International expansion is a critical component of many companies’ overall growth strategy. Entering the international arena can help expand a company’s reach and also be a way to protect against the risk of decline in the domestic market. And although expanding globally can be exciting, it is essential that you first build a solid foundation for your business at home before making the leap overseas.
A successful international expansion is not a single-track movement from location A to location B. It requires careful planning and strategic action, as what works well in a stable and mature market economy.
Below are 5 key strategies tech companies should consider before scaling and aiming for cross-border expansion.
Understanding Compliance and Business Culture
To succeed overseas, avoid the pitfall of taking the same business model, which may have worked well in your own country, and simply applying it to international markets. Business laws and regulations vary from country to country and you will need to be flexible and adjust to the country’s environment and business culture. The regulatory mechanisms underline the technological maturity and openness of the market and are a reflection of the receptivity of a country to foreign investment in a particular segment.
Regulatory compliance poses particular challenges to tech companies with a global reach. Early identification of regulatory compliance, ethical and legal risk issues will provide a clear picture of the openness of the market and ease of doing business and can be decisive in determining whether the cost of market penetration is worth the potential benefits.
Prioritize Specific Countries
Each country has its own local laws, cultural norms, currency and unique business environment, so it is essential to specify which markets you want to focus and grow your business.
Break up geographic markets into individual countries with distinctive revenue and lead generation goals. Then research the local market to understand its size, challenges, competitors and where your product or service can fit in. Many companies that have achieved success in their domestic market usually overlook strong local competitors and fail to consider the basics of product positioning.
When assessing and prioritizing countries, look at external as well as internal data. Where in the world is there a need for your product/service? Are you seeing a surge in leads from a particular market, in spite of not investing there? Are you getting inquiries from a particular country that may indicate an untapped opportunity? Also consider how easy it will be for your company to do business in that market and how much success you have already had in that particular market. And don’t forget to assess how much you will need to invest to operate in that particular country.
Adapt Your Marketing Channels
Many companies believe they can enter a new market by playing the same playbook that brought them domestic success. While brand consistency is the ultimate goal, global companies may need to develop different marketing approaches to meet specific markets.
Although the “one size fits all” mindset can provide short-term benefits, it will certainly have negative long-term effects. As an international marketer, you need to conduct detailed market research to explore the channels that will deliver the best ROI in each market.
Rely on Local Expertise
Before journeying abroad, make sure you have access to local professionals who can assist you with their expertise on the local market and doing business there. Whenever possible, rely on local expertise and consider their input when making strategic decisions.
The biggest challenge companies face with incorporating local insight tends to be communication — as language barriers, time zone differences and the distance between executives and on-the-ground staff can cause important information to be lost. Therefore, it’s essential to establish a clear channel of communication between headquarters and local entities early on.
Focus on Internationalization
Some executives think that expanding their business overseas is as simple as translating their website to a foreign language. In their local market they try to make the content as engaging and compelling as possible in order to encourage customers to buy their products or services. But they fail to follow the same principle when expanding their business to other markets.
Instead of simply translating, think about localizing your website in order to optimize it to other locales and convey your company’s core promise and message into other languages and cultures. Are the images on your site culturally sensitive? Can your audience identify with them? Do they reflect your localized core messages? Has SEO been optimized to other countries? There’s no use in paying for a website to be built to target a certain country if it is not going to appear in their search engines.
In order to thrive internationally, though, a tech company needs to go beyond localizing the product and website to foreign markets. The key to international success lies in designing and developing a product and website in a way that removes barriers to localization or international deployment. And this is called internationalization.