Above and Beyond: Making the Most of your Overseas Opportunities
You might think that expanding your company’s reach overseas is a complex, dangerous and risky exercise not worth undertaking, given the expensive mistakes you read about in the trade and national press. However, this couldn’t be further from the truth, as you'll have seen in my recent article for the i Newspaper.
The executives and organisations that make a great deal of money abroad are those that have a plan and clear focus for aligning their products and services to the right countries. While the EU has traditionally been where UK companies aim to stake their claims, in fact Japan, China and the USA offer great rewards for those that get it right.
How your business can win in these locations is a direct result of:
- Being intentional. First, international expansion to these consumers and clients must be part of your business strategy. All too often, companies are pulled into these large economies accidentally, where a large order is placed by a Japanese, Chinese or American customer. While being opportunistic can be profitable, it’s not a strategy. Better is to know why and how you’ll grow in these markets and the size of the opportunities in them for your products and services. If the US is your target, it’s worth knowing that California is the size of the French economy, while Texas’ is the size of Brazil. San Francisco, Oakland and Hayward in California are collectively about the size of the Belgian economy. If Japan is where you are thinking of expanding, then its status as the third-largest world economy by nominal GDP, fourth-largest by purchasing power parity and second largest developed economy in the world makes it one full of opportunity. China is also worth consideration. If you believe Walmart is the world's biggest retailer or Amazon the largest online retailer, then you’ve not studied Alibaba. This Chinese giant sells nearly three times more merchandise as Amazon and has surpassed Walmart as the biggest retailer. In fact, Alibaba’s US online retail growth makes it the sixth-biggest online-shopping site in the US.
- Doing your homework. Ensuring you know how the cultures of these geographies will impact the appetite for your products and services is vital. Whether using UK Department for International Trade experts on the ground in your target markets or conducting your own market research, we know that “culture eats strategy for breakfast” according to management guru Dr. Peter Drucker. For example, UK baby food brand Ella’s Kitchen learned early on through research that American children do not like the taste of fish. Similarly, cake mix brand Betty Crocker learned that their boxes of cake mix in Japan cannot be made in a rice cooker.
- Differentiation. Knowing how and why your products and services will be better and/or different than what’s on offer in your overseas markets is the starting point. Only then are you able to earn a premium from these international customers since your points of difference are clear and defendable. Luxury brands do this very successfully, promoting their countries of origin, product scarcity and unique manufacturing methods making them unique in their chosen international markets.
- Localisation. While McDonald’s is often criticised for its menu template around the world, it is in fact a very good example of offering local items such as the macarons in France, apple strudel in Germany, MacKorma meal in India and MacArabia in the Middle East. Other brands have been less successful abroad, such as Tesco’s US foray with Fresh & Easy. While it did much market research, it ignored many of the findings, insisting on using its UK approach such as pre-packed produce and self-service tills.
So while you may be a new or potential exporter, you too can enjoy great commercial success overseas with forethought and good planning.