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The world has become much smaller thanks to the Internet. Interconnectivity has enabled many localized businesses to stake their claim on the world at large. Going global with an enterprise is a huge step, but for companies who want to tap into the income of newly emerging markets, there has never been a better time to search for new locations for expansion. As Bizfluent puts it, while there are several reasons companies may expand into emerging markets, the one overarching ideal remains the same: more profit.
However, as exciting as going global can be, it brings a unique series of challenges to overcome. From language and cultural barriers to meeting governmental directives for taxation, businesses have many obstacles to overcome before they get access to a new market. Elements like local competition can seriously hamper companies struggling to find their place in a smaller economy. Many parts of the world do business at a slower pace than the US, wrong-footing managers and their time estimates. Individually, these can be troubling for an enterprise, but together they could slow or even stop a business’s international expansion. In this article, we’ll look at how a brand can prepare to go global and what they should consider before setting foot across the sea.
Create a dream team
The people who form your core team overseas will be responsible for the business’s success in this new market. Business.com notes that the right people for a team to helm a company’s expansion into a new market should bring a balance of strategy and experience to the table. Your team will be responsible for developing relationships within the locale with suppliers and consumers. Partners can present themselves as either individuals or other businesses in the same space. One of the most important things about developing a team is that the companies you partner with today can be replaced tomorrow if someone with a better deal comes along. International expansion can be a ruthless affair.
Set up proper infrastructure
If your expansion office is in an international locale, it’s ludicrous to consider them getting mandates from the central office. Some decisions should defer to the local team, while the most significant ones come back for deliberation at the head office. This decision-making hierarchy requires having the right equipment for teleconferencing and international calling. Ideally, this infrastructure should exist in your satellite office before the team even moves in. Additionally, if you’re thinking about data sharing, cloud servers should be set up for the international team and employees that operate from that locale.
Consider local culture when implementing ideas
Within the US, many consumers are progressive in their thinking and enjoy certain rights and freedoms. However, outside of the US, the mentality of the populace might be substantially different. If you set up a holding company in a location that doesn’t have particular views, then advertising using those views will be received poorly. When introducing new ideas, it’s essential to understand how receptive the local population will be to these ideas. Bringing a local into your inner circle for deliberation can ease communication, thus preventing any problems.
Scope out the location before you open your doors
Businesses should remember that a country’s locale looks very different as an enterprise trying to establish itself, compared to how a tourist sees it. Many companies have decided to expand into places because they looked inviting, only to meet significant resistance from local competitors and governments. Ideally, the company should send someone to the desired area months in advance before deciding on the location. This reconnaissance allows them to view how the local population deals with new businesses. It additionally helps to determine whether the locals need the business’s presence or not. A willing market is much easier to introduce into than one that is averse to expansion. All of the input from this visit will solidify the decision to expand into this new market or leave it alone as untenable, potentially saving the company millions.
Be willing to pivot
Don’t get set on the vision of your business as a particular type of entity. In the US, a company might perform certain functions and fill a niche in the business community. However, when you enter a new market, you might find the location you wish to fill already occupied. Instead of entering into a protracted conflict against the local, possibly better-informed competition, consider pivoting to meet a new need in the local market. The challenges you encounter in each locale are likely to be different. As the business starts to enter multiple international markets, the niche it finds may be unique in every one of them.
Listen to your experts
Companies hire advisors to help them determine the viability of an expansion. Yet if the business fails to listen to these experts, they’re of no use to the company at all. Economically and financially, the business might stand to gain much from entering a market, but experts might advise against it, looking at the fragility of that country’s economic state. Nothing is more disastrous than trying to expand into a new country when a political coup or economic collapse occurs. Around the world, these things do tend to happen often, and it’s up to businesses to not only rely on, but also listen to, their advisors when they spot these issues coming before they can impact the business’s bottom line.
Adapt to your new expansion
An international expansion can be challenging to start operating. Learning about the country before establishing your team there will give you some level of insight. However, no matter how much a company plans its expansion, there will always be unknowns. The team and the local partners they forge will help overcome these hurdles to some extent, but they will need the head office’s full support if they are to succeed. It’s not enough to open up a location internationally and expect it to become immediately successful. If anything, it may be more challenging to establish a foothold in a mature market. Based on the returns, emerging markets are liable to bring, however, it may be well worth the effort.