Going International!

So you’ve expanded your business on a national scale and are satisfied of the success you have had. But with the current recession, you are thinking it’s time to expand your business internationally. Asia sounds good. China is forecasted to still grow at around 7%. However, this is definitely, not a walk in the park. There are several factors to consider. One thing that is important is to understand the business culture. A vacation trip to your targeted country doesn’t qualify you as an expert in the country’s business culture. After all, haggling to get the price down for those great leather shoes in the local shop doesn’t mean you are an expert in their business negotiation techniques. Different cultures have different beliefs and values that influence the way they do business.

For instance, Chinese, Japanese or Korean business people will hand their business cards with both hands as a sign of respect and sometimes with a slight bowing of the head. You will need to receive their business cards with both hands as well. Respect and saving face is very important in this culture. Whereas, for Europeans, especially Germans, it is important to include their title such as Dr., then their last name when addressing them. I guess it has something to do with their monarchial heritage. Americans are used to first name basis, in Europe, they use their last names, even when they answer the phone.

Business language is also important. I remember a Chinese colleague who was assigned to head up our Japanese sales office. The company paid for him to learn how to speak Japanese. But he told me that what he learned was useless for the business world. He learned how to talk with the grocery attendant and his son’s teacher but wasn’t able to use that when speaking with customers. He eventually learned though, after several years in the business.

Understanding the business culture and language are only the tip of the iceberg. It is important to find out what sort of government regulations they have for your industry and their importation laws and duties as these may easily eat up your profit margins.

Most governments however, welcome foreign investments and have set-up government agencies to assist investors. It is important to contact them first even before visiting the country to get as much information as you can. It could save you a trip, or help you plan for the places and persons to meet and who you would want to be on your team when you visit. If the country you’re visiting doesn’t speak English, make sure that you hire a local interpreter who could also act as your "tour guide".

A key ingredient is market research. You’ll need to understand the competitive landscape and how to market your products in that country. For instance, the Japanese market is dominated by the Keiretsu, which is a strong alliance of companies with interdependent businesses and common shareholders. Coupled with Japanese patriotism for Japanese products, most foreign companies have failed to capture the Japanese market. Successful penetration of the Japanese market was usually done through Japanese joint ventures or acquisitions.

Lastly, hire a great leader who understands your corporate culture and values and has worked in the foreign environment so that he/she can adapt your culture and values to the foreign culture in a professional business setting. Having this type of person will make it so much easier and faster for your company to reap the benefits of your geographic growth initiatives.

Great Market Intelligence Builds Solid Strategic Plans

Building a solid strategic plan for your business needs great market intelligence. Market intelligence includes understanding your competition, your customer and yourself. The simplest way to start is to build a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of your company and your competitors. Doing a SWOT analysis on your customer and its competitors on the specific brand or products that you supply to is also beneficial.
The strengths and weaknesses often describe the current scenario. Opportunities and threats are possible future scenarios.

Compare your SWOT to your competitors’ SWOT analysis. Highlight those that are unique to you or items you know you are way beyond the competition. Next look at your key customer’s and their competitor’s SWOT analysis and do the same. Does your unique strengths match your customer’s? Do you see that contributing to positioning your customer against its competitors? The next thing you should then look at is your customer’s opportunities and threats. Do you see any of your strengths helping the customer to achieve its opportunities or remove its threats? If your answers to these questions are all negative, then you know that your position with this customer is not strong and may soon be replaced.


But it’s not too late. Great strategic plans highlight areas you are doing well and areas you need to improve. If your position with your key customer is not so strong, then what areas do you need to change or improve to advance your position? List initiatives to address these areas of improvement. Then list the possible barriers for your company to achieve this initiative, both internal and external barriers. Is there a way you can overcome these barriers?

Another important aspect of the market intelligence in your strategic plan is determining the size and growth of the market, your market share and your competitors’ market shares. You also need to find out your customers’ share and how they fare against its competitors. Concentrate on the market share of products you are selling to or you can sell into with your current products and capabilities. Most marketers call this your Served Available Market or SAM. Next you should also look at the Total Available Market or TAM which is your total opportunity. This along with the market growth rate could help you determine if it is worth developing a new product or technology to address your "un-served" market and eventually come up with a technology or product road map.


Getting accurate market size, growth and share is usually difficult. A starting point is usually buying research reports if they are available. But most of these reports are at least one or two years late. Getting inputs from your sales team, product managers, distributors and reps are always helpful. They could give you a sense of what is currently happening. Looking into company websites and their annual reports are also helpful.


A solid strategic plan is never done by just one person and is never done just once a year. It needs to be developed with contributions and consensus from every department - sales, marketing, manufacturing, R&D, purchasing, human resources and finance. And depending on your type of industry, it needs to be revisited and refreshed on a regular basis. Progress reports to senior management enforces execution of the strategic plan which is an area where 90% of the companies fail.

All in all though, a strategic plan is only as good as the market intelligence behind it. So start now by gathering as much information, every news or customer, competitor or even supplier encounter is always a chance to add more into that market intelligence bank.

Invest now?

Nowadays, companies have refocused their attention from expansion and growth to downsizing and basically surviving. My question to them is, where do they think they will be once the economy starts turning around? Simple, they will be down there with all the rest trying to catch up. While companies that have invested, developed new products, hired those great people that these big corporations let go, manufactured these products using materials from companies that have excess inventory; are already in the game with those great products and a great marketing strategy in place to capture the share of their competitors who have downsized themselves.

Corporations have been so worried looking at the bottom line that they have hit rock bottom. It's like watching those movies where after the cloud clears, the pilot sees that he is about to crash then lets go of the wheel, raises his hands or even covers his face and starts screaming then crashes. You would think that he would put all his effort in pulling that wheel to steer the plane up to avoid crashing or even before that happens, monitors those gauges so that he doesn't get a surprise when the clouds clear. If it were I, I would have died trying, after all, I still have command of the plane. But that's in the movies. Hey, wait, what am I talking about, it's happening now in big corporations. The CEO upon seeing that they are about to crash raises his hands in surrender, covers his face (from the stockholders) and starts screaming, actually declaring bankruptcy!

I am no economist, but I think it's just common sense to think that if there's anyway out of this recession it's not by adding more unemployed people to the jobless community who won't be able to pay for the products and services your company is providing. It's like adding coal to an already burning building. If each company started investing (of course you better have a great strategy behind that investment), hiring and purchasing, then people will start having more confidence in our economy and start buying and continue buying as well. We can't rely on the stimulus to sustain us. Just like we can't rely on construction projects to sustain permanent jobs. Once the project is over, so are the jobs. This is why I believe that creating new business that eventually generates new jobs that are permanent is more important.

If there was anytime for a company to invest, it's now - surplus of smart and talented people, excess material inventory, great and discounted products and services... Now, if we could just have the banks to ease up on their credit. (I thought that was what the bailout money was for? I'll save this for another blog. I'm sure you have a lot to say about this too.)

If you believe that time is money, don't wait 'til the dust has settled. Invest now and before you know it, you'll be at the finish line while your competition is just starting.