There was a time when people used to see beloved ones living abroad in years. Now technology has changed everything. Distances have reduced, and connectivity has radically improved. The world has become a global village. In this modern world, international connectivity and approach define success. From education to employment, every field of life is diverging its reach and is growing beyond borders.
One domain of human life that is the most prominent on the international spectrum is business. In the world of business, growing beyond borders has become the flagship determinant of success and prosperity. Therefore, more and more companies are opting to expand operations to countries internationally. It provides an enormous market reach and access to new customer bases and enables a business to explore its potential. According to WITA, the export of global goods has reached a whopping $18.4 trillion. On the top, the world also trades $5.9 trillion of services.
These figures might seem highly encouraging. However, managing an international business is no cakewalk. Running a global business successfully requires precise planning and respect for global norms. It is a series of strategic decision-making. Which country to enter? When to enter? What level of market presence to acquire? What scale of operations to target? There is a never-ending list of such factors, and this article provides a detailed insight into it. It mentions five strategies for managing global business locally.
Have a skilled team of professionals
Understanding the local market behavior requires specific expertise. And so, you must upskill your existing employee base through proper training and development. Online education provides promising avenues for such training programs. We advise you to opt for online masters in business that provides necessary insights to your employees to deal with global business challenges.
You can only manage international operations efficiently when you have a dedicated team of professionals. Global business has different challenges than managing a local business. Therefore, it demands a separate skillset. Moreover, no one would want to disturb a well-running business because of global expansion. An independent team of professionals to look after your international presence saves you from any unnecessary turbulence.
Applying proper due diligence
Understanding a country and its local environment is not an easy task. It takes time, proper strategy, thorough planning, and an in-depth study. Therefore, any business entering into new markets must carefully study it. It must apply appropriate due diligence and consider every factor that can impact its business.
Companies usually purchase research data from research firms. Some also conduct research themselves before entering into new markets. Understanding consumption trends and customer preferences are essential in forecasting market yield. It estimates the required marketing investment and the resultant marketing Return on Investment (ROI). World Trade Organization has already calculated a 7.2% increase in international trade in 2021. It means more players will enter the global markets. Therefore, proper due diligence becomes even more important to stand a competitive advantage.
See Also: The Importance Of Employee Training
Strengthen the communication
Most importantly, communication is about communication with the local customers, which includes extensive marketing efforts. It revolves around elaborate marketing campaigns that convey a company’s product offering and its market value proposition. Ultimately, all these marketing campaigns must respect the local customs and traditions.
Zappos had a viral advertisement where a naked couple walks on the street wearing shoes they ordered from Zappos. It was a successful marketing effort in the West. However, people would certainly not welcome it in the East. It can incite a huge negative outcry from the public. Many other brands have similar marketing campaigns that they cannot simply replicate in other parts of the world. Marketers need to study and then design their communication accordingly.
The most critical factor in managing a global business is respecting the local law. Most companies face huge fines and duties due to violating local trade laws. Alstom, Siemens, Kellogg, and BAE Systems have collectively faced about $2 billion due to international trade law violations. Even giants like these have to go through a hard time because of these financial losses. These fines will certainly destroy an emerging global business. Therefore, respecting local laws is of great importance.
Most businesses fall into legal pitfalls because they consider their native laws to comply with international standards. However, there are numerous local laws and administrative prerequisites that can create serious problems later on. Volkswagen had to pay a whopping $14.7 billion due to the emission scandal in the United States. Their European compliance standards were not enough in the United States.
Proactive Business Plan
You will change your strategy when the competitor does. Well, this might work in your existing market but not in the one where you have just entered. The reactive business approach fails for a global business. You need to be proactive and make decisions before they have become inevitable. You have to develop an eye to notice the changing market dynamics.
Your business must incorporate the necessary changes in the business strategy before it has become too late. It is only possible when you are proactive in your business plans and actively monitor the markets. The wake of the COVID pandemic also showed us the same. Companies that proactively reacted to the changing business landscape survived. In contrast, the usual reactive ones failed miserably.
Going global is every business’s dream. International expansion holds the key to exponential growth and market recognition. However, it comes with real challenges. You can tackle them with the strategies mentioned above. You must carefully devise a sequence of strategic decisions. Your communication must respect the local taste, and you must thoroughly study the local market dynamics. Then, international markets will become your playing field.