International Growth Is Often Seen As A Benchmark Of Success For Businesses.
Global operations, in the minds of both customers and the public at large, can give a company an air of accomplishment, of prominence, of legitimacy.
For many organisations, though, the reality of going global is often far from the business bonanza that people might imagine.
According to the Harvard Business Review, few companies actually succeed at going global. Having reviewed 20,000 companies from 30 countries, the study found that companies operating abroad had an average return on assets of – 1%, for as long as five years after the move.
Most companies surveyed within the report found that it took almost a decade of international trading to reach +1%—and only 40% of companies turn more than +3% in that time.
While this data highlights the long, hard slog that many companies must endure to successfully expand into new territories, going global is not impossible, and the return on taking such a risk can pay off enormously if a strong growth strategy is implemented.
New figures from HMRC shows that goods exports have risen across the UK throughout 2018, bringing £244.8bn worth of new opportunities into the market. These figures came hot on the heels of the launch of the Government’s Export Strategy, which set an ambitious target to increase exports as proportion of UK GDP to 35%.
So, how can businesses ensure the success of their expansion plan? For some companies, growth equals success, no matter what the cost. If you’re not one of those businesses, how do you drive expansion into new geographical markets without making concessions on your vision? They say that if you want to make an omelet you have to break some eggs, but does launching a bid for international growth always mean compromise? It doesn’t have to.
Growth without compromise
Of course, compromise isn’t necessarily a bad thing. There will always be give and take when it comes to growth; it’s a natural by-product of the diversity of global markets. The key is to work out what is at the core of your business; what is it about your business that makes you unique, and makes you successful?
Whether this is the quality of your product, your company culture, or your values, identify this secret sauce and build a wall around it. No matter what happens, no matter what give-and-take you need to engage in in order to operate efficiently in a new region, everything inside that fortress should remain untouchable.
Growth should always be about creating value, not just for your bottom line, but for your brand, our employees, and your culture. You’re never going to drive value by diluting whatever it is that’s at the heart of your company; grow by increasing what you have, not spreading it thin.
Safeguarding that core appeal needs to come first at all times. But when you’re looking to push your business further, though, that can be challenging. The best way to avoid compromise is prevention; making sure you’re not going to put your business into situations where it may have to compromise on the quality of its product, its values, or its integrity in the first place. There are no crystal balls when it comes to business, but stringent and comprehensive research ahead of an expansion initiative can make all the difference.
Identifying new markets
The first step in your no-compromise expansion plan should be identifying your new market. Doing some market research and finding out where in the world your industry is growing. Even better, going that one step further and trying to estimate where it may take off in the near future can really pay off.
Leading the charge in a new market is always more risky than expanding into a region that’s already proven to be viable, but the rewards can be huge if done right. Plus, if you’re at the forefront of developing an industry niche in a new location, rather than trying to bargain your way into an established market, you’re more likely to be able to do things your own way.
Don’t try and shove a square peg into a round hole, and never compromise your product to appeal to a market you’re just not suited to. Not only can this cause your international expansion to falter, it can also have negative ramifications on trade on your home turf.
Investing in staff teams
It’s always challenging to break a new path, and building a base somewhere like North America or Europe especially, with their complex mesh of individual markets, is a massive undertaking. However, you can work to overcome these obstacles by bringing people on board who have a lot of knowledge of your chosen market, and a real in-depth appreciation of how business is done there.
A great team is the backbone of any successful business, and having the right people in your corner becomes doubly important during expansion. Employees hired to help your business grow have a heavy load to bear; not only do they need to live up to the standards that’ve helped your business succeed so far, they’ll also need to be able to shoulder the business through the busy and often stressful growth period.
When creating your expansion team, try to mix these experienced, fresh-faced hires with the best of your existing team; people who know your business, and most importantly, your values. These are the people who will safeguard your mission, and ensure that your business sticks to its guns wherever you are in the world.
If you’ve spotted a great opportunity to grow, or have set your expansion an ambitious timeline for your ribbon-cutting, make sure that achieving your time-to-hire goals don’t coming at the expense of quality acquisitions.
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