11 May Competitive Advantage from International Expansion
Author: Allyson Stewart-Allen, Chief Executive of International Marketing Partners London
For the majority of small- and medium-sized businesses like yours to win overseas, you must make sure you’re ready – structurally, operationally, culturally –in order to derisk this wildly exciting and usually profitable strategic pursuit with many distractions and tests along the way.
As we explored during my talk at your 360˚ Club event on 25 April, the beauty of being an SME or MSB on the path to global growth means your speed, energy, focus, ability to pivot, clear differentiators and structural fluidity makes you more agile than your older, larger competitors that often cannot mobilise talent, cash, IP or other know-how as quickly. Which of course means great opportunities await your business when you get it right.
And getting it right means ensuring “international” is part of your strategic plan and not merely an opportunistic response to clients or customers that pull you into new markets. Having worked the last 25 years to grow companies abroad has let me lift the lid on the wide range of approaches companies deploy to conclude what works, and what doesn’t – so here some top tips to help you avoid the mistakes that have disrupted so many businesses expanding abroad:
- Poor research, immersion, insights from not enough time spent in the market – there are no shortcuts.
- Having a closed culture, one that’s not curious or allows for experimentation. As my MBA professor Peter Drucker often said, “culture eats strategy for breakfast” (P Drucker). Assuming success is also part of that culture rather than being tentative in exploring and exploiting international growth.
- Lack of resources. Whether it’s time, cash or leadership talent, allocating realistic payback periods and budgets for exploratory trips is essential. The “international” ambition must be part of your business strategy to succeed, not just an experiment.
- Do your homework. Knowing what localisations will be needed can only happen from an immersion in the target geography. The more time you and your top team spend in the market, the more you know what will need to be adapted. Many examples – from Apple to Spotify – have discovered not everyone is the same everywhere. Conducting the market research is essential.
- Knowing the structure of the industry, ecosystem and stakeholders. The more you appreciate the players, interests and motives, the more likely you are to choose the right strategy and local partners to win. Many make assumptions about the sophistication, complexity and evolution of the overseas market(s) which must be checked and challenged.
- Don’t wait for perfection. Iterating your designs and business model is a great idea, only don’t wait until your product/service is 99% ready, or even 85% ready. Most US tech companies go to overseas markets with a beta version that’s 70% ready so they can learn while capturing value, establishing their brands and shaping the market.
- Last but not least, protect yourself. Leaving your IP open to copying or theft is more common than you might think. Ensuring you get legal advice from the start of your overseas expansion planning means you can avoid lengthy and costly battles that can distract you from focusing on growing the business.
So what this all means is that being intentional, strategic, informed and focused raises your chances of enjoying large dividends from your international expansion. Learning from the mistakes of others, doing your homework and taking expert advice will make the difference between winning and losing.
The club’s next event will be on the 20th of June at the Grange Hotel in St Pauls. Contact the club manager email@example.com for more information.
Allyson Stewart-Allen is Chief Executive, International Marketing Partners Ltd. A broadcaster, keynote speaker and author of “Working with Americans”, she is a London-based Californian for over 25 years, helping leaders and their companies internationalise. www.intermarketingonline.com