The aim of almost any businesses is to grow. One way to achieve growth is to expand into more marketplaces, especially global marketplaces. However, if you are thinking of expanding your company internationally, it’s important to be aware of some common mistakes that businesses make. Everyone makes mistakes, but awareness of possible errors is the first step in avoiding them. Mistakes tend to happen more frequently when companies step outside familiar territory and decide to market their goods and services outside of their home countries. The following is a discussion of four common blunders that business owners make when beginning international expansion.
1. International expansion for the Wrong Reason
Before you decide to enter the international marketplace, think about whether you are doing it for the right reasons. Are you doing it just because everyone else is doing it? Global expansion should not be considered as a way to make a quick buck. Rather than being regarded as a get-rich-quick scheme, an international expansion strategy should be seen as a long-term investment. To assess your company’s commitment and readiness to going global, ask yourself the following questions:
- Does your company have the structural and financial capability to sustain international growth?
- Does your business have an organizational structure that is flexible enough to adapt to new markets?
- Do you have a committed management team in place that is prepared to meet global challenges?
- Do you have the necessary resources and staff to focus on international expansion while continuing to maintain your current domestic customer base?
2. Not Having an International Expansion Plan in Place
As exciting as it may seem to be thinking about expanding internationally, doing so without a carefully thought out plan in place could mean that you won’t succeed. Also, keep in mind that the same plan probably won’t work for each country that you are considering. Different countries are likely to have different markets, needs, laws, etc. In other words, there is no one-size-fits-all market expansion formula. The first thing you should do is conduct some basic research on the marketplace you want to go into. Is there demand for your product or service? Who’s already there? Who’s winning? Who’s losing?
3. Not Paying For the Best International Marketing Talent
Talented people are investments in your business’s future, so be willing to pay for excellence. Hire the best personnel possible to lead your company to success in new international markets. Understand that local professionals will have a much better idea of what customers want and are in a better position to understand their needs. It’s also essential that you hire local people who understand what is involved concerning compliance with local laws and regulations. For a local team to thrive, it needs strong leadership in place to make the right decisions. So you will need a point person on the ground to make tough calls and liaise with upper management in your home office.
4. Not Thinking About Localization
Beyond general market research, you need to take a look at local product preferences, preferred local marketing channels, and consumer behavior in your targeted market. Cultural norms vary widely, and you have to be able to adapt to various differences. Here are some more questions to ask:
- What local standards and requirements are in place relating to my product or service?
- Can my product or service be adapted to this new market?
- Do I truly understand the buying patterns of my targeted demographic?
- What form does the local business etiquette take?
International expansion is becoming more and more important to business growth. You can gain a competitive edge by targeting the global markets that are right for you and adapting your marketing strategies and products to appeal to local customers. With proper preparation and planning, international markets can offer unlimited opportunities for your business.
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