Global expansion. It holds so much promise but also so much risk. Look at Walmart. In the mid-90s, the discount store chain tried to break into Europe with its first stop in Germany. A decade later, the giant waved its white flag as it emptied store shelves. What happened?
Simply put, they didn't do their homework.
Walmart moved abroad without really changing a thing--while ignoring cultural differences and nuances. It kept its name brands, its greeters, and its American management.
Discounters in the German market abound and Germans didn't want a "greeter" welcoming them and asking if they needed help. And they didn't want to work for managers that didn't know how to delegate and lead the way they're accustomed to.
Walmart ended up losing millions.
But others have learned from their mistakes and you can too--opening up a world full of opportunity and profit.
Here are the three moves business leaders make to take a company global--and make millions.
1. Expand to new markets.
You can't go global without expanding to new markets. The key word here is new. Remember that your potential customers are not the same as the ones you're currently serving. They'll have different habits, preferences, and needs.
Do market research before moving. Speak with customers, marketing partners or distributors and evaluate competitive products.
Uber, for example, studies up on the people, cultures, law, and media before embarking into a new country. The successful ride-sharing app then segments users into groups, by age or city, customizes its products, and localizes its strategy. There have been a few hiccups but for the most part, Uber's on its way to successful globalization.
2. Recruit competent talent.
At a time when there's a war for good talent in the U.S., going global opens up a whole new pool. And the good news is, it's an educated, eager pool.
But recruiting globally requires a whole different strategy than in the U.S. It must be tailored to fit the labor laws, culture, and societal perspective of that country. For example, during an interview in the U.S., personal questions about religion or family life are off-limits but are almost expected in Latin America.
In Europe, they'll be more concerned with showing you certificates and degrees. In India, competition is so fierce, you may be confronted with a whole other set of challenges you didn't expect.
To find competent candidates for your business, tap into the resources of a search firm. If that's too pricey, try reaching out to local economic development agencies for information about the talent pool and recruitment strategies. Groups such as Society for Human Resource Management and The Conference Board have a solid international presence and may be a good resource.
3. Diversify your product.
In 2011, the U.S. car industry was still faltering. But not for Hyundai which posted an almost 25 percent increase in sales. How? The Korean company knows its customers. Cars like the Sonata had an attractive design, good driving dynamics, and the right price tag for Americans.
Diversifying your products can be a critical element of success when breaking into new territory. When you add new products, you can bring in a previously untapped customer base. And moving abroad widens the base you can tap into. Being present in the market is one thing--but offering something that is unique to their wants and needs helps build a long-term relationship.
It can also help build brand recognition. For example, Apple's products are highly regarded around the world now, offering sizes, colors, and functions that appeal to Asian, European, and American consumers.
Going global can be scary. Really scary. You can easily get in over your head (and bottom line), spread too thin, and outright rejected by your new market. But the more homework you do, the lower the risk. And, I can assure you the rate of return can be huge.