By Dennis Day and Michael Evans Show
"Going global” is defined as 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. © bussiclick - Fotolia.com 1. Perform a “Deep Dive” Due DiligenceBefore going global, it is critical to understand what the full impact on your business will be.
2. Develop a Strategy and Business PlanEach 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.
3. Establish a Beachhead TeamMany 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.
4. Product ReadinessBased on the product gap analysis, take the necessary steps to market-ready your offerings to achieve high-impact product differentiation.
5. Organizational ReadinessCultural 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.
More AllBusiness: 99 Inspirational Quotes for Entrepreneurs The Biggest Mistake I Made in My Business – And What I Learned From It 10 Invaluable Tools for Running a Small Business The Top 25 Home-Based Business Ideas 6. Establish a Go-to-Market StrategyThe effective selling and marketing of your products or services requires a comprehensive, cohesive strategy that addresses sales strategy, sales delivery, branding/value proposition, marketing strategy, marketing programs, and pricing, which together create clear market differentiators that propel market acceptance and revenue growth.
7. Legal ReadinessSome countries are known for being highly litigious, so it is critical that strong legal processes are put in place to minimize unnecessary commercial risks. Also, government agencies have strict requirements that necessitates legal documentation be in place prior to operating within the country. Being proactive does require money upfront, but this more than offsets downstream risks and liabilities.
8. Tax and Finance ReadinessThe proper tax and finance infrastructures need to be set up early on to ensure that you are receiving timely reporting and that your foreign entity is adhering to local corporate policies and procedures.
9. Prepare Your Final Budget PreparationResults from the above steps should provide sufficient data for stakeholders of the foreign company to develop a final budget that is aggressive yet attainable, and one that will be owned by your local team.
10. Establish Close Relationships with Local BusinessesGain a strong competitive advantage by creating a supporting ecosystem of complimentary products and services, which can come via third-party relationships. These relationships can support the scaling of the organization while minimizing the financial risk.
Expanding your business overseas is not for the fainthearted, but for most businesses it will be inevitable as global markets offer greater opportunities for growth. By paying attention to details and outsourcing administrative functions, the difficult job of “going global” can produce great results. Dennis Day is the Head of Strategic Alliances at TMF Group. Read all of Michael Evans’ articles on AllBusiness.com. Related Articles on AllBusiness: 28 Mistakes Entrepreneurs Make When Pitching to Investors 25 Frequently Asked Questions on Starting a Business 9 Key Ways to Prepare for an M&A Transaction 65 Questions Venture Capitalists Will Ask Startups For local business information on 15 million businesses, visit InBusiness.com. What is the first step in selecting a foreign market?Market potential: The first step in foreign market selection is assessing market potential. Many publications such as those listed in “Building Global Skills” provide data about population, GDP, per capita GDP, public infrastructure, and ownership of such goods as automobiles and televisions.
What factor should be considered when entering a global market?Factors to Consider When Entering a Foreign Market. Gross Domestic Product. Gross domestic product (GDP) is the value of the goods and services produced in an economy. ... . Unemployment Rate. ... . Inflation.. What are the three major reasons why businesses decide to go global quizlet?Economic.. Competitive.. Technological.. Political/Legal.. Sociocultural.. What steps may an MNC follow in becoming global?10 Steps for Expanding Into Global Markets. Develop a game plan. ... . Identify the product or service you have to sell. ... . Develop an export plan. ... . Conduct market analysis. ... . Segment potential export markets. ... . Assess your competition. ... . Determine if there are packaging, labeling or regulatory requirements.. |