Best Approach for Managing Global Expansion
If your business has grown to the stage where you’re considering expansion, then that’s a great sign of success. After all, businesses that grow and expand their operations tend to be amongst those that give themselves the best chance of long-term, sustainable success. When your growth plans include entry into a new and foreign market, however, you need to be sure that you have the right strategy in place to succeed. We list the top three approaches for managing global expansion that will facilitate entry and ensure your success.
The importance of business expansion is clear; companies that don’t grow will stagnate. And stagnation is a direct path to failure. To put it simply, growth can provide your company with new revenue, new opportunities for innovation and increased market share. Together, these benefits can help ensure that your company can meet any challenge, survive any difficulty and reach your business goals. International growth can be one of the most productive ways to enjoy those benefits but managing global expansion is not easy and comes with its own set of challenges. Expanding into a foreign market can pose unique difficulties for your enterprise. There are many factors to consider; differences in language, culture, market interest and logistical infrastructure must all be addressed effectively if you want to maximise your odds of success.
Managing Global Expansion
There are a few different ways to enter a new market, but for most companies, global expansion can be best managed by one of the following three. The first involves the hiring of a business development manager. The second is to keep everything in-house by setting up another office in your new location and hiring the personnel you need to manage the expansion. And finally, you can opt to hire an external firm to manage your sales and marketing activities in the new market.
Hire a Business Development Manager
One option that many small businesses choose involves hiring a local business development manager – someone who lives and works in the target market. The idea is that this manager will be well-versed in the culture and the needs of that marketplace, and thus can provide the guidance your company needs to establish itself smoothly in that market. Hiring a single individual to lead your expansion has the advantage of offering cost savings and can be beneficial in helping your company establish a quick foothold in the new market.
One of the disadvantages of this approach, however, is that by hiring local talent, there are transparency and communications problems to overcome. First of all, you are unable to witness first-hand how they are performing and no matter how communicative the relationship, there will always be a lack of transparency. Additionally, a third party always presents unique challenges when it comes to alignment of vision and mutual goals. The manager you hire will have a different priority than yours since they cannot help but be motivated by self-preservation and survival. By working single-handedly, if success is achieved, it is likely to be a gradual progression rather than an instant hit. Ultimately, there is no guarantee that short-term success will translate into long-term sustainability, due to those divergent focuses.
Some entrepreneurs are understandably reluctant to hand over serious responsibilities to people and entities that they cannot directly supervise. For those business owners, there is a second option: simply expand your in-house capabilities and manage the entire expansion on your own. By managing the move yourself, you can more effectively control every aspect of the expansion without worrying about misaligned goals. You can have full visibility and greater influence over any decision-making, training and management of your strategy.
Unfortunately, this option often involves more than most companies can even begin to imagine. Many attempts at in-house management of global expansion efforts fail due to an inability to understand and address cultural differences. Others fail due to excessive strain and stress on the company’s critical infrastructure and resources. It can be a long and costly process as you need to find a location for your new office, recruit and train new members of staff as well as purchase all the necessary equipment. For most of these companies, the internal changes necessary are simply too disruptive. Teams can lose sight of their mission which can lead to a whole host of problems at every level of the organisation.
Hire a Third-Party Agency
The third option involves hiring a firm to handle all your sales and marketing activities and carry out the initial stages of your expansion. A local agency whose expertise lies in helping companies scale can provide invaluable assistance in every critical aspect of your growth strategy. For example, they understand the market, its people and their needs. With the right information from you, the agency can help you identify the best way to present your company, highlighting your strengths and putting the right spin on areas where cultural differences might otherwise seem disadvantageous.
This can be a great way to quickly gain market presence which can be critical in ensuring that your expansion efforts yield the right results. Your time to market is reduced significantly as you don’t need to spend time sourcing an office space, a new team or a list of prospects. The right agency will have a solid network to facilitate your expansion needs. While a business development manager or your in-house team could build the network you need, that could take months to accomplish. A firm that specialises in sales and marketing will be ready to get your expansion up and running with far fewer delays and complications.
Ultimately, different companies have different needs when it comes to global expansion management. For some companies, a business development manager can be an effective way to accomplish short-term goals in a new market. For others, particularly companies that have the necessary resources, the development of in-house capabilities is all that is needed to accomplish their expansion goals. However, partnering up with a third-party agency is the one option that any company can effectively rely upon to facilitate a smooth and seamless expansion into a new and foreign market. Not only do they know how to communicate your message to potential new customers, but you can count on achieving the success you seek faster and more cost-effectively.