The domestic market in the United States may be huge but most entrepreneurs are going after bigger markets, which is why a business owner has to think of ways to make a globally competitive company. When company owners are growth-oriented, they want to expand in overseas markets with plenty of potentials. Import-export, for example, offers plenty of challenging and lucrative opportunities. Successfully growing a globally competitive company offers many advantages such as:
- Prolonging the sales life of services and products via new markets.
- Lowering the dependence of the company on local markets in your own country.
- Using the revenues from new markets to level out your sales if your business is affected by seasonal fluctuations in the local markets in your home country.
- Opportunity to exploit corporate knowledge and technology.
- When you expand into the foreign marketplace, you're going to know how to contend with foreign companies in their own environment.
What is your primary reason for going global? The most typical response given by most company owners is to improve the chances for growth and expansion. Some of the valuable markets are Japan, Europe, Mexico and Canada. But these are the bigger markets. The member countries of BRICS, Brazil, Russia, India, China and South Africa, should not be discounted as they are smaller markets yet have huge potential, as they are areas that display faster growth.
There are several areas to target to have a globally competitive company. What companies should do is to thoroughly prepare for the international market.
Many experts claim that establishing and growing business in the United States right now is not that viable. So if you're looking to develop your business in a foreign country, you should be asking some questions and providing answers to help you plan your business strategies later.
1. Is your product going to perform well in the target market?
Market research is one of the critical things you need to do. Although American products usually perform better in foreign markets, you should not rely on this fact too much. To be a globally competitive company, you have to deeply know the habits and preferences of your target audience. Check the possibility of entering a niche market or create products that answer specific needs of the foreign market that other companies overlook.
2. Is your product or service familiar to the potential target market?
This is something that you should address once you are about to enter your target country. Be prepared to invest time and money to educate your target consumers. While you prepare for your launch, you are stirring the curiosity of the consumers and providing them with information that will help consumers become more familiar and ready for your product or service. It will help brand recall if the product you are going to introduce is similar to the name of your company.
3. Are you going to be comfortable in the target country?
It is normal for a company owner to temporarily live in the target country to oversee the company operations at the initial stage. Thus, it is vital that you have a working knowledge about the target country's culture and language.
4. Do you understand the target country's infrastructure?
You should be familiar with the type of support and accommodations you are going to get in the target country. You should learn about the status of the roads and other utilities including power and water. Another thing is the assurance in the continuous availability of local supplies (if any) that you are going to need for the production of your product or service.
What's the takeaway from these questions? If you cannot provide the fitting answers to the questions, the probability is high that the place or country you chose is not the right one. If you are still in the planning stage, it is to your advantage to have several markets to study.
Exporting products to foreign markets
You might be thinking that you can enter foreign markets through export. Yes, this is also viable; however, do understand that when you take your business to the global marketplace, it carries a load of risks as well. Unless you have a very firm plan for your foray into the international market, you might be swayed into chasing all the available opportunities. Exporting faces fluctuations in currency. Here are a few exporting mistakes that could be your source of valuable knowledge to guide you when you plan your exporting strategies. These are from the University of Missouri in Kansas City's program director at the Bloch School of Business Administration, John E. Cleek.
- Failure to plan your exporting strategy. It is not exclusive. Small and large businesses can be affected by this mistake. It is more difficult and time-consuming to get out of the problems created by this type of mistake than facing the minor problems when you've planned correctly from the initial stage.
- Following up all inquiries. It is counter-productive and inefficient to market your product to all the countries that showed interest. It is advantageous and beneficial for your company to exercise patience. Learn about the countries, send a reply to all inquiries but choose only the most profitable markets.
- Do not assume that what works in your country will apply to your target countries. Having a globally competitive company does not stem from applying the strategies you used in your home country to foreign markets. Each target county has a different culture and their consumers have different sets of expectations, buying habits and preferences. These factors affect the new target localities. Other factors you have to consider are packaging, pricing, payment terms and shipping.
- Do not assume that everyone speaks English. There are still many companies and cultures that expect that they can get by with English. Even if English is a language of business, you cannot expect that everyone speaks or understands English. You will be dealing with a variety of people from different cultural backgrounds and speaking other languages. If you are only entering one foreign country, it might be better if you learn the local language. Or you can work with a professional translation company to help you with translating of all your business documents, as well as your localization requirements.
Cultural knowledge is critical
It is essential for a company to understand the foreign culture. Many companies, including those from the United States, experienced failure when venturing into foreign markets. The common denominator is the failure of business owners to learn the culture of the markets they are entering. Others think that the way they do business in their own country will likewise be effective in other countries.
Knowing about business etiquette practiced in the target countries is also vital in order to build trust. During meetings, it is better to get to know one another before you start discussing business. Building rapport and trust, particularly during the initial stage is more important than diving into business discussions immediately. Aside from this, here are more things you should observe.
- Setting time limits to your discussion and negotiations is not proper.
- Research is important. Learn as much as you can about the country to show respect to your foreign colleagues. Have a professional interpreter present if you do not have a working knowledge of the language. Bringing an interpreter with you prevents bias.
- It is advantageous to learn how to read body language.
- Dress appropriately. You should exude authority and respectability. If you do not know how to do so, seek the help of an image expert.
Setting the stage for your globally competitive company
With proper planning, you are now ready to have a globally competitive company. You cannot just launch your company into the global market without following some steps.
- Prepare an international business plan. The plan should measure your needs and establish your business goals. It should determine your commitment and readiness to grow in the international business arena even before you launch your business/product/service.
- Research the market thoroughly and properly identify your markets. Coordinate with the U.S. Department of Commerce for proper foreign market information.
- Evaluate and determine the right methods of distribution. You can open your own subsidiaries in the foreign markets and work with local agents, distributors or representatives. You can likewise establish joint ventures with local partners.
- You market research should be crucial in navigating local exporting laws. It should also provide you with tips on negotiating and setting prices. You have to accept and understand economic, legal, social and cultural differences.
- Check your financing options from private and government sources. With the government encouraging exports, support for financing is much easier to obtain.
- Ensure the proper packaging and labeling of your products. They should conform to local market regulations.
Localize your product information
Understanding the local culture is not enough. You can have more chances of being a globally competitive company when you speak to your target audience in their own language. This means localizing your product information, marketing and advertising messages and other content accessed by the consuming public. Localization is an investment that would bring you closer to your target consumers. Speaking to them in their own language and showing them images, colors and videos according to their beliefs and traditions build trust and loyalty. Providing them with products and services that can be solutions they cannot find in other goods (local and imported), is an assurance that you'll have steady consumer support.
Allow Day Translations, Inc. to help you prepare your business to be globally competitive. Our team of translators who are experts in localization can work with you from the planning stage. They will be able to share not only their expertise but their firsthand knowledge from working with other global companies. Ensure that you are in the right track, contact Day Translations today for our translation and localization requirements. You can reach us at 1-800-969-6853 any time of the day, wherever you are located as we are open 24/7, throughout the year. You can also send us an email at Contact us. We work with more than 100 languages so are assured that you can handle your target language.
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