By: Ryan Ayers
Globalization is great for business: it opens up new markets and allows businesses to bring in revenue and talent from all over the world. However, the first steps into international expansion can be fraught with growing pains, forcing companies to waste time and money on efforts that don’t gain any traction in foreign markets. To avoid this, company leaders have to get ready to embrace change and innovation outside their normal comfort zone. Here’s why it’s important to get comfortable with discomfort when you’re considering international expansion.
Failure is Part of the Process
The recent sale of British cereal company Weetabix from its Chinese owner to the American giant Post Holdings may be the company admitting defeat in the Chinese market, but it provides valuable lessons for businesses: failure is part of the process, and not all markets will measure up to expectations. The idea behind expanding into the Chinese market was solid: there are more middle-class Chinese people who are more apt to buy Western brands. Unfortunately for Weetabix in China, it wasn’t enough to change long-standing cultural preferences for savory breakfasts. You can plan and set goals based on a logical set of assumptions, but sometimes the reality plays out very differently—that’s just the nature of business. The good news? These failures can help inform future decision-making.
The Challenges of Different Tastes
Your comfort zone is shaped by your cultural identity, which is one of the reasons successfully breaking into foreign markets can be difficult. When Weetabix failed to catch on in China, it wasn’t that the company didn’t know what it was doing—its’s just that its core product wasn’t suited to the needs and tastes of the market’s culture. However, had the company thought more outside its comfort zone, it might have tried different tactics—suggesting savory or hot preparations, instead of the traditional Weetabix breakfast that had been so successful in Britain. Candy manufacturer Kit-Kat has done this in the past, offering different flavors like green tea in Asian markets. On the other hand, Weetabix’s sales in other countries, like Kenya and Mexico show that innovation takes many forms, and can be very successful—the company adapted the package sizes to account for different shopping habits, rather than different tastes, which has resulted in more success than in the Chinese market. Localization is key to long-term international success, especially if you’re manufacturing in the region, but this takes innovative thinking and strategic implementation.
Goals—and Flexibility are Important
Goals are an important part of any growth or expansion plan, but we occasionally tend to forget something: they’re supposed to be challenging. You don’t want to set impossible goals for yourself, but a goal should challenge you to think creatively, to force you to find the best approach to reaching those goals. Project managers have seen great success (up to 70%) in meeting goals by using SMART goal-setting, which encourages accountability and helps teams reach goals together. Setting goals in international expansion is key, because it allows you to make an educated guess about your brand’s performance abroad, then check your progress and performance over time, so you can make changes if needed.
Hone Your Focus
It’s exciting to begin the process of choosing and entering a new market, but it’s important to keep focus on just one thing at a time. You only get one chance to launch to a market and population, and first impressions hold a lot of power. Don’t dilute your efforts by trying to expand too quickly—innovation can only succeed if you have focus and strategy. By focusing on your goals and being willing to think outside your comfort zone, your chances of succeeding in your bid for international expansion will improve.
By Ryan Ayers
About the author
Ryan Ayers has consulted a number of companies within multiple industries including information technology and big data. After earning his MBA in 2010, Ayers also began working with start-up companies and aspiring entrepreneurs, with a keen focus on data collection and analysis.
Featured image via Shutterstock.