10 steps & 10 questions to be excellent in foreign markets.
A lot of questions, but what should I do first ?
10 steps that will help you in internationalization ď Ż
1. 2. 3.
All 10 steps we can split in 3 phases Assessment phase (steps #1,#2) Planning phase (steps #3 till #5) Implementation phase (steps #6 till 10)
Step #1 – Are you ready to export? 1.
Company readiness to export (CORE) evaluation
CORE analysis – shows companies strengths and weaknesses in context of exporting CORE – gives the company some guidance what steps they should take before next steps This evaluation is critical beginning point – for some companies CORE shows that they can export immediately, for others that they should concentrate on local market
Step #2 – Are your product so unique? 2. Company assessment
Niche market – when company decide to enter foreign markets it should find niche to expand Competitive advantages – Also company must analyze its activities to find unique competitive strengths
Value chain analysis ď Ż
Is tool that help you analyze all company's activities starting from marketing and finishing with after sales service to find your unique advantages
Step #3 – Are you enough strong in your home market? 3. Reassessment of the domestic business plan
Companies that succeed in foreign markets have established a strong, viable position in home market. First you should make your company visible in your home market, and only then start to think about internationalization Company should have a business plan for next three till five years for domestic operations
Step #4 â€“ Which is the best market for internationalization? 4.Global assessment of markets and competitors ď Ż
In this step company choose best countries and markets for company's products, and strategies for entering this markets (exporting, manufacturing, licensing, franchising, joint ventures, strategic alliances, etc.) This step also includes strategic planning.
Strategic planning – way how to guide company in the development of its initial global strategic plan includes such elements as: Mission statement Statement of objectives and goals Situation analysis ( SWOT, overview of global markets, environmental issues that affect the industry, etc.) Product line and pricing analysis Assessment of key factors for success in the industry Action programs to implement the strategies
Step #5 – How can I use my company’s CORE competences to enter target market? 5. Foreign market entry planning
Next step is develop a detailed plan for entering those markets. You should use your CORE competences, advantages against your competitors Either it’s necessary to coordinate and configure value chain activities which was developed on Step #2.
For each target market company should include items such as:
Company’s objectives (market share, sales targets for first years, profit objectives, etc.) Background material ( economy, politics, cultural issues, etc.) The opportunities and obstacles in the country for the company in business sector
Step #6 – Who will be my best partners 6. Identification and selection on partners
This steps includes identification, selection and contracting with strategic partners ( distributors, sales representatives, licensees, dealers, franchisees, etc.) To engage this process company must develop a business portfolio describing the company, it’s products, services and potential benefits
Step # 7 â€“ Do you really know where are you going? 7. Compliance with standards and regulations ď Ż
A lot of standards and regulations with which company meets in foreign market. In every country rules and laws are different, and before internationalization company must know them all. ( safety, electrical standards, patents, etc.) Suggests to take an expert help to understand all standards and regulations
Step # 8 – Who will support me in host market? 8. Selection of service support providers
No matter if company have export department or company is just exporting products to other market, they still need some help to get product to the customers. Selecting service providers in foreign markets is much more difficult, because it’s very important to use good local services (bankers, market research firms, tax accounting firms, etc.)
Step #9 – How you will introduce with your product? 9. Market introduction of company’s products and services
Distributor – some companies choose distributors in a foreign market and let them do an effective job of introducing product Market introduction in foreign market should be planned with the same care as any market introduction in domestic market.
Companies should work with foreign distributor , to plan every detail of product in that market. ( sales training, service training, advertising and promotion, product modification, public relations, etc.) Great benefit of this planning is that brings to light issues that have not been resolved before, such as: Who will take what responsibility? Who will do the translations? Who will print the product literature and operating manuals? Who will prepare the artwork and etc.
Step # 10 – What should you do now? 10. Establish a physical presence in a foreign market
If a company proceeds to the point where it feels confident enough about it’s progress in getting into foreign markets that it wants a physical presence (telephone answering services, secretarial support, etc.)
The need for “Coach” – international business development professionals
Without some guidance in this process, it will be very difficult for any company to use this road map successfully “Coach” – people, company that will help you select the best service providers, distributors, franchisees and others from which depends success
Find your way – this road map isn’t that you should follow exactly step by step. You can jump around from step to step and take short term actions that will enable it to take advantages of opportunities. Short term actions should agree with long range plan – you can change a map but, a short term sale might lock the company out of the best long term relationship, and from getting maximum benefits from market
Use your experience – assuming that company's has been in business long enough to establish a viable presence in domestic market, it has learned how to deal with complexity of business (how develop market, promote new products, deal with logistics) So company must use this experience in host market Changing environment – experience in domestic market is helpful but that doesn't ensure success internationally. Environment in every country is different and its constantly changing. All countries with their unique characteristics. That's way you should develop products for international market, but adapted to suit local culture and behavior – Think global, act local
References : 1. Myron M.Miller - Executive insights: 10-step road map to success in foreign markets