International Expansion Strategy – Deliver Growth
Take your business overseas which can open up new opportunities, at times of uncertainty in the current UK and global market.
The challenges of taking your business into new international territories are complex, but very exciting and getting this right can lead to sustained and robust growth.
Some of the specific advantages of going global include:
- You can reduce risk of relying too heavily on your home market.
- You can extend the sales life of existing products by finding new markets.
- Improve your potential for expansion and growth where you seek out new markets for your existing products or develop new products for your new market.
So, in this blog, I’m going to take you through 7 steps that I’ve learned in my time of developing and implementing international growth strategy for number of businesses, as an interim Strategic Marketing/Sales/Marketing Director.
- Plan, Plan, Plan
Develop a detailed Strategic Plan. This will allow you to focus on understanding where in the world does the growth opportunity lie. As part of developing the Strategic Plan, look at MACRO as well MICRO environment.
Dig deeper into the key market driver
Example. I worked with a business where the sales team was structured towards focusing in the Eastern Europe countries.
On completing the analysis, it clearly showed urbanisation, middle class income, GDP growth rate, infrastructure growth rate were greater in the developing region of SE Asia and Africa.
As a result of this deep dive we decided to focus on select few countries within SE Asia and Africa – by way of appointing distributors and re-structuring the business as well as the sales team.
See CASE STUDY EXAMPLE in more detail.
Gaining a deep understanding of the targeted markets, the competition, current local market trends, and the requirements to successfully launch and drive growth lays an important foundation.
Therefore, do a detailed scan of the opportunity that may allow you to expand and then decide on the best options for international growth.
Options available could be ‘build’, ‘buy’ or ‘ally’
- Exporting from UK into your target country.
- Appointing a local agent/distributor.
- Developing of local manufacturing, assembly, or local sales or service establishment.
- Licensing to a company in the target country.
- Establishing a joint venture with a local company.
- Establishing a new wholly owned subsidiary.
- Acquiring an established business in the target country.
Make your decision based on the following criteria:
- Transport costs.
- Trade obstructions which include tariffs, and non-tariff barriers.
- Political risks.
- Economic risks.
- Total Costs.
- Your short, medium- and long-term strategy.
2) Develop Localized Plan
It is important to develop a localized strategy and plan that drives local success while remaining integrated with the overall corporate strategy and objectives.
- Prepare a market segmentation analysis to determine if your product will sell in the local market.
- Prepare a product gap analysis against local products. Is there a demand that is not satisfied by a local company?
- Perform a SWOT analysis against competition. Your product will likely be higher priced than local products. Will the market buy your product?
- Consider market opportunity/sizing. How big is the market and how long will it take you to capture your targeted sales?
- Carry out a detailed supply chain analysis – can you access the raw materials/logistics etc.? Or will you in the first instance rely on local distributor.
3). Understand local rules and standards
New culture, new packaging, new currencies, new tax authorities – they’re all inevitable in global growth journeys.
Become familiar with International Commercial Terms(incoterms). These are published by the International Chamber of Commerce and they are used in international commercial transactions.
In some countries the government agencies have strict requirements that necessitates legal documentation, and quality standards be in place prior to operating within the country.
- Create localized commercial agreements.
- Review industry-specific regulations to ensure compliance and certifications are obtained if needed.
- Maintain corporate records and governance.
- Determine if any localization of the product is needed. Pay close attention to the translation of the name of your product in the local language.
- Initiate testing and quality assurance review based on local standards.
4) Organizational Readiness
Its a common mistake to allow current infrastructure, systems and technology to lead and carry on as is. Evaluate your organisational structure needed to successfully execute your strategy. Remember to develop policies, procedures, and handbooks that comply with local requirements and to also develop a local currency exchange rate model.
Ensuring a local Information technology infrastructure that is compatible with your domestic infrastructure is vital. Another crucial element to remember is secure spare revenue in your preferred currency.
5) Establish Your Management Team
Many companies try to launch with executives from a parent company or rapidly build a local team from scratch. This is time consuming and can be risky.
6) Establish a Go-to-Market Strategy
Once you have decided on how you wish to go international (i.e. ‘build’, ‘buy’ or ‘ally’ or combination of all three). Ensure you have got your “go to market” strategy planned out. Ensuring you have a fully aligned sales/marketing strategy and team
The effective selling and marketing of your products requires a comprehensive, cohesive strategy that addresses sales strategy, sales delivery, pricing, value proposition, marketing strategy, and marketing programs, which together create a clear market differentiators.
- Decide on your optimum sales model: direct, indirect, OEM, distributor, hybrid?
- Determine your sales methodology: solution, feature, consultative, price?
- Develop a comprehensive marketing plan.
- Develop a detailed KPI (use A3 matrix) to ensure you know you are heading in the right direction.
- Develop a detailed on boarding marketing material for local distributor, if this is the route you decide to go.
- Evaluate and develop your pricing model.
7) Funding Investment
You may need additional investment to go global. Raising funds in the new geographical market can work well. However, you may need to then handle complications around foreign exchange and cross border movements of capital.
The UK Government supports the expansion of domestic businesses overseas with its UK Export Finance credit agency. Many overseas governments have trade departments that will support inward investment with guarantees, direct lending and grant funding.
- Expanding your business overseas is not for the fainthearted, but for most businesses it will be inevitable as global markets offer greater opportunities for growth. By carrying out a detailed planning process the difficult job of “going global” can produce great results and your initial detailed analysis of the opportunity will help guide your initial choices.
- Work out if you need to expand your export strategy or outwardly invest in a country by developing new sales channels; a manufacturing facility; logistics hub etc. Remember you can use a combination of different approaches at different times, based on what is most effective for your business.
- Pick your new market region/country carefully. Finding customers who want your products at the right price could be challenging, but put the local customer at the heart of your thinking- this will be the key to unlocking your business potential. Avoid using existing systems and procedures for convenience. Instead, put the new strategy and local customer needs at the heart of your thinking.
Rakesh Shah RVR Management has over 20 years’ experience of working with the CEOs and executive teams of high-potential B2B organisations. and has significant international experience (EMEA, USA, Asia) of growing sales. He is MBA and CIM qualified, with a background of delivering international Sales Growth within a range of B2B sectors and offers a range of business tools and support services that deliver sales/margin growth.
Contact Rakesh Shah 0778 555 8344