• Fri. Jul 19th, 2024

How to expand your business internationally

Bolt motorcycle taxi

Growing a business internationally might be challenging but can bring huge benefits. By taking your company into foreign markets, you can gain access to a much larger customer base. It also provides opportunities to hire from new talent pools and to grow your brand visibility. 

Businesses looking to move their operations abroad should be aware of cultural differences, however. The difference between a successful and unsuccessful international expansion ultimately hinges on due diligence. 

Here are some key considerations for companies before moving into a new country.

Invest in local research and expertise

According to Nataly Kelly, chief growth officer at software firm Rebrandly and author of Take Your Company Global, firms often don’t allow enough time for sufficient market research before they make their move. Companies, she advises, should invest energy and money into surveys and site visits well ahead of expanding to a new country.

You can’t simply copy-and-paste a playbook and hope for the best

Charlie Thompson, senior vice-president for Europe and the Middle East at Appian, an American AI-powered process platform, agrees. He adds that a balanced workforce comprising expat staff with an existing knowledge of a company and new hires from the country it is expanding to, is essential in delivering a product that can meet different needs and adapt to local consumer trends. “It’s important to really understand the local market and requirements and hire the right people,” he says. 

Indeed, consider the cautionary tale of Tesco’s failed expansion into China. The British retailer wrongly assumed that its Clubcard scheme would succeed in the Far East. But it soon discovered that Chinese consumers prefer to shop around and rejected the idea of buying all their items in one place.

Patrick Partridge, vice-president for rides at Bolt, says the company has a “policy of having at least one person on the ground before we launch in a new market” to protect against such oversights. “Local detailed knowledge is crucial in the transport industry and you only get it if you live and breathe it,” he explains. “You can’t simply copy-and-paste a playbook and hope for the best.” 

In Africa, he notes, Bolt offers “boda bodas [motorcycle taxis] as part of our ride-hailing offering, as we saw a gap between public transport and rush-hour traffic that could and should be filled.” 

McDonald’s also adapts its products or services to the country location by changing its menu to suit the market. In India, which has a Hindu-majority population, the American company does not serve beef products, owing to religious dietary requirements. Instead, it has a broader range of vegetarian, fish and chicken choices. In Japan, teriyaki sauce is used as a default condiment option alongside ketchup and mayonnaise. 

Be open to local partnerships

Shweta Jhajharia, the founder and chief executive of Growth Idea, a business consultancy, says that companies should be open to “knowledge and information-sharing with established local firms” when finding their feet in a new territory. Building a robust supply chain, with vendors already operating in the market, she adds, can make for a smoother transition.

Natasha Zone is the founder and chief executive of onezone, “a curated discovery app”, which puts together lists of the best bars and eateries in different cities around the world, including London, Lisbon and Berlin. Users of the app can filter the venues according to a range of ESG criteria, including their carbon footprint and the ethnic or gender make-up of their leadership teams.

As a service that is global by design, Zone explains, cultivating and maintaining strong partnerships in each of the cities where onezone operates is crucial to its success. “We spend a lot of time on the streets,” she says. “Our curators – which we send to the different locations for extended periods of time – get to know the lie of the land inside out, meeting and working with local restaurant owners, influencers, PR agencies and community members to ensure that our curation is both onezone-approved and locally approved. We create long-standing relationships with local communities and look to them for support as much as we set out to support them.”

Be aware of laws and regulations

When entering new foreign markets, Jhajharia says, companies should be mindful of unfamiliar legislation, “particularly regarding intellectual property, employment regulations, data protection and taxation”. Businesses should seek legal counsel well in advance of any move abroad, she notes.

But, sometimes, a country’s legislation can also provide an opportunity. Bolt’s move into Poland, Partridge says, saw a collaboration between the company and the local government to inform decisions about new electric vehicle charging points. “We talked to [the local governments in different Polish cities] about the deployment spots for electric scooters. The profits from these fees will be spent on the development of infrastructure for micro-mobility in the city. 

The more designated infrastructure there is, Partridge suggests, “the safer people will feel and this will lead to more uptake of alternatives to private cars.”

Adapt your brand to new surroundings

At a minimum, Kelly says, companies should do a “name-check” to find out if any of their brand names or products have negative connotations in a new market. If so, she says, it might “make more sense to enter the market through a local reseller” rather than trying to build a brand from scratch. 

Don’t just seek out the local nuances, embrace them

Many companies have successful slogans, but that may have slight tweaks in each market, Kelly points out. “Apple and Nike are excellent examples,” she says, “of companies that design campaigns with global consistency but allow for local adaptations. While the slogan might be the same globally, the influencers associated with local campaigns will be different with each market.” 

In 2014, for instance, Nike launched an India-specific campaign, Make Every Yard Count, which collated footage of 1,400 amateur cricketers. In Europe Nike might have used football but in India it focused on a sport that was more popular in south-east Asia. The Just Do It slogan was still used in the advert to convey a sentiment of innate possibility to an aspirant population of 1.4 billion people. 

“Don’t just seek out the local nuances, embrace them,” says Partridge. “If you do that, there are opportunities for all involved ⁠– cities, citizens and the business.”

If it’s possible, he adds, companies should “consider how you can bring value in a multitude of ways. Though we started out as a ride-hailing company, we’ve since expanded to a handful of services (micro-mobility food and grocery delivery, car-sharing) that mean moving people and products in a city is easier. After all, our mission is to make cities for people, not private cars.” 

Be sure to manage expectations

Partridge says that it is important for business leaders to manage their own and their shareholders’ expectations. International growth takes time and success is unlikely to happen overnight. Companies, therefore, should view these moves as long-term strategies.

“Humility is crucial,” Partridge stresses. “Just because something worked well in one market doesn’t mean it will work in another.”

Companies should come up with timeframes that factor in the challenge of entering a market that may already have several established players. Where international expansion might once have relied on a bricks-and-mortar presence, Kelly says, “now you can be technically global the moment you have a website.” As such, she recommends that companies do not rush their transitions and value incremental progress as progress, nonetheless.

“Companies need to think about providing a globally equitable experience to their customers and employees,” she says. “Local customer expectations and needs are different, so go-to-market approaches must reflect that reality.” And this, she notes, takes time.

Undoubtedly, venturing into foreign markets can be a daunting prospect but with thorough planning and some patience, companies can reap the benefits.

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