Whether you work for a large company or a small startup, chances are your business is global in nature. And if it's not there yet, I would expect that it's part of your organization's long-term strategy. The real question for companies today is not if they should expand - but when and where to expand. Building a global business brings tremendous benefits to your organization, but only if the expansion is done in a thoughtful way.
The Internet has transformed markets around the world and made it easy for businesses to extend their reach into other countries and regions. With more than 95 percent of the world's consumers living outside of the U.S., international expansion gives businesses a broader customer base and the opportunity to grow sales. What's more, operating a global business can lower costs overall by embracing less expensive suppliers and opening your business up to a diverse pool of skilled talent.
Industry analyst firm IDC predicts worldwide IT spending growth of 4.9% this year, with total spending reaching $2.06 trillion. Emerging markets, such as India and Brazil, are the engines of growth for IT spending globally.[i] IDC research also shows that emerging markets are leading the way in software revenue growth, growing twice as fast as mature markets in 2012.[ii] With a fourth consecutive year of solid growth, the emerging markets of Central and Eastern Europe, Middle East, Africa (CEMA), Latin America and Asia/Pacific (excluding Japan, Australia and New Zealand) had year-over-year growth of 7.2% in 2012 and led the way for the global software market. Having a global customer base and business can help organizations weather the ups and downs of the global economy.
Over the course of my career, I've had the opportunity to work at IBM with an established global presence, grow Symantec's global footprint and now as CEO of Virtual Instruments, I have the chance to expand the presence of company into the APAC region. Along the way, I've learned a few things about what can make or break a move into a new market.
1. Focus on the Customer: Customers aren't one size fits all. They have different needs and the way in which you build your products and services to address those needs is important. As you move into new markets, spend time getting to know your prospective customers. Understand the environment they do business in, understand their challenges and learn what they value the most. My mom used to tell me you have two ears and one mouth, use them proportionately. I think this is perfect advice when it comes to focusing on customers.
2. Have the right team and network in place: Every global expansion plan should start with an idea of the network of people you'd like to build. Whether it's selecting the management team to lead the expansion or picking partners to work with, people are key to opening doors in every new market. The right people can become the "professors" on the culture and business processes of the market. Industry trade associations in the U.S. can be a simple way to get started and can offer advice on building your network.
3. Understand Cultural Nuances: Understanding the local culture, language and ethical standards is key to better serving the market. Take the time to participate in local customs as it is an important element in building relationships. While CEO at Symantec, I took a trip to Chengdu, China where the ceremonial aspects of an afternoon tea ritual helped me learn more about the local culture. Learning the local language can also be an important part of learning the culture. Take the time to learn a few key words of the language of your key partners or customers. It will go a long way and show your commitment to them.
4. Act Local: While your business may be global, your programs need to be local. Marketing campaigns that work in the U.S. may not work in another region. What makes sense in English may not translate well into Japanese. Rely on your local teams to help you understand what will and won't work in each market.
Competing in the global marketplace requires a mastery of the subtleties of culture, custom and language. Investing in the areas in addition to the business itself will foster a relationship of trust with your customers, partners and employees. It's ultimately this trust that will help your business thrive around the world.
[i] IDC, Worldwide Black Book, Doc. # 241057, May 2013
[ii] IDC, Worldwide Semiannual Software Tracker, May 2013