Far too many companies’ approach to international trade is reactive rather than strategic. People react to chance enquiries or random meetings at trade shows, and those ad hoc encounters are somehow translated into a global market strategy. This approach seldom works. Your approach to international should be strategic and long-term because experience shows us that other approaches tend to end in costly failure.
You need to think very deeply about which of the many international markets you could attack are most likely to bring you a return on your investment within a timescale which you are comfortable with – and it is important to stress the need to factor timescales in at this stage as international is very rarely a ‘quick win’ in terms of ROI.
So what factors should you consider? Well, one factor you should probably dismiss immediately is macro-economics. Just because India will grow at 8% in the coming years doesn’t necessarily mean India is right for your product; just because Europe is generally flat doesn’t mean you should ignore it. Macroeconomics give you a broad brush overview; what you need is a much more detailed analysis which takes into account such issues as:
If you are looking to start trading internationally or to expand out from an existing base of international clients, you need to start by developing a long list of potential future destinations and then use a pre-defined set of criteria to whittle that long list down to a handful of candidate countries. At that point, and only at that point, should you start to do much more in-depth research into your selected target markets.
TGG has helped many companies to select potential markets which might be right for their growth plans and then moved on with those clients to do much greater in-depth research in order to develop a robust, go-to market plan – and it is this essential research piece of the puzzle that we will look at as the next step in this 10-step guide.
If you would like a more detailed overview of how TGG could help your company develop a robust global strategy, please contact me.
Keith Warburton, founder of Global Business Culture, is one of the world’s leading experts on the commercial impact of cultural differences on global business. He is a frequent keynote speaker at international conferences and leads corporate training programmes all over the world.