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“Know Before You Go”​ – 7 Reasons to Start Your International Expansion with Market Research

Posted by on May 24, 2017 in Business, Export, Home, International Business, International Market Entry, Trade | 0 comments

“Know Before You Go”​ – 7 Reasons to Start Your International Expansion with Market Research

When you’re getting ready to expand your business overseas, it can be really tempting to skip the market research and just get down to it. I get it. Spending hours trawling websites for statistics, or reading reports during your weekend is a little lacking in glamour. Even investing time in travelling to a new country just to check it out might seem like a whole of effort for little return. Frankly, it’s more exciting to jump in and start selling than to do all that work. But the investment into market research before you start selling internationally is worth it. I’ll even go out on a limb here and say that it will reward you ten fold. Here are 7 reasons to support that claim.   Research helps you narrow down your focus to certain areas Executives and business owners often think about overseas markets in vague regional terms (e.g., “We’re shifting our focus to Asia,” or “We’d like to double our growth in Europe”), but this oversimplification is problematic. Ask people what they mean by “Europe” and you’ll get widely varying answers—Western Europe, the European Union, the euro zone, and so on. Starting your research on the places you could go will help you focus on where you should go. You’ll get a good feeling for the market before you start selling there It seems trite to say it, but if you don’t research countries before you start selling to them or working in them, you really won’t have a clear idea of what you’re getting into. Research (qualitative, quantitative and in-person) helps you to understand the dynamics of the market, and assess its size and potential for growth. You’ll be sure that your product will fit … and that the customers are willing to pay Companies that have a product or service that sells well at home often assume that the appeal in international markets will be just as great and that this “under-served” market will be a bonanza, requiring only a small investment in sales and marketing. The painful lesson that many companies learn at great cost is that their product or service doesn’t fit the market, or even more commonly, that the pricing is way out of line with what clients are willing to pay. Adequate, objective market research can help avoid these pitfalls. Identifies the competition If you start selling without market research you won’t know what kind of competition you’re up against and whether you can compete with them. It’s important that you identify competitors in market including local producers or services providers, as well as major international competitors. Once you’ve done that, you can work on understanding your competitors’ strategies … and how to beat them. Reveals hidden costs Failure to account for all the costs of operating in a new market can cripple an otherwise successful international expansion campaign. Local expenses may include higher taxes (such as VAT), company registration and set-up fees. For example, whereas setting up a company in Australia costs around US$385 (AUD 514), doing the same thing in Dubai could set you back anywhere between US$7,000 and US$16,000 (AED 25,000 – AED 60,000, depending on how you do it. Often, these unaccounted for expenses deplete the anticipated profit margins, based on domestic sales and marketing models. It...

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3 Great Ways to Take Your Company Overseas

Posted by on May 15, 2017 in Business, Export, Global Expansion, Home, International Affairs, International Business, International Market Entry | 0 comments

3 Great Ways to Take Your Company Overseas

If you’re part of a small or medium-sized company (SME) which is looking to grow, the thought of expanding your business overseas might excite you. Or terrify you. Or both. Either way, when you consider the time, resources and energy involved in launching a new venture in a new country, it can be a daunting prospect. Where to start? How to do it? Who to talk to? Do you have time to launch offshore and still maintain your core business? Alongside these questions, I also find our clients worry about the degree of difficulty and the cost of international expansion – both valid concerns, especially if you don’t have deep pockets. The good news is that globalisation, cheap(er) travel and technology have all made reaching clients, partners and staff in other countries easier than ever before. So while ‘going global’ is still a significant project for a small company, there are some “light-touch” methods that you can use to trial the concept without it costing you an arm and a leg or plunging you into complex commercial challenges. Here are my top three. Create a strategic alliance A strategic alliance is a relationship between two or more parties to pursue a set of agreed upon goals while remaining independent organizations. In other words, two companies can agree to do a project together for a period of time, without taking on the risk of merging their operations. The advantage is that each company gets to leverage the resources and expertise of the other, rather than having to bear the cost of acquiring those assets for themselves. For some examples of highly successful international strategic alliances, check out this article by Forbes magazine. I like strategic alliances a lot, because they allow you to test concepts in an international setting, without taking a lot of risk. The caveat here is that you must choose an alliance partner who you trust, like and can work with. Use a global digital channel In other words, sell online. This channel can be a great options for SMEs, in both the goods sector and in some parts of the services sector. Some of the benefits of using a global digital channel include: Lower startup and running costs Opening a physical store or office can be extremely expensive, especially in a new country. Not only do you pay for rent, utilities, merchandise, employees and marketing, you also have to shell out for the cost of setting up a company or branch office overseas. Selling digitally cuts most of these expenses out, and the money you save can be used to develop your website and product range further. Digital selling will also help you expand your product offering faster than is normally possible within an offline business situation. You can operate from anywhere and reach customers everywhere Selling online removes most of the geographical restrictions you face if you use a face-to-face or office-based business model. You can be anywhere around the world and still successfully oversee your digital business, which saves you a lot in travel expenses. You can also reach customers from just about anywhere in the world, without incurring the costs of setting up a physical presence in their country. Customers can now search for the product or service your business offers from anywhere...

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Want to sell overseas? More transparency please

Posted by on May 12, 2017 in Business Strategy, Export, Global Expansion, Home, International Business, International Market Entry, International Trade & Development | 0 comments

Want to sell overseas? More transparency please

Fancy a pint of Guinness to drink? The dark Irish beer is available across the world. So almost any country you travel to on business, you can find a bar selling a pint of the black stuff. This is because Guinness is no longer a family owned brand but part of the multinational Diageo drinks group. Diageo’s business practices and in particular its transfer of profits from UK sales to the Netherlands have come under scrutiny from the British tax authorities. The result is that the company may have to pay an additional £107 million in tax. Diageo is not the only seller of a dark drink to get into trouble for its tax affairs. The coffee giant, Starbucks, has also faced similar scrutiny and demands to pay more tax. The amount of tax a company pays is fast becoming a central ingredient in the mix of factors that make (and break) a company’s reputation. This is not just a issue that impacts large multi-national companies. Although, several other well known companies have faced the same scrutiny and pressure over their tax affairs including Google, Amazon and Apple (who were forced to pay U$13 billion by the Irish government in back taxes). The focus on the amount of tax a company pays started in a sector that produces another black liquid – the oil sector. The sector has been grappling with this issue for nearly two decades and is now subject to legal requirements to publish tax payments on country-by-country and project basis. Demands for transparency are spreading: to other sectors, to smaller companies, beyond tax information and to almost every corner of the globe. Whatever you sell and wherever you sell it, you are now more likely to encounter scrutiny over transfer pricing practices, your tax payments and also who really owns the company. SMEs are not immune from such scrutiny and they do not have to be drinks companies, high tech or in the energy sector. Small companies that sell goods and services to larger companies, to large projects or to the public sector may be asked to prove that they pay their fair share of taxes and do not engage in aggressive tax planning. Where a project is funded by a multi-national or bilateral aid agency such as the World Bank or the UK’s DFID, contractors and suppliers likely to be asked about their tax policy and to disclose the real (beneficial) owners of the company. There is an opportunity here. Smart companies can use greater transparency to reinforce their reputations. They can demonstrate they act ethically, are socially responsible and are making a tangible contribution to the communities in which they do business. Transparency is a crucial part of creating and maintaining a licence to operate in a market. So how can companies take advantage of the opportunity presented by increased demands for transparency? 1: Do not ignore the issue and hope it will go away. It will not. Demand for transparency is here to stay and grow. Companies need to engage with the issue. This requires leadership and devoting management effort, time and finance to engage and contribute in a meaningful way. This includes understanding the full implications for your business and your sector. Substantive and serious engagement will allow you to shape the...

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5 Tips for Managing Culturally Diverse Teams

Posted by on May 10, 2017 in Business, Cross-cultural Management | 0 comments

5 Tips for Managing Culturally Diverse Teams

Superior communication skills are essential company-wide. Continuous improvement and reflection build success: from daily interactions to international negotiations. Australia is in a unique position, attracting recruitment interest from around the globe due to its lifestyle, relatively stable economy and career opportunities. With a decrease in births and an increase in its aging population, Australia relies on migration to fill jobs and economic stability. This means that the landscape is changing for businesses small and large and those who adapt will set themselves up for a future that is ready to capitalise on the increasingly globalised workforce. More than 23% of Australia’s workforce is born overseas with 13% being born in non-English speaking countries and if we look more broadly again we see over 30% of the population either born or having a parent born overseas. Currently, however, Australia is not capitalising on its culturally diversity as much as it could, meaning employers are not taking full advantage of the breadth of direct and indirect skills available to them. This large proportion of the workforce not only have the technical skills for success, but also the unique exposure to cultures, languages and sections of society that allow access to new markets and ideas. Here are five ways to best benefits from this changing pool of talent. Capitalise on Culture Diversity Council Australia (DCA) published its paper ‘Capitalising on Culture: A Study of the Cultural Origins of ASX 200 Business Leaders’ in October 2013. Director Nareen Young says that “a culturally diverse and capable leadership team can provide enormous benefits for organisations, such as the benefit to boost local market share, enter international markets, create strategic alliances, maximise innovation and meet critical talent shortages.” TIP: Seek the advice of your staff members who have experience in specific cultural areas when it is relevant to your business development and client interactions. Identify Current Shortcomings A shortcut to embracing an effective and diverse team is to understand the mistakes of the past. The recent DCA paper shows that ‘culturally diverse’ people are underrepresented in directorial roles. Asian representation is particularly poor – especially considering the particular importance of Japan, South Korea and China as trading partners – with 1.9% of executives and 4.15% of directors having Asian cultural backgrounds versus 9.6% of the general community.   TIP: When recruiting and internally promoting staff, don’t overlook the unique contributions of culturally and linguistically diverse staff in the historical or potential growth of your business. Value the Hidden Skills of Multiple Language Users Those from non-English speaking backgrounds are often identified as lacking in communication skills. While local language skills might still need to be polished, there are also less-obvious benefits that are often overlooked. Psychologists say that speaking two or more languages improves cognitive process – more specifically, it heightens the ability for problem-solving, multi-tasking, focusing, decision-making and even having the likelihood for higher resilience. TIP: Firstly, continue to elevate the English skills of your overseas-born staff members – but, secondly, introduce a company-wide strategy for building more effective communication skills from socialising to negotiating – including native English speakers. Evaluate the Ability for Good Communication Good communication is a difficult goal to achieve between speakers of the same language let alone different languages. Good communicators go beyond simply having a good command of...

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Posted by on May 5, 2017 in Cross-cultural Management | 0 comments

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Attention Business Leaders, Global Expansion Starts With You

Posted by on Apr 3, 2017 in Business, Business Leaders, Business Strategy, Global Expansion, International Business, International Market Entry, International Trade & Development | 0 comments

Attention Business Leaders, Global Expansion Starts With You

  Assuming a leadership role is no piece of cake, as leaders hold a huge burden to drive a business to success. For business leaders with aspirations to “go global”, a key question is whether or not you have the right mindset to expand overseas. Your readiness and willingness to take the risk, to use your wings to fly beyond domestic borders, and to grasp the opportunities that are waiting for you will depend to a large extent on whether you have an international perspective or not. A study in the Harvard Business Review showed that businesses whose leaders lacked an international perspective were timid about moving into new markets. They were fearful of the unknown, and failed to prioritise global expansion because they weren’t convinced that diversifying geographically was one of the key factors to their company’s growth and development. Those who realised the importance of global expansion and pushed their fear to the side have aggressively lead their business upwards and snatched market share before anybody else could. As a result of this, 60% of Apple’s fourth quarter revenue was attained by international markets. Also, Uber’s business deal with Starwood Hotels helped them cement their presence in over 100 countries. To know whether you are on the right track to leading your business to international success, you’ll need to ask yourself a few questions: Have I chosen my international partners wisely? If yes, are they the right ones and are they really helping me expand internationally? Have I allocated a chunk of my budget to invest online and use e-commerce to introduce my products and services to the world? Have I analysed and compared the international and domestic sales and marketing data to understand the international picture? Have I allocated a percentage of the marketing budget to move to a new market? What is my view on international markets? Do I see it as an opportunity or a threat? Do I see it as a strategic advantage and can’t wait to explore it further or am I hesitant about it? Are global customers integral to my business growth? Have I taken the extra mile to use global marketing to attract customers from all around the world? Am I taking international strategy seriously? Am I changing my organisation’s culture to a “global first” one? Is my team displaying a globally-minded attitude? Are they taking the international audience into consideration while working? Answering “yes” to all the above means you are on right path to expanding your company globally. As a business leader, you need to recognise the importance of travelling to diversify your knowledge about how business is done in different contexts. You must have the curiosity to understand the lives of others and what they value. Sometimes, you’ll need to take into account other people’s beliefs, because you might be surprised how many business opportunities you may miss if you don’t. The world is full of new ideas and opportunities, and without the desire to be involved in evolving offshore markets, you’ll only leave a mark in your comfort zone and be left behind. Having a strategic, global perspective is crucial so that you understand how the business world works on a global scale. Finally, you need to excel in your negotiating skills when doing business across...

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Building your Cross-Cultural Competence: Why Upskilling Your Team is a Good Idea

Posted by on Mar 30, 2017 in Business, Cross-cultural Management | 0 comments

Building your Cross-Cultural Competence: Why Upskilling Your Team is a Good Idea

  Karen has proven herself as a successful project manager, eager to take initiative. Her fast-paced work style and quick decision making has earned her lots of buy-in from senior management, as she continuously shows result. But Karen is struggling with her newest project to roll-out a new product line to EMEA and APAC. Her team doesn’t seem to value her approach and constantly questions and (in her eyes) hinders the roll-out. Was it really such a good idea when her manager proposed to bring on team members with a diverse cultural background? The struggle Karen is going through is not unique to her situation. Multinational organizations are shaped and driven by their goal to operate successfully in a variety of markets and cater to a diversity of cultures. When the Institute for the Future (IFTF) of the University of Phoenix examined six disruptive shifts that will reshape our future work landscape, the researchers highlighted the demand for adaptability and diversity due to an increased global interconnectivity as one main driver of change (IFTF, 2011). It is therefore not surprising that cross-cultural competence was named one of the top 10 work skills of the future. Gallup found that we are more engaged at work, when we feel included, cared for and our ideas considered (Gallup, 2016). Lacking the understanding and appreciation of differences in values, behaviors and thinking styles will result in lower engagement between team members, lacking trust, and potential conflicts. The old saying “Treat others as you want to be treated” is no longer valid. In Karen’s example, her approach of moving fast and adjusting along the way made others feel overwhelmed and not able to provide the valuable input they had to give. The question we should ask ourselves: How can we navigate these multicultural situations personally? How can we as leaders ensure the success of our diverse teams? Spend more time building trust Whether you are a project team member or the leading manager, in order to build an inclusive team culture, we all need to patiently take a step back to ask questions and listen to the answers. Our communication and action is often built on assumptions and stereotypes. When working with a multicultural, diverse team  avoid falling into the trap of unquestioned assumptions and distancing team members. Trustworthiness is a good example: In very few culture, people assume that trust is a given (e.g. Sweden, Denmark, Norway) . They’ll worry about getting to know team members when the work has begun. In most regions of the world, however, you absolutely need to build the relationship to your team members before you can trust them (e.g. Brazil, Saudi Arabia). This may be one of the reasons why multicultural teams that exhibit high levels of social distance (i.e. you don’t know much about each other) are known to be less effective when interacting together (HBR, 2015). Overcommunicate In order to bring out the best in each team member and value their unique perspectives, it is helpful to visualise and discuss each colleague’s thinking and communication style. There are many tools available, and some organisations often already administer tests as part of their leadership development programs (e.g. MBTI, Insights, DISC).  Use the results to kick start a conversation about differences. While we do well in assuming...

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Can little Aussie food companies really take the world by storm?

Posted by on Mar 21, 2017 in Export | 0 comments

Can little Aussie food companies really take the world by storm?

There has been a lot of talk about Australia becoming the “food bowl” of Asia over the last few years and the trade statistics indicate that Australia’s trade with the rest of the world in food products continues to increase. Take for example, wine sales, which increased in value by 11% in 2016, reflecting increasing demand for premium Australian wines in most key markets around the world, particularly Northeast Asia and North America. But what does this mean for the small end of the market? Are there opportunities for micro-medium sized local companies that only sell domestically? And if there are, how do you access them? The great news is that if you’re an Australian food producer, the blue-sky opportunities are pretty much all overseas. Whereas the major supermarket chains will only ever pay producers the very lowest price that they can get away with, international markets are screaming for Australian food and willing to pay top dollar for it. Here are three quick case studies which demonstrate that. To find out whether your little Aussie food company has the potential to take the world by storm, join our webinar and hear Founder of SuperSprout, Melinda Richards talk about launching her food company on the global stage.   Sugar Free delivers a sweet surprise Melinda Mackay started Sugar Free Solutions in 2005 because she wanted to make sure her son, newly diagnosed with type 1 diabetes could have cake at his next birthday. “We found it very difficult to offer him the normal “treats”, since very limited sugar free products were available in Australia”, says Melinda. “This created a drive and passion to provide our son and other diabetics, as well as those who wish to eradicate sugar from their diets, a variety of quality sugar free baking mix products”. Melinda began experimenting with sugar-free cakes, and using a natural plant-based sweetener. When word of her creations began to spread, she realised the scope of the market for them. It was not long before she began exploring exporting her sugar-free mixes to countries with a high level of diabetes. Today, Sugar Free Solutions is exporting sugar-free cake and muffin mixes to the Middle East and Asia.   The humble hot chip goes to Pakistan In June 2006, Gary Katos, a chef, fast food business operator and consultant opened Cone Heads restaurant in Melbourne. His concept was simple – to offer healthier versions of classic take-away food, especially hot chips and gourmet burgers. Fast forward to 2014 when Katos franchised the concept and opened his first international store … in Lahore, Pakistan’s cultural and food capital. Not your usual first international market for a food business. Cone Heads Pakistan prides itself on being different to the big US fast food brands – a premium product that is suitable for all ages and easy to eat on the go. The company has built a strong business in Australia by perfecting its recipes and creating efficient store operations. It has taken this same approach in Pakistan. To establish its presence in Pakistan, Cone Heads made some cultural adjustments to its menu to suit the local palate, such as providing spicier sauces made from local ingredients, using more chicken than beef, and extending the range of burgers from the five it offers in...

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Attention SMEs: The “next big thing” for your company is probably overseas!

Posted by on Mar 1, 2017 in China, Indonesia, International Business, International Market Entry, Saudi Arabia, United Arab Emirates, United Kingdom, United States | 0 comments

Attention SMEs: The “next big thing” for your company is probably overseas!

As an SME leader, your top priority is to grow your company. You understand that building a pipeline of work, securing recurring revenue and scaling your business depends upon identifying opportunities and being prepared to capitalise on them. What you may not have realised is that the “next big thing” for your company that once in a lifetime opportunity, is probably waiting for you somewhere offshore. In fact, there has never been a better time for Australian SMEs to look abroad, particularly in the services sector. International travel is less expensive than ever before. Technology has made it possible to meet clients, employees and partners in the comfort of your own office and to sell goods and services overseas without ever leaving your own city. Record low interest rates are supporting economic activity and the low Australian dollar is making it easier than ever to export Australian goods and services. Australia’s trade agreements with the United States, Singapore, New Zealand, Thailand, China, Japan and South Korea are also reducing barriers to exports of goods and services. Nonetheless, less than 10% of Australian SMEs are exporting or operating offshore? What’s going on? Lack of awareness is one key problem and lack of expertise is another. Many companies are unaware of the size of the opportunities on offer and many others know that opportunities exist, but don’t know what they look like or how to capitalise on them. Dearin & Associates’ international networks and dealings in-market mean that we are plugged into broader demand trends as well as specific requests from stakeholders for Australian goods and services. We’ve also worked with and come across some of Australian business’ biggest international success stories. So we know that right now, in a number of the key markets that we work in, governments, industry players and consumers need what Australian companies (even micro-businesses) have to offer. If you’re looking for an overseas opportunity to seize, here are some markets hungry for your product, and some examples of how other Australian companies have successfully built their business through international expansion. United States – Something for everyone … especially in services Trump may be in the White House, but that doesn’t mean that America’s vast and vibrant economy has come to  a standstill. You could launch pretty much any kind of business in the US and have a reasonable chance of success, even if you’re small. Queensland jeweller, Margot McKinney is one great example of a small Australian business who has taken the States by storm. Operating from Fortitude Valley, Queensland, McKinney launched into the US market a decade ago, and her designs are now sold across the country and worn by Hollywood icons, including Dita von Teese. There is also almost limitless potential in the US services sector in areas as diverse as online marketing, pet care (Americans spend more than $40 billion each year on their pets), e-commerce, mobile and social gaming, restaurants, environmental consulting, aged care, transport and logistics and private security. United Kingdom – Technology, high value manufacturing and services Even though the UK market is mature in many respects, there are still a truckload of opportunities on offer and available niches to fill. The high-value manufacturing and technology sectors are both going strong, but you don’t have to be a tech...

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How to Build Trusting Relationships in Indonesia?

Posted by on Feb 17, 2017 in Business, Cross-cultural Management, Trade | 0 comments

How to Build Trusting Relationships in Indonesia?

The first encounter with your potential business partners in Indonesia has become a positive experience for you. The delegation team of your company has met the General Manager as well as the members of the Management Board. While having dinner together in an exclusive restaurant in Jakarta you introduced each other by talking about your work but also a lot about your private life. Now, your team would like to process the project and get down to business – the reason you came here. But please, hold on for a moment! The most common mistake business people from Western countries make in Indonesia is that they want to get down to business negotiations too quickly. In European countries or in Australia people usually do not spend much time in getting to know each other when establishing business with new partner companies. They come for presenting their products and talk about numbers and specifications. This is the way people from Western countries build up trust: They show their achievements and present the quality of their products. In Indonesia, however, people built up trust in a more emotional way. Before talking about business numbers they feel the need to get to know their potential partners closer and to build up a good and stabile relationship first. While sitting together during your welcome dinner you might have felt already that they show a high interest in your personal life. They asked you about your family and your hobbies and many more personal things. With that Indonesians are not just curious (like often considered by Westerners) but rather try to collect information about you that show how reliable and trustworthy you are. This happens also in view of future projects: In a country where written contracts are considered more a formality than an obligation they need to estimate your behaviour in case something goes wrong. Only if they rate somebody as trustworthy, Indonesians will pay efforts building up a business relationship and allow to move the negotiations onto the next level. Therefore be aware of the fact that your behaviour, your ability to respond to your guests and the image of your character play a significant role in your business negotiations. What type of personality is considered trustworthy? Across the archipelago, Indonesians are known to be quite relaxed people although in business. They are very friendly and courteous and usually smile a lot. With that they intend to create a comfortable atmosphere where everybody feels convenient. For foreign business people therefore it is advisable to be generally open and friendly. Again – giving insights into your life in Australia, your hobbies and your family contributes much to create a good image and to contribute to the positive atmosphere. As many foreign business people report, making business with Indonesians often feels like making business with friends. Not least, Indonesians see it that way. Despite their easygoingness, however, Indonesians are also very polite people. There is a popular saying that sometimes even is written at the doors of offices or restaurants, “Santai tapi sopan” meaning “Be relaxed but polite” which is quite self-explanatory. Not least because of that they also expect you to show a polite and respectful behaviour – no matter how stressful a situation might be. And since many things take their time...

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