Going International: What You Need to Know

February 2005 - BEK Best Practices Newsletter

Entering international markets is a logical growth step for many companies. Selling products beyond your borders, however, is not a trivial matter. Do you know if entering global markets makes sense for your company? Are you aware of the “gotcha’s” that can pop up? If you aren’t sure, don’t worry you aren’t alone. Here are a few questions to make sure you ask before entering an international market.

Critical Questions You Need to Ask and Answer

1. Have you researched your new target markets to make sure that the product is really needed? Does your business plan show revenue growth and is the ROI higher than taking your product into additional vertical markets domestically?
2. What is the competition like in your new target markets? If there isn’t any, do you know why? If there is competition, what is their market share? Competition outside of domestic markets can be vastly different. Make sure you understand the players and the leaders.
3. How will you distribute your product? What channels are available to you – direct, local distributors, stores, the Web, trading partners?
4. Are there any laws and regulations that determine how the product is built, sold, or used?
5. Will an American English version of the product work or do you need to have a completely localized version of the product? Can you get by with localizing a portion of your product? If you do need to localize, what languages do you need to start? What is the timeline for rolling out additional languages?

Getting the Answer

The quickest way to learn about your new target market(s) is to partner with a local distributor. A good distributor will be able to help you answer the questions above and will help you determine if there is a solid business opportunity. If there is a significant market the distributor can be your local operation for sales, marketing, installation, support and services. Additionally, depending on the distributor they may be able to assist with any localization that is required.

The advantage to using a local distributor is that they will help you learn about business, cultural and language issues that you may not be aware of and may not be equipped to handle on your own. It is not uncommon for companies to start their international operations using distributors and then add their own direct operations over time.

Don't Forget Internal Processes

Once you’ve decided that going global is right for your company be aware that the internal changes will be significant for your company. Here are a few challenging opportunities that will present themselves:

• Time differences – 5, 8,10 … hour differences make scheduling meetings difficult. There will be early morning and late night meetings in order to accommodate all geographies. This can be a benefit if you want to have 24/7 development, support, etc. When resources in one geography are going home for the day another set of resources are arriving at the office. This improves time to market in terms of solving customer issues and getting products developed and launched.
• Communications: face-to-face communications will be rare given the cost of international travel, so most of your communications will be done via e-mail and conference calls. This can be a challenge especially when you are dealing with controversial issues.
• Marketing, sales and support will need to be visited to determine what services are needed and how they can be provided.
• Multiple product versions – For hardware products, in order to comply with laws and regulations it may be necessary to have international versions of certain components of your product. If you have a software product, it is recommended that you internationalize your product so that it can support multiple languages (this way you only have to maintain one version of your code base).
• Cultural differences: language differences and business styles (not to mention lifestyles) may take some getting used to when dealing with other countries. So be patient and be open to new ways of doing business.

Going international is a great way to grow your company! Just make sure that you do the appropriate due diligence before entering new markets. We’d love to hear about your experiences expanding into international markets. You can email these and other comments to .

Next month's topic: Professional Services: Being Careful of What You Ask For ? by Jim Kissane of RSViP Inc.

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