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Posted by on Feb 16, 2017 in Business Strategy, International Business, International Market Entry | 0 comments

“Going Global”​: 3 Traps for New Players

“Going Global”​: 3 Traps for New Players

Planning to expand a business overseas is an exhilarating prospect, but the road to success is littered with failures. While it's easy to imagine your company with offices around the globe, leading the world in your particular sector, the reality is far more gruelling. All the more so for small businesses, which typically have little experience in operating outside the domestic market and few resources to spend on an international market entry strategy.

I want to highlight three of the biggest traps for businesses which are trying to expand their footprint beyond the home market for the first time. I see people falling into these frequently and I'm continuously surprised at how the simplest mistakes can have an extremely negative impact on an international expansion project. So here goes.

Not Knowing What You Don't Know

It seems almost trite to spell it out, but when you expand into a new geographic market there will a lot to learn and many variables that you won't be aware of when you start out. The trap here is proceeding blindly, making assumptions rather than doing research to find out what the market reality in the new target market is. Taking this approach almost inevitably results in failure, or at the very least, wasted time and resources, as your new target market is almost guaranteed to be more different from the domestic market than you would have predicted, even if it's a market that is similar to your home market.

Accidentally Over-extending Yourself

Launching a company overseas is very similar to starting your business from scratch, but with a whole lot more complexity attached. Before setting out, it's imperative to know whether you are resourced - both financially and in terms of your team's capabilities - to move forward. Not doing so leaves both the new international business and the core business at home exposed to a very significant level of risk. If something goes wrong overseas, you may find that all your attention and a good part of your finance is diverted to propping up the international business, and this can have very negative flow-on effects for the original business.

That said, it's staggering how many teams skip the exercise of sitting down and calculating the potential direct and indirect costs of opening up abroad and working out a contingency plan in case things with the international business don't go according to plan. These are the companies that are at greatest risk of over-extending themselves.


Last, but certainly not least, is the trap of rushing. Because the idea of world domination is so appealing and so different to the humdrum of running a well-established business, a fair number of business owners succumb to the temptation to rush into setting up abroad. This can also be fatal, strategically and tactically. Strategically, because the company sets out without a picture of what success looks like and a roadmap for getting there, and tactically because the company embarks unprepared for the contingencies - commercial, regulatory and cultural - that inevitably arise.

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About Cynthia Dearin

Cynthia Dearin is an international business expert, business author and keynote speaker on the topic of leadership. She owns Dearin & Associates, an international business consulting firm specialising in fast-growing emerging markets, which provides companies with the commercial intelligence and strategies, cultural skills and trusted contacts that they need to succeed in new countries.

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