Every entrepreneur plans to take their business global at some point. But for many, conquering global markets remains simply an aspiration, and for others, this dream may even turn into failure.
According to a study conducted by Harvard researchers, looking at data from 20,000 companies from 30 countries, found that most of them had a return on assets (ROA) of -1% during the first five years of selling abroad. And only 40% of these companies made more than 3% ROA after ten years of being on the international market.
However, these findings do not mean that you should stay away from going global. Oftentimes, a company’s failure to expand overseas is the result of miscalculation and the inability to plan long-term. After all, there are significant risks involved, and businesses need to take them into full account.
So, what’s the right way to take your business global successfully?
There is no one single solution or easy route to taking your business global successfully, but there are a few important strategies businesses must not skip if they want to effectively integrate into the foreign market.
Study Your Target Audience’s Needs
When you have a foreign market in mind and would like to expand your business there, the first thing you should worry about is whether there is a demand for your product.
Understanding the target buyer is crucial for running a business. But if you fail to recognise your target buyer’s needs when going international, it can lead to a negatively high cost outcome. Walmart, for example, entered Canada with high expectations but ended up closing all its 133 stores across the country.
So, when planning to go global, investigate the target audience’s:
Demographics (age, gender, language, location, job, marital status, income status, education)
Psychographics (goals, desires, values, lifestyle)
Also, perform a detailed analysis of the target market to identify the trends that influence consumer purchase patterns. All this information will help you understand the target buyer’s needs and whether your product can cater to them.
Understand the Target Market’s Culture and Language
The success of an overseas expansion also depends on how well you know the target market’s language and culture. In general, knowing a foreign language is a powerful asset for any business owner, as it helps you to build connections and bring new business opportunities on an international market.
Knowing the language also includes knowing the culture of the people who speak this language. For example, when learning Italian, one does not just learn grammar and vocabulary. One also discovers the country’s customs and traditions, which can in turn help with understanding your target buyer better and enable you to tailor your product to their needs.
Speaking the language of your target audience from abroad also plays an important role in building a rapport. When entering a foreign market, you will have to deal with local competitors, and your target buyers will choose them if you fail to understand their needs.
So, before setting off to discover opportunities to expand your business abroad, make sure you know the culture and the language of your chosen country. After all, if you plan to stay and grow your business there, you will need to find the necessary connections right away.
Optimise Your Marketing Strategy
A proper marketing strategy is a must if you want to impress target buyers and make them excited about your product, and a solid marketing strategy for global expansion requires thorough preparation.
Before going global, you will have to get a few marketing strategies in place, such as localising your website, doing search engine optimisation (SEO), researching the target audience’s communication and content preferences, and developing a social media strategy to match the target buyer’s interests.
All these steps require several months or even a year of preparation before you can take your marketing strategy to the foreign market. It is also crucial to A/B test all your marketing efforts to see how your target buyers will respond to them.
Going global is an exciting event, but it is a very complex process that will take you a while to complete. If you are planning to conquer a foreign market, take your time to analyse it and evaluate your risks.
All of the above strategies will take some time to execute: months to study the target audience’s needs, learn to understand their culture, and adjust your marketing strategy to make sure you are the right fit for the foreign market.
Here, patience is the biggest virtue. Plan, test, and learn from the mistakes and examples of others, and there will be a higher chance of success in the global arena.