What are the factors to be put into consideration for a firm trying to enter a new global market As with any new business plan, the first step you should take before crossing borders is to do your homework. Take these 20 critical factors into account before you begin:
Factor 1: Get company-wide commitment. Every employee should be a vital member of your international team, from the executive suite to customer service through engineering, purchasing, production and shipping. You're all in it for the long haul.
Factor 2: Define your business plan for accessing global markets. An international business plan is important in order to define your company's present status and internal goals and commitment, but it's also necessary if you plan to measure your results.
Factor 3: Determine how much you can afford to invest in your international expansion efforts. Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford process?
Factor 4: Plan at least a two-year lead-time for world market penetration. It takes time and patience to build a great, enduring global enterprise, so be patient and plan for the long haul.
Factor 5: Build a website and implement your international plan sensibly. Many companies offer affordable packages for building a website, but you must decide in what language you'll communicate. English is unarguably the most important language in the world, but only 28 percent of the European population can read it. That percentage is even lower in South America and Asia. Over time, it would be best to slowly build a site that communicates sensibly and effectively with the world.
Factor 6: Pick a product or service to take overseas. You can't be all things to all people. Decide on something. Then stick with it.
Factor 7: Conduct market research to identify your prime target markets. You want to find out where in the world your product will be in greatest demand. Market research is a powerful tool for exploring and identifying the fastest-growing, most penetrable market for your product.
Factor 8: Search out the data you need to predict how your product will sell in a specific geographic location. Doing your homework will enable you to find out how much you'll be able to sell over a specific period of time.
Factor 9: Prepare your product for export. You should expect to adapt your product to some degree for sale outside your domestic markets before you make your first sale. Packaging plays a vital role in enabling international connections. Make yours the best in its class, and you'll be able to sell it anywhere in the world.
Factor 10: Find cross-border customers. There is no business overseas for you unless you can locate customers first.
Factor 11: Establish a direct or indirect method of export. It all boils down to export strategy and how much control you wish to exercise over your ventures. On the other hand, readiness to seize an opportunity is more important than having your whole strategy nailed down beforehand.
Factor 12: Hire a good lawyer, a savvy banker, a knowledgeable accountant and a seasoned transport specialist, each of whom specializes in international transactions. You may feel you can't afford these professional services, but you really can't afford to do without them.
Factor 13: Prepare pricing and determine you’re landed costs. Be ready to test out your price on your customer. See what reaction you get and then negotiate from there.
Factor 14: Set up terms, conditions and other financing options. Agree on terms of payment in advance, and never, ever sell on open account to a brand new customer. No ifs, ands or buts. Just don't.
Factor 15: Brush up on your documentation and export licensing procedures. If you find it too time consuming, hire a freight forwarder who can fill you in on the spot. Ask a lot of questions. Use their expertise to your advantage.
Factor 16: Implement an extraordinary after-sales service plan. The relationship between your company and your overseas customer shouldn't end when a sales is made. If anything, it should be just the start of a long relationship which requires more of your attention. The "care and feeding" of your customers will determine if they keep coming back for more.
Factor 17: Make personal contact with your new targets, armed with culture-specific information and courtesies, professionalism and consistency. Your goal should be to enter a different culture, adapt to it and make it your own.
Factor 18: Investigate international business travel tips. The practical aspects of international business can make or break the success of your trip. In preparing to go boldly where you've never gone before, plan accordingly.
Factor 19: Explore cross-border alliances and partnerships. In charting your global strategy, consider joining forces with another company of similar size and market presence that's located in a foreign country where you're already doing business, or would like to. Gauge your readiness-or willingness-to take on a 50/50 partnership and what it can and cannot do for you.
Factor 20: Enjoy the journey. Never forget that you are the most important and valuable business asset you have, and that the human touch is even more precious in our age of advanced technology. Take the best possible care of yourself, your employees, your suppliers and your customers, and your future will be bright, prosperous and happy.
Going global doesn't have to be a scary proposition. By considering and developing these twenty essential factors before going global, your organization can realize the full potential of globalization and capture dramatic revenue growth.