Thrive in a new market
by Alice Arandia, Business Consultant & Intercultural Skills Coach
I was recently speaking to someone who told me they had tried to expand their business abroad but that it was “impossible to work with people in that country”. I am not specifying country to avoid further stereotyping and because I really struggle with this attitude. It is always so easy to blame others, without reflecting on our own mistakes.
So, what can businesses do to help drive effective expansion strategies?
Research, research, research
If you are considering expanding your business in another country, be that to sell products/services in new market or provide support for an existing client in that market it should go without saying that you must carry out in depth research first.
A few of the many things to consider:
What is the current political and economic climate is like?
Who are the competitors in the market, and what are they doing?
Which regulations must you follow (e.g., are their tax withholding laws, what is immigration policy, employment law etc.)?
What do you estimate your overall cost of market entry to be?
The more research you do, the better prepared you will be.
Don’t Assume!
You might think that knowing your product or service inside out and having a proven track record of success in another market would be enough to secure success in a new market. Unfortunately, this isn’t always the case.
Your sales and marketing strategy might have worked at home, but it doesn’t necessarily work in another market. Even the management style you use may well need to be different. Listen to and observe others in the local market and learn. Sometimes there may be things you can do differently to others in the market but don’t make that decision without first having an open mind to why things are done in a certain way in a new market.
Many companies underestimate cultural differences. Success of the best product or service can be jeopardised in a new market simply by personnel not understanding local business etiquette. Take the time to learn about the local business customs, it truly pays off in the long run. Our norms and behaviours are often subconscious – we don’t even think about how they are influenced by our own cultural background. If we do not gather knowledge about another culture, we may not realise that something that seems normal to us is abnormal to others, or even insulting when viewed through a different cultural lens. Obviously, this goes both ways, and this is why open communication is critical.
We have found time and time again that companies that understand and respect local cultures, and value local knowledge, are far more likely to succeed than those that don’t.
Build a local network
In some countries, as is the case for example in Latin America, relationships are very important. If you don’t take time to build these relationships with stakeholders, to socialise and get to know them personally first, you are unlikely to succeed. Vice versa, Latin American companies trying to do business in for example UK need to understand that people tend to be more task based; time keeping for example is very important and meetings often follow a strict agenda.
Seek support
A client recently came to us struggling with a project in Peru. They were running over budget and facing delays due to miscalculations that had been made right back at the tendering stage of the project. We worked with them to investigate the cause of the issues which it turned out came down quite simply to a lack of local knowledge. We were able to provide them with highly competent local personnel, and the support they needed to execute the project successfully. It was great that they recognised they had made a mistake and took action to resolve it. Another company however might persevere, convinced they knew best, fail, and then make that common claim “it was impossible to work there”.
Don’t be afraid
Expanding abroad may seem daunting, but if you don’t push yourself outside of your comfort zone you risk losing out on a wealth of international business opportunities. At Finch Global we specialise in guiding businesses through their international expansion. We cannot claim to have first-hand experience in every country, but we do have on-the-ground industry experience in working across borders, with diverse groups, under vastly different governments and regulations, and we do have a lot of first-hand experience working in Latin America and Central Asia.
Contact us to see how we can support your international business development.
