on the people and culture you are trying to target. According to Hilka Klinkenberg, founder of Etiquette International in New York City, less than 25 percent of U.S. business ventures abroad are successful. For example, Novo Nordisk, a leading provider of insulin, entered the Indonesian market in 2003. Its sales plummeted due to the lack of health care infrastructure, inadequate training of care providers, and limited patient awareness of the disease. Less than half of the nearly 8 million Indonesian diabetics received any treatment, and fewer than 1% of patients achieved their treatment targets.
Improved diagnosis and patient adherence could increase the insulin market fourfold by 2020, saving 4.6 million life-years, reducing government health care costs by $5.8 billion, and increasing the country’s GDP by $2.14 trillion. Diagnostic rates have already improved by 10%, generating increased sales for the company as well as improved health for tens of thousands of Indonesians.
Are your products or services in demand in the markets you are targeting? Make sure your customers exist and be certain they want to buy. If you own an e-commerce website, it is worth checking to see if you have a decent amount of purchases from consumers overseas. Even if you don’t have a website selling directly to consumers, a business trip to the new potential country might work. See where your traffic is coming from. Then dive deeper: who are your customers? What motivates them to buy your product or good? Take knowledge that is assessable to you currently to make educated decisions in a new-to-you market.
Each country has specific requirements for businesses that, if not handled correctly, can prevent a business from even entering. Do research and consider your options. One option would be to look into using a PEO (Professional Employer Organization). It functions as a co-employer and offers “big company” HR solutions to smaller teams. A Global PEO helps companies expand into global markets and can hire employees overseas in a short amount of time. NNRoad can handle local labor laws in the countries we work in, so companies are relieved of the burden of studying them.
A company with teams on either side of the hemisphere can be tricky. It’s difficult to even operate between the East and West Coast in the US. Will a dramatic time difference get in the way of meetings, creating content, or responding to consumer’s concerns? Make sure that across the board your team can accommodate each other’s time and most importantly your customers.
It’s never too late or too early for your business to consider going global.
Allow NNRoad solutions to guide you through this rigorous process and reap the advantages an international brand has to offer. Reach out today!