Before Expanding to a Foreign Market-Part I

There is a steep learning curve that comes with the decision to expand to a foreign market.  These include understanding the cultural norms, dealing with the potential language barrier, and in some cases, preparing to adjust your basic business practices. The very first thing I do with the companies I work with is perform an internal analysis to determine suitability for their products/services in the desired foreign market and evaluate their readiness to expand their business.

Some of the top readiness indicators are a strong commitment from the management team, fully understanding their value proposition as it relates to the desired foreign market, and determining their capabilities and capacities to compete successfully in the new market. We also take a close look at the products/services to see if any customizations may need to be made or if we will need to adapt to specific government regulations, or technology standards.

Another important factor is the costs involved in expanding your business to a foreign market.  Not just the hard dollar costs, but the fact that some of the domestic business may be neglected, or the resources focused on the expansion may be pulled from the resources for product quality, continued innovations, etc. There will also be a strain on personal and family relationships with the additional travel required in order to have a smooth expansion.

There are numerous case studies of companies who made a ton of mistakes when expanding into a foreign market.  I encourage my companies to do extensive research (in addition to what I perform) so they don’t create the same mistakes that companies like Disney, Starbucks, and Walmart made when entering a foreign market and trying to conduct “business as usual”.

If I can help you determine whether your company should expand to a foreign market, please reach out to me.