7 Factors to Consider When Expanding to Global Territories

Editor's Note: Take a look at our featured best practice, Growth Strategy (41-slide PowerPoint presentation). The reality is: all businesses face the challenge of achieving sustainable Growth. They need viable Growth Strategies. So, what is Growth Strategy? It is the organization's high-level Corporate Strategy Plan that outlines everything the organization needs to do to achieve its goals for [read more]

Also, if you are interested in becoming an expert on Strategy Development, take a look at Flevy's Strategy Development Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

Expanding your business globally provides a unique range of opportunities to reach a new audience. However, it also comes with a variety of challenges that can see even the most proactive business fall at the first hurdle. A robust plan is essential for expansion into global territories. Before you make your move, take a look at these seven things to consider in your expansion planning.

1. Market research

To make your business work in the market, you need to be sure that there is enough demand out there for your product or service. By conducting market research, you will have a firm grasp of the response to your offering before moving forward.

2. Respect differences in culture

Another critical factor is how your brand will be received in the new territory. It is vital to research how different cultures and societies perceive the brand and what it sells. Learn everything about tradition, public holidays, and religions to ensure you can succeed in the market.

3. Local resource and talent

If you are looking to expand to another country and have a base there, you will require employees. There will be a different pool of talent in the location compared to home resources. Plus, you may want to relocate people from your headquarters.

4. Business licenses and regulations

In some countries, a business license is a must. You will need to consider what you will need to set up successfully and run your business without interruption. You may also have to pay fees to get started. Each country that you choose to expand to will have its own requirements, so it is a good idea to thoroughly look into this beforehand. Fortunately, however, this is easy to do. There are companies out there that can provide a helping hand for setting up business in countries all over the world and offer plenty of advice and information about doing so successfully. This will make setting up company in Singapore much easier, for example. It covers a range of areas, such as registering your business with the ACRA and GST for tax.

5. Marketing

Marketing strategy is an important element in the success of your business in overseas markets. Miscommunication can be the downfall of an expansion, so it’s essential to get the right message across. For example, Chevy tried to sell the Nova model in Mexico. However, the translation in Spanish means ‘no go,’ which is not a positive name for a car, and it didn’t sell well. What works in one country may not in another, so considering a different approach in foreign territory is crucial.

6. Language barriers

One of the most significant barriers to expansion is language. To make the transition easier, hiring translation services is advisable. If you are also looking at creating marketing and branding solutions for this market, considering local companies is also a great idea. This way, they can advise on local reception and the right tone for your target audience.

7. Pricing and currency

In a new territory, you are selling in a different currency. Hence, it’s not only essential to understand conversion rates, but also pricing strategy. Local banking options may be a viable option, as converting money back into local currency will add extra costs to the transaction. It’s vital to incorporate this type of chargeback into your pricing approach.

Want to Achieve Excellence in Strategy Development?

Gain the knowledge and develop the expertise to become an expert in Strategy Development. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.

These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.