Strategy : Going Global - Study Your Markets, Develop a Strategic Plan

Gretchen Glasscock is Founder and President of Advancing Women, an organization and web portal that supports equity for women and minorities in the workplace through career and financial parity.  She is also Co-Founder and publisher of Advancing Women in Leadership, the first professional, refereed journal for women on the web, written by Ph.D. educational researchers worldwide.

Gretchen is Editor of Advancing Women Network, daily news ezine and weekly news digest, which focuses on Workplace/Career & Business News, as well as diversity issues.  She is also Founder and Director of AW Institute, a non-profit organization conducting research and offering consulting to support the proliferation of women in leadership positions in all aspects of professional and corporate life

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Go global before a foreign competitor steals or marginalizes your business. Not only will you expand your market, but you will access a diverse revenue stream which is more stable since you will no longer be as vulnerable to periodic downturns in any one economy. Global companies outperform domestics, growing twice as fast with significantly higher returns.

It's one thing to put up a web site. It's another to put ecommerce on it and still another to try to go global. Yes, people can view your website from all over the world, but can they, as a practical matter, actually buy things on it and will they want to? More practical still, how will you get paid if a foreign customer does want to buy from you?

First, if you are still pondering whether to go global or not, you should recognize the fact that you are global, in the sense that you very likely have global competitors, so you are in a competitive global marketplace whether you've addressed those issues or not.

Second, with what is sometimes referred to as the transparency of the Net, the competition can view your strategy and your pricing. In fact, your foreign competitors can "appropriate"... some say hijack... your entire concept and pricing, and often even the look and feel of your website. They can then not only open up shop in their country, but invade your domestic marketplace as well, going head to head with you, but with the benefit of hindsight, avoiding your mistakes, piggybacking off your entry into the market and successes in it, and with newer, more powerful and sophisticated software platforms. A domestic player will find it difficult to stand up to the assault of a global competitor.

In this case, the best defense really is a good offense. Get out there and go global before a foreign competitor steals or marginalizes your business. And there are some other very good reasons for going global. Not only will you expand your market, but you will access a diverse revenue stream which is more stable since you will no longer be as vulnerable to periodic downturns in any one economy. Global companies outperform domestics, growing twice as fast with significantly higher returns.

So going global in your ecommerce efforts makes good sense, but with the understanding that serious thought and preparation are required. Deirdre Mendez, PhD., President of Foreign Business Management Consultants in Austin, Texas says: "Small companies enter international markets without a clear strategy, and without adequate preparation. They don't research foreign markets, perform due diligence on foreign partners, protect their intellectual property or understand the customer culture of their overseas operations. They create partnerships that don't work and must be renegotiated or terminated. All of these mistakes take time to rectify and cost money. Some of them cannot be undone. But all of them can be avoided by strategic planning."

Mendez identifies the key issues you need to look at, some of which are the following:

  • Point of Entry - the most strategic market for your launch.
  • Distribution - if you're marketing a physical rather than a digital product.
  • Partnerships - this can be the make or break decision in any business.
  • Product Localization - usually a minimum of some form of translation is required, even if it's just translating the packaging.
  • Customer Support - Expectations vary by country and long distance supervision is challenging so this is a particularly thorny issue
  • Cultural Issues - riddled with landmines. Assume nothing. Get a trusted local to guide you through this and don't expect your local partner to carry this whole burden.

For an Internet business, there are some additional considerations. In order to analyze your needs, you need to look at 3 pieces of the infrastructure puzzle: information, product flow and payments. For a dot com, the information structure already exists in the form of the Internet but within that structure different forms of ecommerce have different needs. Portals or infomediaries..... networks who are gathering products and adding value for the consumer... like Yahoo.... slip easily into another locale, needing neither supply chains or distribution centers nor any means to accept foreign payments. Vendors who sell services or digital products must have all the local infrastructure for payments and those who ship physical products must also go through a tangle of local tax and regulatory laws plus the intricacies of local supply chains.

Getting paid can also be a challenge. As a recent Business 2.0 article points out, for example, "Credit cards are not widely used for ecommerce in Japan - less than 10% of transactions are conducted using credit cards.... but...(convenience store) 7-Eleven Japan has a payment acceptance service for products and services purchased from Web merchants. Consumers can select "payment at a 7-Eleven Store" as one of the payment options, and print out a payment slip that they present at their nearest 7-Eleven store". With different countries having their own customs and bill paying habits, it's critical to investigate the entire payment infrastructure before your market launch in a particular country.

So, how to get started? Perhaps the two easiest ways.... easy being a relative term... are to find a local partner or turn to the Net itself. Partnering on the Net is easier in many ways than in the real world. First, many large multi-nationals are willing to partner with smaller niche players. Their reputations are established and important to them. Their infrastructure is in place, all transactions are computerized, tracked and audited, so you'll probably get a fair deal, if not a lot of warm, personal contact.

But the easiest way of all may be to turn to the Net itself in the form of one of the B2B marketplaces. Find the marketplace which is most suited to your business, where the infrastructure is in place, for both trading and payments, and you can deal directly with your domestic or foreign counterparts with only a fraction of the cost of a traditional middleman, paid in the form of a small transaction fee. It's an efficient, potentially lucrative way to enter new markets instantly with much of your advertising done for you by the B2B website. After you've had a chance to gain some experience and see how your products fare in other regions, you may decide to set up your own infrastructure or not, depending on the tradeoffs between profitability and the added complexities of doing business abroad.

Is this all a lot of work? Yes. But not as much as starting a business from scratch. You are replicating your business for another set of circumstances, a different locale and culture, with a different market, demands, needs and expectations. But is it worth it? Definitely. If you do your homework, get some help from locals and professionals, going global could be one of the smartest and most profitable moves you've ever made.

Ó Copyright Gretchen Glasscock 2004

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