Are you dreaming of going global with your business? You are not the only one. Accessing the global market is the ambition of many companies, but it requires strategic thinking, research, and a methodical approach. There are many aspects to take into account, and neglecting any of them could be hard on your budget. If you want to turn your white-board idea into a global reality this year, make sure you start at the very beginning and get to know the top five factors of expanding a business internationally:
- Market research and strategy,
- Laws and regulations,
- Local workforce,
- Marketing and culture,
- Languages and localization.
What to Consider When Entering a New Market? Start with Market Research!
Before launching in a new country, you need to assess the need, appetite, and readiness for your product in this new market. Here are some key questions for you to look into:
First, think about your product and its appeal:
- Does your product serve a need for that specific market?
- Is there any interest in it? Have you checked what customers really want?
- Are there aspects of your product you need to adapt to fit the local needs?
Then dig deeper into the landscape of the new market:
- Does the country have the necessary infrastructure and distribution network to sell your product?
- Do you have competitors there already?
- How strong is their brand?
- Is there a gap in your competition’s offering that you can exploit?
- Finally, take another look at your product:
- Do your unique selling proposition or points of difference address that gap?
- And again, because adaptation is key, are there aspects of your product you could modify to get ahead of your competition there?
Next Step: Define Your Scale of Entry into Foreign Markets
The insights from your market research will help you decide whether to invest or not, and just as important, they will determine your strategy, i.e. your mode and scale of entry.
Speaking of scale, you basically have two options:
- Dedicate a huge amount of resources to entering the new markets from the get-go, or
- Enter the markets gradually.
Which scale of entry fits your international expansion plan better?
If you go for option one, you will be sending a strong message of commitment to those markets and customers. Another benefit—and not the least of them—is that you could deter potential entrants. The downside, though, is that you could be taking a significant risk on your capital. Therefore, you need to run a health check on your company to ensure that going big is something you can afford.
The second approach–entering the market gradually–will give you the time to get to know the market even better and adapt to it. It will also be easier on your budget. However, it could make it difficult to build market share and, therefore, have a negative impact on your success. That’s why you need to continuously balance opportunities and risk factors.
Understand Local Laws and Regulations in a Global Market
Getting to know your target market calls for taking a closer look at the local legislation as well. Do this sooner rather than later as part of your risk assessment: think tax laws, customs laws, restrictions on import/export, corporate laws, liability laws, intellectual property, etc.
Marion Hamers-van den Boer, an International Business Development Specialist, explains: “Consider Europe and the United Arab Emirates (UAE) for instance: it’s common in Europe for legal changes to take time before they are implemented. But in the UAE, legal changes can be made at a short notice, and you should not be surprised that a law is changed in a week.”
Another example: do you know how long you need to keep your company business records for tax purposes in Europe? Well, it depends on the country! From five years in Norway and the United Kingdom to seven years in the Netherlands and Sweden, and to eleven years in Poland, to name only a few countries.
The Local Workforce is Your Gateway to a Local Market
As we have seen, the legal framework and requirements for any aspect of your business can vary greatly from one country to the next. Hiring local experts early in the process is a must because they know the ins and outs of the local laws: the procedures, the timelines, the recourses, etc. In addition to the letter of the law, they also understand its spirit: this puts them in a better position to foresee what could happen in any legal situation you may have to face.
Involving local teams can also help you understand local customs. Sometimes, it is not only helpful, it is a necessity. “In the UAE”, Marion Hamers-van den Boer says, “it is critical to have a local sponsor for doing business as a foreigner or foreign entity. Such a local sponsor represents your business in various ways, and, most importantly, they also represent you in front of the Government. “
Hiring locally requires some upfront preparation, though. You should check how skilled and educated the general workforce is in order to ensure it is a match for your needs. You should also review the local labor laws. If you want to set up your business in China, for instance, you need to make significant contributions to housing and social care programs for employees, a requirement that most Western employers would not normally expect.
Global Marketing vs. Local Culture
The big picture of expanding a business internationally gets even more complicated when cultural differences come into play: there are countless examples of marketing gone wrong due to an ill-chosen name or packaging that had not been properly adapted. Words, colors, images, fonts, symbols, etc. may have different meanings outside your domestic market.
For example, your marketing campaign should factor in local politics and religious beliefs. When Orange decided to offer its mobile network services in Northern Ireland, they understood that overlooking the symbolism of the orange color would be a mistake. Their slogan ‘The future’s bright…the future’s Orange’ would not translate well with Irish Catholics who associate orange with Protestant Loyalists.
Keep a wary eye on symbols as well. By way of illustration, Procter & Gamble did not understand why their diapers were not performing well in Japan. The problem: the packaging showed the typical image of a stork delivering a baby, which turned out to be confusing for the Japanese customers because, in Japan, the story goes differently: babies are brought to their parents by giant floating peaches.
How to Take Your Business Global: the Importance of Languages and Localization
Working with local marketing experts could make the difference between a successful launch and a commercial failure. The same will go with translators as you will need to localize your website, your packaging, and your documentation if you want your target market to adopt your products.
Localization goes beyond merely translating a text from one language to another. It means looking at the big cultural picture you want your product to find its place in (just think of the Orange example); it also means checking details such as icons and graphics because, again, symbols change from one culture to the next. Adaptation is the order of the day!
It is fair to say that the complexity of localization is often misunderstood, so the process comes as an afterthought for many businesses. This is an unfortunate fact that can have a serious impact on the planning of a launch and its costs, as well on the quality of the output, which in turn impacts the quality of your own product.
Rely on a Translation Management System for Expanding a Business Internationally
Being strategic and methodical when entering new markets means that you need to adopt the right tools, especially in your localization efforts. Having a systemized approach to localization with a translation management system (TMS) adapted to your business needs can indeed help you:
- Streamline your localization workflow by integrating a TMS with your existing tools and technologies,
- Boost team collaboration with everyone involved working across geographies and time zones on a single platform,
- Make project management more efficient in that you keep all files, translation segments, images, or glossaries in one place,
- Ensure translation quality thanks to a translation memory, suggesting matching results from past projects while translating new content,
- Diversify your messaging while staying consistent with your brand across markets by managing terms unique to your business in a glossary,
- Lower your costs sustainably thanks to machine translation.
The Conversation, an independent, non-profit global media resource experienced the power of a good TMS when they decided to localize in French. In only 10 weeks, they were able to manage a seamless and successful launch to the French market and are now continuing with their international expansion plan.
Finally, if you are looking into how to take your business global, get a head start: sign up for a free trial with Phrase, and simplify and optimize your localization process.
To learn even more secrets of expanding a business internationally, have a look at the following guides too: