Subscribe to our RSS feed to receive the latest news, updates, articles and more.
20 keys to success in international markets
“Plan your work, and work your plan.” An international market entry plan contains hundreds of elements, but these initial 20 are the most critical for success abroad:
- An appropriate amount of planning time. Too often companies approach foreign markets and cut corners on the necessary planning time. Executives will not dedicate their time, hire the correct resources, and spend the money to plan a proper market entry strategy. The idea of “getting on a plane and getting a deal” simply does not work overseas.
- An actionable goal. A goal is a number (think of hockey goals). The goals can be sales volume, number of accounts, market share, points on customer satisfaction surveys, margin, profit, ROI, or whatever benchmarks the firm uses. Frequently markets are approached without goals that can be articulated within and outside the company.
- A realistic objective. Objectives refer to the situation the company wishes to be in, usually in regards to market position. For example, are you the low-cost supplier? Are you the market leader? Are you associated with a luxury position in the market? Are you the convenient choice? Are you aiming for profit or market share?
- A logical market screening mechanism. Buzzwords like “China’s 1.5 billion people” or “Denmark’s 4.2 million citizens” point to a laziness when defining which markets to approach. A matrix that makes sense to your organization needs to be employed.
- A true understanding of the market conditions. How is the how the market organized? How does distribution work? What are the price points? Who are the major players?
- A regulatory strategy. Where will foreign governments help you and where will they block your progress? Are you in touch with local leaders when necessary? And will your government allow you to sell in a foreign market? Are there any conditions you must satisfy to be able to do this?
- A competitive analysis. Who are you displacing by being in the market? Who will try to block your presence there? What advantages do you have over your new competitors? What is their competitive advantage, and how will you overcome it? What are your rivals doing to price, promote, distribute, and enhance product?
- A true understanding of the customer. What are the customers’ buying habits? Who are the customer groups? How will you approach the clientele? What is the sales cycle like in this country? What motivates the client to buy? Are customers open to the idea of new players in the market?
- A genuine “mode of entry” strategy. What will be your way in to this market? What kind of support will your salespeople need? Will you be selling directly or through some form of distribution? Are there other firms you can cooperate with to gain market entry?
- Realistic expectations. Has your firm been educated in how long and how difficult this market will be to enter? As each market has specific and varying conditions, each territory must be carefully studied.
- The correct market champions. Companies can often leap to the conclusion that success at home will equal success abroad. The one liner: “Jim Bob did such a good job selling in Kansas, we’re giving him Tokyo.”
- Cross cultural and country training. Does your staff understand the nuances of doing business in the particular countries you have chosen? Are you training them continuously?
- A “roadblock” map. What impediments exist to your success? Cultural, legal, political, infrastructure, personnel, or funding?
- Interest in more than the money. Do the people involved really enjoy the country in question? Are they invested personally in learning some language, the customs, the food, the entertainment? If an executive loves India, he/she will have a higher probability of success than someone who merely tolerates it.
- Feedback on market conditions. Do you have a mechanism to gather and disseminate information on the market? Will the knowledge be utilized?
- A budget that makes sense. Only after goals and objectives are set, and market knowledge is gathered and understood, should a budget be prepared. We continuously see the opposite approach of “let’s throw X dollars at the market.”
- Executive investment. Not a budget, but an investment in time and effort. The CEO who flies to Paris for a two day meeting is basically telling the French: “I don’t care about you; I just want your money.”
- Humility. When we play in someone else’s sandbox, we need to remember we don’t set the rules, they do.
- Patience. With the main cultural difference being how time is viewed, we can bet that our international counterparts will take longer to make and implement decisions than we do in the USA.
© 2007-2017 Partners International, Inc. . All Rights Reserved.
by Mass Density, Inc.