The next and final part of our tips to help you construct your international development strategy. The first part of the article can be accessed here.
Included in this second part: the commercial approach, customer service, the corporate culture, financing and the “lean startup” concept!
4. Define a specific approach to use when setting up in a foreign country
To make your international development a success, you will need to define not only an overall commercial strategy but also a specific approach to use for each different country where establishing your initial presence is concerned.
Make your first customers in the new market reputable, high-profile ones
In order to build legitimacy and attract large numbers of customers in your new markets, it is essential to quickly attract reputable customers of significant standing, preferably ones that lie right in the middle of your target customer range in terms of company size, business sector, etc. Even if you only have one, a high-profile customer will assure you of genuine expert status in your chosen field. There are several methods you can use to obtain your first high-profile customers:
- Partnerships with companies providing complementary solutions and which are already well-established in the market;
- By purchasing qualified leads;
- Attendance at trade fairs and local events;
- A partnership with a consultancy, etc.
Once you’ve found your reputable, high-profile customer (or customers!), you will need to develop and maintain a good relationship with them and capitalise on their experience with your company: produce customer case studies and make them available for download on your website; have them take part in events you organise, or do joint presentations with them at trade fairs or local events, and so forth.
Choose an appropriate distribution model
There are several options available when it comes to launching your business in a new market: you can sell your products via special marketplaces, on your own e-commerce website, through a local wholesaler, or through major stores and retail chains in the market. If you are a seller of services, you will need to recruit a local sales force and put in place a classic sales structure, i.e. lead generation and prospecting, closing, account management and so forth. You can also opt for a mixed distribution model, one that operates through both a local team and a network of partners (i.e. marketplaces and/or distributors) and that you’ll be able to manage from a distance.
No matter which approach you decide to adopt, having a local sales force in place is essential. There are several ways to go about the task of putting together a local team:
- Recruitment of a local manager who is native to the country: their network of contacts and market knowledge will be real assets when it comes to putting together a solid team;
- Parachuting a commercial manager from your traditional market into the new market: they will know your company and its strategy like the back of their hand and will have the ability to determine which people and personality types will integrate well with your corporate culture.
Choose the right structure
Working hand-in-hand with your commercial strategy, the structure you choose needs to enable you to maintain your presence in the market over the long term. There are several options available:
- Opening a local subsidiary: this is the option often chosen for particularly strategic foreign markets
- Opting for a simple sales-based representation: a good way of testing the market without incurring too many costs
- Acquiring a competitor business: with it already established in the market, you’ll be able to turn it into an immediately operational local branch.
Adapt the way you relate to customers
Customer relations is one of the tricky areas you need to get right when expanding internationally: your prospects and customers in Europe won’t expect the same thing from your company and your commercial team as your prospects and customers in the United States, and vice versa. Though you may be used to not pressuring prospects by “harassing” them on the phone in your own country, in the United States it’s important to make quick contact in order to avoid creating the impression that you’re not really interested.
The departments that deal with customer relations (i.e. the sales and support teams) must be able to both communicate with prospects and customers in their own local language and adapt to their local hours.
6. Instil the corporate culture of an international business
Though management methods and good practice in terms of human resources differ from one country to another, it is nevertheless important to build a corporate culture that is both global across the company and common to all your markets. The company’s values will need to be understood and shared by all employees and in all markets in which the company is established.
The use of a common language is something else that can help to facilitate communication and understanding between different local offices: as a minimum, consider having your internal documents and intranet, etc., translated into English, and preferably into each of the different languages spoken within the company.
Important: it is essential not to ignore local cultures, which will need to be integrated into the overall corporate culture. For more information, please see our blog post on the topic: “How do you keep your corporate culture if you expand internationally?”
7. Locate sources of finance
There are many financing methods available to companies looking to expand internationally. You can either focus on just one of these approaches or, as many businesses do, use them in combination.
Investment funds
Like many startups undergoing international development, you can opt to assemble the capital needed to fund entry into a new market by conducting a fundraising operation targeted at an investment fund. There will be many funds of both national and international types that specialise, to some extent or other, in your business sector or in businesses at the stage of development yours is at. One thing you can do is search through online investor directories.
You will need to put together a comprehensive dossier containing, amongst other things, your executive summary, a description of your market positioning and what advantages you offer that differentiate you from the rest, a study of the market and the competition, details of your high-profile customers, the management team for the market in question, your business model, and a balance sheet complete with figures. Beware of setting yourself overly optimistic (and therefore impractical) targets. Be ambitious, but be realistic!
Bank loans
Though it represents a major challenge, it is of course possible for a company to get access to a business loan in order to finance its international development. If planning to do this, the best idea is to get the help of an expert who can advise you about which banks to approach (it would be risky not to investigate all the possibilities!) and give you good tips about how best to put together your dossier and negotiate with the bank.
Government assistance
Here again, institutions such as the British Chambers of Commerce, the Department for International Trade and the Institute of Export & International Trade can help you with putting together your dossier and deciding what should go in it when it comes to obtaining government grants and assistance. The state, local authorities or even trusts and foundations can help you finance your international development.
Individual investors, aka business angels
A business angel is a private individual, either working or retired, who chooses to invest a portion of their financial wealth in a business. Often entrepreneurs or company directors, business angels have both money and a wealth of experience to offer you: they are very familiar with how businesses work, and there is often very little they don’t know about the challenges involved in expanding and developing internationally.
8. Adopt the “lean startup” approach
No matter whether you’re a startup, a well-established SME or a major group, you have everything to gain by adopting the “lean startup” approach. This consists of structuring your development in iterative phases, i.e. product/service launch followed by analysis, and so on, repeatedly, until your product or service meets the needs of the market as closely as possible.
The idea: get there “one small step at a time”. Rather than operating by means of enormous projects lasting several years, do things via small projects undertaken on a regular basis and which require less investment (in both financial and manpower terms).
The benefits: faster decision-making, you are able to measure progress more frequently and regularly, and though there is a risk you will make mistakes, it will be easier to undo the damage. You’ll also be able to detect any failure that occurs much more easily, and this will make said failure much easier to accept!
There are as many international development strategies as there are companies: you cannot do everything, do it all immediately, and get it all right. There are no exact guides or fixed strategies. You will need to adapt yourself with respect to all the points mentioned and in accordance with your size, your ambitions, your resources and your target markets. But the reassuring point to bear in mind is that you are not alone: surround yourself with experts, entrepreneurs, financiers… in short, all the different kinds of advisors that can help you build the perfect strategy for you business.
To help you build your international development strategy, take inspiration from our ebooks and whitepapers on our Resource Center!
