FIVE STEPS TOWARDS INTERNATIONAL SUCCESS By Nerella Campigotto www.boomerangconsulting.

com

For small and medium sized enterprises in the business or professional services industry, expanding to a foreign market can be a daunting proposition. Many such companies limit their growth by not taking the chance, while others proceed with insufficient preparation and then wonder why they didnt succeed. The following is a brief outline of the key steps that should be undertaken prior to launching into an international venture, and some of the issues to consider. [Click To Read/Close Article] Step 1: Market Overview Determine which country or countries have a viable market of sufficient size for your services. If more than one location is being considered, determine which location to target first. A wise service exporter will move on to other markets only after success has been achieved in the first location. Even if only one country is being considered as a potential market, it may be necessary to target a particular region to narrow down the focus of the market research. Instead of simply following the easiest and/or most popular export route, consideration should be given to less likely regions, as untapped opportunities may exist there. Avoid becoming an exporter by default. Many international expansion decisions are based on a contract landing in your lap. Just because one client from a particular country approached your company and has a need for your services, it does not mean that the entire market should necessarily be targeted without having undertaken any additional research and analysis. The client in question may not be representative of the target market, therefore due diligence is still warranted. Step 2: Market Analysis Ensure all aspects of the market are covered. These should include: the markets response to your service, competitive intelligence, the impact of foreign currency exchange rates on fees charged and costs incurred, and consultation with local professionals on local laws and regulations. Be prepared to adapt your services for the needs of the targeted market, as well as meet the increased demand that the new market will create. Prepare for cultural differences, both from the perspective of customer service and also employee and/or partner relations. Do not assume there are no cultural differences simply because English is spoken. Also keep in mind there may be regional sensitivities within the target market. It is important to visit the potential market and build relationships through face-to-face meetings, as well as to talk to other companies that have succeeded at exporting their business services to the area. Most importantly, be prepared for the financial and time commitment of the venture to be greater than anticipated. Step 3: Market Entry There are various options available when entering a new market as a business services provider, these include: opening a full branch office, opening a sales or representative office only, operating through an agent,

entering a partnering agreement with a complementary business, forming a joint venture, or acquiring a competitor. The advantages and disadvantages of each path should be analyzed. This would entail considering the need for positioning the business name or brand versus the cost efficiency of entry into the market through a partner or agent, market share versus profit goals, and the viability of entering the market in stages by working through an agent or sales office to test the market prior to opening a full branch office. Step 4: Marketing/Business Plans Form a market entry strategy based on the information obtained in the previous steps. A Business Plan or Strategic Intent should be prepared at the beginning of the new venture even if there is no necessity for financing. Prepare a detailed monthly marketing plan, especially if there is no local partner involved whose marketing strategy can encompass both parties. As a business services provider, which usually entails marketing intangibles, this will be vital to the success of the operation, and should focus on image building, and establishing credibility and relationships. Consider diversifying your services or service delivery to better meet the needs of the target market. Also take into account any cross-cultural issues, and translate and localize all marketing material including websites. To avoid making mistakes in this area, engage the services of a local PR firm, advertising agency or other required expertise. Step 5: Start-up of Operation If the Business Plan includes opening a branch office, ensure that all local laws and regulations are understood prior to setting up systems or hiring employees. Accountants and lawyers familiar with the local requirements should have been consulted during the market study stage, and should now be engaged to assist with start-up. Adapt any systems already in place to work cross-culturally. The challenge lies in succeeding with this adaptation without losing sight of your companys core values and culture. Analyze the advantages and disadvantages of transferring staff versus hiring local people for key positions. This can be crucial to the success of the venture and should be closely monitored. Ensure there is smooth communication between offices and with partners. To avoid the risk of miscommunication, translate all pertinent information into the local language even if English is understood by all parties. It is essential to make a long-term commitment to the new market. Always keep in mind that this new venture may require more perseverance than originally anticipated. But ultimately, the most important point to remember may be the old adage: "If you fail to plan, plan to fail." HOW SUCCESSFUL Most of us have at some point encountered challenges within our

MULTINATIONALS COMMUNICATE INTERCULTURALLY By Nerella Campigotto www.boomerangconsulting.com

organizations when it comes to communicating effectively, whether it be internally with our colleagues, or externally with our clients, partners and suppliers. Add to this the element of communicating between different cultures, and the issue becomes even more complex. [Click To Read/Close Article] Some multinationals struggle with these issues on a daily basis, but they learn to pay attention and make the effort to meet the various needs of the cultures in which they do business. Others choose to ignore these issues and impose their headquarters viewpoint, often unaware of the negative impact this may have on their bottom line. The topic of business communication can be broadly separated into two areas; external and internal communication. External communication covers areas such as an organizations marketing materials, negotiations with clients, partners and suppliers, and general public relations and business practices. Internal communication involves policies and procedures, management and training, human resources and legal requirements, newsletters and other employee communiqus. With external communication many organizations do more than just pay lip service, and do translate and localize their marketing efforts. It is still surprising, however, to find a number of multinationals that dont do so with their websites, a matter that seems particularly unacceptable in the ecommerce world. Ensuring that you communicate with your target audience in their own language seems self-evident. In addition, it is also important that the translation be undertaken by professionals, or your companys image may be seriously tarnished. It is also prudent to engage professionals in the area of public relations, who are familiar with the culture in which your organization is operating, as some matters need to be conveyed in a particularly sensitive manner. The subject of intercultural negotiations and transactions is quite complex and easily warrants a separate article. Here the medium of communication is of importance; certainly the Internet and email have facilitated the process somewhat, as these allow time for consideration. However, where negotiations take place face-to-face, the dynamics of the transaction need to be taken into account. Which culture is dominant? Where and in what language does the negotiation take place? Keep in mind that even if the other party is willing to use English, this is often a means by which the true intent can be obfuscated by a lack of clarity, hidden behind the excuse that English isnt their mother tongue. The reason intercultural negotiations can be difficult is because the motivation, as well as the perception of the process and its outcome, tends to be different. It is evident that an inability to reach consensus with prospective clients and partners affects your business bottom line. What may seem less evident is that negotiating isnt just an external matter, but also involves internal dealings with and among staff; ineffectual communication can be quite costly here as well. Multinationals must make staffing decisions that determine the corporate culture in their foreign branches; should managers be local or transferred from headquarters? There are arguments for both choices, as long as the decision is given clear consideration since the result, of course, affects internal negotiation and communication practices.

Internal communication procedures that involve local legal and human resources requirements are usually dealt with in a positive manner by multinationals (often because they do not have a choice); relevant materials are translated and local policies and laws adhered to. What about staff training? Often such procedures are simply imposed from headquarters in English, with no real appreciation for whether the message is clearly understood and, most importantly, followed. What about corporate relations efforts such as employee newsletters, Intranet content etc.? Some companies will spend small fortunes trying to communicate their brand and vision at headquarter level, and then completely disregard the effect in their foreign markets, thereby jeopardizing potential profits. To conclude, we can easily see that to operate successfully in a foreign market, companies need to consider many aspects of intercultural communication that may affect their revenues and profits. Ultimately, to achieve positive results it is important to demonstrate awareness of the other culture and empathy for the foreign market, without losing the uniqueness and message inherent in the companys culture.