Guide to going global
Expanding overseas opens up valuable opportunities for Singapore businesses to diversify their risks, grow their demand and lower their costs. A survey on 700 local companies revealed that going global was the key engine of growth and transformation for Singapore companies. In 2017, over 50% of the companies in Singapore have presence in China and Malaysia, and there is increasing interests in markets such as Vietnam, Myanmar and India.
For Small and Medium Enterprises (SMEs), going global can be exciting but also daunting. Overseas expansion is a significant step that could potentially disrupt the current business activities. However, SMEs can reduce the risks and maximise their foray into new markets if they are adequately prepared. It is crucial for business owners to be fully aware of the impact of crossing borders and analyse if the business is prepared to undertake the expansion.
Follow these steps to get started:
Ask yourself: Is my business ready to go global? Before going down to the details of planning, it is vital to evaluate if your business is in a good position to expand overseas and the implications of doing so.
There are several assessment tools available online such as the globalEdge assessment tool which can help you determine your business’ readiness to expand its operations internationally and ascertain your ability to export products. It is only a clear move if both your “organisational readiness” and “product readiness” levels are satisfactory.
Another key consideration is get company-wide commitment. Every employee is a vital member that can make or break your international move. Having everyone’s buy-in will create a common goal to work towards and a consolidated effort as a team will contribute to the success of the expansion.
Knowing your market well enough is key to success abroad. Be sure to conduct in-depth foreign market research on multiple countries to identify potential markets. It’s important that you select a market which is not already saturated with multiple competitors offering similar products or services.
A success story is Singaporean traditional chinese medicine (TCM) company, Eu Yan Sang’s expansion into newer markets such as Australia and the US in the last 10 years. Given that the market for herbal supplements is quickly growing not just within the region but also in the West, the entry into these countries is a strategic move to tap into the infant markets aboard.
Also project the demand for your product or service offerings in these potential markets to ensure you’re entering the right territory. You should also consider localising your offerings to cater to the tastes and needs of the overseas customers.
One way to extract organic feedback from the ground is social listening, where digital conversations are monitored to discover what customers are saying about a brand, topic or industry online.
- Visit your target country. You never know till you’re actually there physically. Observe the cultural differences, competitors’ activities and consumer behaviour to better strategise a local approach to your expansion plan.
- Test the market. It is imperative to continuously adapt and make modifications to your offerings based on the new markets’ needs. Conduct market tests to gather customer feedback so as to identify areas of improvement.
Each market has its own nuances due to economic, cultural, governmental and market conditions. Although it is important to remain consistent with the overall business plan, you will need to localise your strategies in order to be a good match to the international market. Working with a team of local experts to craft the expansion plan can help you navigate your entry accurately.
Language and cultural differences have been proven to be major barriers to overseas expansion. In a survey, 64% executions from all over the world have commented that differences in language and culture made it difficult to gain a foothold in foreign markets. Customers are more likely to work with vendors when the products, proposals and ideas are presented in their native language. Hence, it is essential to pick up the local language. This also demonstrates your respect and dedication to the local landscape which will serve a great help in easing the transition.
The other challenge lies in striking the right balance between adopting the local business culture and maintaining the current. For example, in Japan and China, business etiquette is highly valued and some basic expectations include bowing during first contact to indicate respect and using both hands to receive and offer name cards. Timeliness is also a key aspect.
Marketing communication is another area critical to your business expansion plans. Instead of translations, opt for transcreation where the messaging is thoughtfully crafted based on original intention instead of direct translation without context. This will help you ensure that the key marketing messages capture your brand values and speak to the local market with relevancy.
One primary example is taglines and headlines of public communication materials. Pepsi once did a marketing campaign in Taiwan where the slogan ‘Come Alive with the Pepsi Generation’ was translated to ‘Pepsi will bring your ancestors back from the dead’.1 Mistakes such as this are costly not just in terms of affected sales, but also damaged reputation.
Gain a competitive advantage by building a strong supporting ecosystem of local partners and vendors. It has been reported that SMEs perform better when they partner with other counterparts.3 Outsourcing administrative and complex financial and legal functions to local service providers can ensure your business infrastructure is properly developed. Besides allowing you to focus on your main business functions, you can avoid oversights especially with regards to complying with government regulations. Be sure to foster these relationships towards a long-term plan to minimise risks of uncertainty.
Going international may be challenging but with proper planning, research and resources, the risks could be significantly minimised.
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