- Reduce your dependence on the markets you have developed in your home country.
- Extend extensively the sales life of existing products and services by finding new markets to sell them in.
- Make entry into new markets with different or even counter cyclical fluctuations cause by business due to seasonal changes or demand cycles.
- Exploit corporate technology and know-how.
- And to end this, by entering the global marketplace, you’ll learn how to compete against foreign companies.
What if your aspirations prompt you to debut your concept in a foreign land instead? Wesley Johnston, professor of marketing and director of the Center for Business and Industrial Marketing at Georgia State University in Atlanta, highlights the factors that can either make or break your business when you try to grow by going global. Here are key questions to ask yourself:
- Will the product sell well in the targeted culture?
Think market research. The good news is most American products and services are embraced overseas. But if many of your potential consumers are lactose intolerant, you’d want to steer clear of opening an eatery that sells only cheese pizza, says Johnston.
- Is your target market familiar with your product or service?
If not, be prepared to invest a lot of time and money in consumer education. On the flip side, if you’re the first one to introduce a new and exciting concept, “the product then becomes synonymous with your company name or chain,” Johnston explains.
- Do you feel comfortable in that country?
Since you’ll probably have to live there temporarily to operate the chain in its early stages, you’ll need a working knowledge of the language and culture.
- What is the infrastructure like?
Can you get Western-style accommodations and support? How good are the roads? Are your supplies guaranteed? What about the reliability of hot water?
If you don’t get the answers you want with the first foreign market you’re considering entering, that may not mean your idea is poor-just that you picked the wrong place. “It’s a big, big world out there,” Johnston says. “I don’t think there’s any one idea that won’t work somewhere.”
Along with promise, going global carries an equally heavy load of peril. From chasing too many opportunities to getting whacked by currency fluctuations, the game of international expansion has many threats that domestic only business people never see. You can grab the brass ring of growth by going global, but only if you avoid the pitfalls.