When a business is successful, expansion is all but an inevitability. To thrive, a business needs to stretch beyond its initial borders, reaching out to new demographics, which can often mean expanding into new geographic regions or other countries entirely. This sort of expansion is significantly profitable and can have a strong positive effect on the lifespan of a business; according to a study by the Institute for International Economics, businesses that export are almost 10%t less likely to go out of business than those that hesitate to expand.
For organizations expanding to areas which differ significantly in terms of culture, legal environment, or supply chain, however, expansion can prove difficult without extensive, thorough research and planning. Read on to learn some important tips and tactics for regional expansion.
Do your research before moving in.
Do the things your current brand image conveys have the same cultural value in the new region? Do any of your product names have unfortunate double meanings in the local language that they lack in English? Before starting the expansion process, make sure that your brand is one that can thrive in the region. If not, your marketing and advertising departments should spend some time reevaluating your brand and its promotional materials. If it is practical, try bringing in some natives of the target region to give your promotional materials a good, critical look.
Unless you have a very good reason, don’t be too ambitious with your first expansion.
Overexpansion is one of the leading causes of business failure, and expanding out of your organization’s comfort zone can be particularly damaging to the business. Take particular note of regions to which none of your competitors have expanded; while these often present tempting targets, there is a good chance that your competitors all saw something you didn’t see at first glance.
Provide solid support for the local buyers.
While you don’t necessarily need a 24/7 support team that operates exclusively in the language of the target region, do your best to support the new product. Your current support team may not be able to meet the needs of the new buyers effectively. Consider technological solutions that will improve your responsiveness to those in the new region.
Choose any new partners carefully.
When choosing a local distributor or other organization to work with in the new region, make sure that the organization is trustworthy and is one that the company could work with for the long haul. Many markets take a dim view of companies that start out with one local partner and ultimately abandon it after cultivating some business in the region.
Don’t promise a product you don’t know if you can deliver yet.
While it can be tempting to set a date for the debut of a product in a new market, don’t set that date unless absolutely certain it’s doable. Many companies will set dates only to find out at the last minute that a legal issue or manufacturing problem has set the product back weeks or even months. These incidents can damage a company’s credibility and leave it reeling in the new environment. If such a promise falls through, apologize swiftly and profusely.
What Do You Think?
Though doing business in a new area of the world can be stressful and requires both care and research, the dividends can be great. A careful, measured approach to such an expansion will pay great dividends later on. Have you been part of an international expansion? Do you have wisdom to share regarding selling to foreign customers? Tell us in the comments! We’d love to hear from you.