Launching a global product sounds like the holy grail of business success. Not only does it help you build a recognizable brand, but it also allows you to tap into an unlimited pool of opportunities for revenue growth. Having a global presence will allow you to capture a larger market share and future-proof your business against any fluctuations in local market conditions.
However, expanding your business into new markets requires more than a mature product and healthy cash flow. Do it too late, and a competitor might beat you to it by capturing much of the market share in that country. Do it too early without being fully prepared, and your brand reputation might take a hit.
Here are five key things you need to do before taking the leap into international markets.
Consider If Your Business Is Expansion-Ready
It might be tempting to think that you’re ready to globalize your business if you’ve saturated your local market and see high demand for the same product in other regions of the world. You know that your product managers have poured their heart and soul into delivering a mature, user-friendly product that your customers love. You’re now excited to showcase it to the rest of the world. The temptation might be even greater if the products or services you offer are digital and with little overhead in terms of delivery.
However, before you venture down this path, consider if your business is expansion-ready from a people and operations perspective. You might be running a smooth operation in one country because you know the market well and have the right people in place. Still, launching a global product presents a whole host of new challenges that you need to anticipate and be ready to address.
Invest in a Knowledge Base
Do you have well-defined processes about all aspects of your business operations, from your sales and marketing processes all the way to handling customer complaints or inquiries? Is that information easily accessible to all your employees? In 2012, McKinsey & Company reported that the average worker spends staggering 20% of their time either looking for internal information or tracking down other employees to help them find answers.
Having company knowledge live in employees’ heads as opposed to being well-documented and streamlined across the board is not only costly, but it can also cause a lot of frustration with both employees and customers alike. A good practice here is to create a knowledge base as early on in your business as possible that will house all business processes, will be indexed, easily searchable, and updated on an ongoing basis.
Gear Up for International Customer Care
Building on the previous point, do you have resources to offer quality customer care and support in your new market? What kind of support do you anticipate your new customers would need? Would you be able to offer customer support in the new time zone? Are your customer reps trained on cultural sensitivity to ensure they respond to queries in a tone and voice that is appropriate for that culture? All of these things, though quite nuanced, can really add to the overall success of your global product launch.
Create a Financial Buffer
Do you have a revenue buffer to account for any potential launch flops? Even some of the biggest names like Coca Cola, Apple, and Microsoft have had product launches fail. While we all hope for success, we also have to account for potential failure and have enough disposable revenue to see us through the line.
When you’re making financial projections, look at the cost of not only the logistics of introducing your product to a new market but also at the cost of potential poor market response. As the saying goes, hope for the best but plan for the worst.
Understand Your Target Market
You might have read a study showing a growing demand for your services in Asia. You’ve done your analysis and know that you have the money, people, and infrastructure you need to take the next step into global expansion. However, high demand, while important, doesn’t necessarily guarantee success. There are other factors that impact your market positioning and dictate how well people respond to your product.
How Do People Like to Shop
Consider what is the purchasing behavior of your target market. For instance, a number of studies show that despite all the technological advancements in Asia, buyers are still reluctant to shop online which is currently in its nascent phase in many countries across the region. So, if you have a business that relies heavily on e-commerce, this might really block your expansion regardless of how good your product is. Think about what alternative payment methods you can offer that would be more in line with the expectations of the local buyer.
How are Business Decisions Made
Going beyond online shopping, you also need to consider how business decisions are made day-to-day. This is particularly important in B2B sales where multiple stakeholders can be involved at any given time.
Geert Hofstede, a Dutch anthropologist, has dedicated a big part of his career to studying eastern and western cultures and identifying how they respond to different aspects of life, including doing business. For instance, he’s found that the Japanese have a very low tolerance for risk-taking which often leads to extensive risk assessments and feasibility studies before they make a business decision.
Unlike them, Americans have a higher tolerance for uncertainty and therefore are more open to trying something new and untested. Having this knowledge upfront will help you arm your sales steam with the know-how they need to present your product in the best possible light.
What Product Adaptations Do You Need to Make
Finally, you’d need to think about your global product strategy and how your product fits in the new market. McDonald’s is a great example in this regard as the company has a whole department that works on developing country-specific menus and marketing messaging that resonates with the eating habits in that particular culture.
For instance, while Mcdonald’s in the US focuses on kids advertising, Mcdonald’s in Japan targets both adults and children and offers smaller portions to reflect the eating habits of the nation. This not only saved McDonald’s money on raw products and ingredients, but it also helped increase sales and capture valuable market share.
Find Local Partners
Partnerships are a key part of business expansion, but they often take time and money to establish. When choosing your partners, try to be creative. Traditionally, partnerships were built with local distribution partners or other firms which offer products or services adjacent to yours.
Take Docebo, for instance, a learning management system that partnered with Open Sesame, an extensive library of e-learning content. The LMS doesn’t come with any pre-existing content library and training organizations normally have to source their own content. The partnership with OpenSesame has made it much easier for businesses to find and play content straight from Docebo without having to worry about interoperability.
Nevertheless, these types of partnerships can take a long time to form and can cost money. If you’re looking solely for local champions to spread the word for your product, you might be better off going with local influencers and thought leaders.
Influencer marketing isn’t reserved only for B2C sales as IBM has clearly demonstrated with its IBM Futurists program. IBM has successfully capitalized on its influencer marketing strategy by partnering with individuals who are experts in technology, social media, and marketing and who have a huge following as a result. These types of influencer partnerships are faster to make, less costly, and can be just as beneficial as a traditional partnership if done right.
Either way, make sure you do your research well in advance and choose businesses and individuals that truly represent your brand values.
Think About Intellectual Property
When planning your expansion into a new market, it’s a no brainer that your team would research local tax and customs regulations. They’d probably also look at any compliance requirements before you can sell your products and services on the local market.
However, problems can arise after the fact if it transpires that your business name sounds really similar to that local gym equipment reseller, or if your logo really looks like a rip-off of that make-up art studio everyone talks about.
You might have heard of the case of a local Korean fried chicken restaurant which was creatively named LOUISVUI TON DAK which promptly earned them a lawsuit by the fashion giant Louis Vuitton and cost them $12,750 for using their name for a whole of 29 days. The opposite might happen as well if your international business infringes on the IP of a local or a national business, so tread the IP territory with caution.
Owning your IP assets can be a huge advantage not only in expanding your business globally but in its overall valuation. In contrast, the lack of registered IP assets can cost your business millions in lawsuits, not to mention the irreparable damage it can cause your brand. In this context, you’d need to develop a sound IP strategy and decide on what type of IP you’d like to register. The type of IP assets you’d need will depend on the type of product you offer.
For example, if your product is a mobile app you might be better off with a trademark as opposed to a patent because your app is likely to evolve and change over time. If, in turn, you’re selling a proprietary unbreakable glass, then a patent will ensure that nobody can replicate your invention and claim ownership over it.
Once you’ve decided what IP assets you’d like to pursue, do your research if they already exist in your target market. The World Intellectual Property Organization (WIPO) has a wealth of information on its website as well as global databases on existing brands, designs, and trademarks across the world which can help you find out if similar trademarks or designs already exist.
Update Your Tech Stack
Finally, after all is said and done, you need your end buyer to find and fall in love with your product before they give you the coveted ‘yes’. And yes, we do mean fall in love. Harvard Business School professor Gerald Zaltman has found that 95% of our purchase decision-making is based on emotions rather than rational thinking. You need to make your customer feel a certain way in order to get them to buy your product and you can’t do that if you don’t speak their language, figuratively and literally.
This is where translating and adapting your product to your local market comes into place. Haven’t given it much thought, yet? Not to worry, we have your back. Preparing your product for a new market goes beyond translating your website into another language.
As part of your product globalization strategy, you need to think about what adjustments you need to make to the UI and back-end code of your product to make it easily adaptable to new alphabets and languages where keywords can be much longer than the original language.
Another aspect you need to consider is adapting your story, cultural references, and overall language so that it resonates with the world your buyers inhabit, also known as product localization. Localization helps turn your product and service into something that will sound familiar to your new audience.
Netflix is a great example that took its localization efforts seriously and managed to gradually expand across 190 countries in seven years. They started off cautiously with Canada, but soon expanded in other regions when they had the infrastructure and know-how to offer localized web and mobile applications in the languages of their target market.
A translation management system doesn’t only facilitate translation in real-time, but it also serves as a collaboration tool and repository for all your content files. This setup keeps your product up-to-date at all times. Investing in a sound, cloud-based platform that can easily embed in your tech stack and support the evolution of your product can save you tons of money and time down the line when you work on your global takeover.