International Market Entry Strategy
We help companies design and implement an international market entry strategy, so that they can scale internationally and amplify their impact in the world.
We help companies to scale internationally by supporting them in three key areas of their business:
10x Strategy
for many companies this is a robust international market entry strategy that is ten times better than their current best thinking
10x Momentum
in other words moving 10x faster into international markets than your current pace
10x Cashflow
cash in the bank is increasing by at least 10% year on year
To get those results, there are three big levers you can pull…
The first lever is Critical Thinking which includes:
- Developing an expanded vision - big picture thinking, rather than a “nickel and dime” picture of what you want to achieve.
- Pursuing deep insights - into the opportunities, threats, strengths, weaknesses and barriers to entry in the countries you’re hoping to enter. Understanding the size and dynamics of each market, who your ideal clients and competitors are and how to appeal and deal with them, appreciating the nuances of each culture and what that means for your team as you begin to work there.
- Getting a robust grip on reality - developing certainty that you can deliver on the vision you’ve developed and that your company is set up to do it.
To get those results, there are three big levers you can pull…
The first lever is Critical Thinking which includes:
- Developing an expanded vision - big picture thinking, rather than a “nickel and dime” picture of what you want to achieve.
- Pursuing deep insights - into the opportunities, threats, strengths, weaknesses and barriers to entry in the countries you’re hoping to enter. Understanding the size and dynamics of each market, who your ideal clients and competitors are and how to appeal and deal with them, appreciating the nuances of each culture and what that means for your team as you begin to work there.
- Getting a robust grip on reality - developing certainty that you can deliver on the vision you’ve developed and that your company is set up to do it.
The second lever is the ability to make Definite Decisions - high-quality choices which you make and adhere to. This is enhanced by:
- Having uncompromising objectives - clear, achievable goals that take you beyond your comfort zone. Without these, you won’t take the risks that you need to take to be internationally successful.
- Knowing your numbers - to make high-quality decisions you need to be across and in control of all the numbers in your business. This includes financial numbers and marketing data.
- Creating a powerful plan - a step-by-step plan which sets out who must do what, by when, to make your vision a reality.
And finally, to get things moving, you’ll need Extraordinary Execution - you must consistently carry out your strategy to a very high standard.
Extraordinary Execution becomes much easier when you have:
- Super systems - across all areas of the company, so that the founders can stop working 80 hours a week and start getting maximum leverage from their time.
- A top team - who are 100% on board with your ‘global vision’ for the company. Ideally, they’ll also have at least 90% of the skills needed to make the vision reality, and be willing to put in 120% effort to get results.
- Active accountability - external observers who give objective feedback, encouragement and counsel on your plans and on progress. We believe that to a large extent, environment dictates performance.
Executive Advisory Program
The Executive Advisory Program (EAP) is our flagship offering in the international market entry strategy space.
It is designed for companies turning over $2M+ and enables us to work with your team across a number of areas, to give you the tools to realise your global vision with minimum stress and maximum impact.
We start with a four-month engagement, as in our experience this is the minimum amount of time that you need to get results. Each month we meet twice to work on the areas that you have identified as priorities, including:
- an hands-on, ‘doing’ workshop, to give you the tools that you need to go global and,
- a 1:1 mastermind session to review your financial dashboard, problem solve, track progress and celebrate wins.
In between workshops, you can reach out to us for support,
whenever you need it.
Our Advisors
Meet our team of trusted international strategy experts
Our Clients
What our clients say
Table of Contents
As your business grows, you might be thinking about tapping into new regions or markets. While there’s a lot you can do remotely, you’re likely going to need a local team on the ground to realise your vision of building a global company.
Along with recruiting local team members and developing new ways of working, you’ll need to consider how you’re going to navigate employee expenses in these new countries, too. While your current expense policy might work in a domestic context, it’s likely going to need some tweaks and changes to work overseas.
From navigating different tax laws and accounting for the cost of living differences, your expense policy needs to evolve as your business expands internationally. Let’s explain how to take your expense policy global with five practical tips to get your growing business ready for overseas expansion.
Why expense policies matter for internationalising, high-growth businesses
Once you’ve successfully proved your product-market-fit in one country, you might be thinking about expanding abroad. In today’s digital-first world, testing your product overseas can happen faster and more effectively than ever before.
While your first priorities are likely to be testing your product with this new audience and growing a global team, your focus should also be on creating a global expense policy. Why? Well, having a clear set of guidelines for how company profits can be used by your team is essential to keeping your business profitable while scaling overseas.
The more people you bring into your business, the more complex managing your cash flow can become. Without the right framework in place, your finance team may struggle to keep up with the growing workload of reconciling transactions, approving expense reports and chasing lost receipts.
But, reviewing your expense policy (or building one from scratch) and ensuring it works both locally and abroad can help you reduce the risks of expense fraud and free up resources in your team, too.
Here is why you need to get an expense policy sorted as your business goes global:
- You’ll be able to proactively plan for the unique laws and regulations that apply in each country to ensure your company and expense policy remains compliant.
- You’ll be able to tailor your expense policy to each market and geographical area, rather than have one standardised policy that won’t work as you scale internationally.
- You’ll maintain full visibility over your expenses even as your team grows and your business moves into new countries.
5 things to consider when building an expense policy for a global team
Clearly document your region-specific expense policies
While some elements of your expense policy may be standardised across your entire company, you’ll need to allow for geographically specific rules and requirements, too.
What tax rules apply in each country you’re operating in? What information do you need to capture to reconcile transactions? Are allowable and non-allowable expense categories the same across each region?
By ensuring your expense policy is tailored to the local laws in each country you’re planning to operate in, you can save your business the hassle and headache of non-compliant expense claims.
Ensure your policy is aligned with local cost of living
The best expense policies balance the needs of employees with clear budget categories. However, the budgets you set for different expense categories might vary greatly depending on the cost of living in each region.
Make sure to review how much things actually cost in each region when setting your budgets. Be realistic about how much expenses will cost your team and continually review these costs as time goes on (especially in light of the inflationary pressures we’re seeing across the globe).
The more realistic and accurate your budgets are, the happier and more supported your team will feel (no matter where they’re working from).
Watch out for FX fees
If all of your working capital is based in one country, you need to watch out for foreign exchange fees when expanding globally. Plus, as international currencies continue to fluctuate, you might be hit with unexpected conversion costs as prices go up and down.
FX fees and costs can easily eat into your profits, especially as you add new regions into your business. Instead, it’s worth looking for an expense management product that offers corporate charge cards that offer no FX fees.
Look for solutions that offer globally-compatible cards
In a similar vein, it’s important to ensure you can use one consistent payment method for all employee expenses globally. You don’t want employees in one country using company AMEX cards and other employees using their personal funds for company transactions.
By looking for a globally-compatible corporate card, you can make your finance team’s job easier with one single method for processing expenses. Plus, by giving your team corporate cards you can score instant visibility over your expenses and ditch the need to reimburse your team or use your employees as a line of credit.
Find ways to unlock working capital in all markets
When going global, you want to give your team access to the capital they need to jump on the best opportunities. That’s why your expense policy needs to factor in a line of credit for team members, no matter where they are based.
The best expense management platforms should offer corporate cards that offer no fees and can help you continue to thrive (not just survive) even when cash flow is uncertain. This will ensure you’re not taking out loans in each new region and keep your lines of credit consolidated.
When it comes to going global, your expense policy needs to be a top priority for your scaling team. With the right policies in place, you can ensure your processes are compliant and adaptable to a range of local contexts. Plus, you’ll be able to retain visibility over all your expenses even as your business expands into new markets with the right policies in place.
Written by Team Cape
If you’re thinking about expanding your fashion label internationally, 2021 might just be the year to do it.
Despite the havoc wreaked by COVID19, e-commerce sales boomed over the last 18 months… which means that there’s never been a better time for style mavens to buy your brand, even if they’re a continent or two away from your physical storefront.
But before you embark on your international adventure, here are three things you need to do…
Identify your Ideal International Client
Before you do anything, you need to get crystal clear on who your Ideal International Client is – that person who loves your clothes and wants to wear them every season.
Too many fashion brands – including some that have been selling internationally for a while – don’t don’t really know who their ideal international client is, or what s/he wants. They either take a ‘one size fits all’ approach and hope for the best, and/or they assume that international clients will want the same thing as clients at home. These companies usually struggle to get traction in the international space.
There are two problems here. Firstly, you can’t hit a target you haven’t identified. Secondly, the global fashion marketplace is super competitive. Our Facebook and Instagram feeds are swamped with ads for the latest, greatest trends from around the world. It’s hard to get cut-through in a sea of messaging and promises.
The secret to standing out isn’t just bolder fonts, brighter colours and more ad spend (although great marketing definitely matters), it’s about knowing exactly who your ideal clients are and focussing all your love, attention and messaging on that select group of people.
I’d go as far as saying that knowing who your Ideal International Client is and what they value should drive every facet of your international business, from the styles you create, to the text and images you use on your website and what you post on social media, it all needs to be directly targeted to a specific set of values and desires.
Don’t forget fashion seasons
Although there are those who argue that we’re seeing the end of seasonality in fashion, fashions seasons are still a thing and they can have a big impact on your ability to supply customers overseas, especially if you’re selling wholesale or retail, rather than online.
Different countries have different approaches to fashion seasons and you’ll need to consider which season will be most suitable for your business.
You also need to work out whether your production schedule matches the seasons of your target market and whether your business can meet these deadlines. For example, the US has earlier season launch dates than Europe. If you’re manufacturing garments in Australia, Vietnam or Indonesia, can they be ready in time for the start of the season in the States? Or only for Europe?
Make sure your marketing is magical
Every fashion brand needs a good marketing strategy in place to help it stay ahead of its competition… especially the international competition. When you’re starting out, it’s likely that you’ll test international markets by seeing how your product fares on international e-commerce channels, so I’ll focus on digital marketing here.
While you probably already have a website and use social media to target customers in your home market, here are a few things you can do to up your game in the international space.
Create a Lookalike Audience. Once you’re crystal clear on who your Ideal International Client is, you can target more of the same people on platforms including Facebook, Instagram and TikTok. A Lookalike Audience is a way to reach new people who are likely to be interested in your business because they’re similar to your best existing customers.
Connect With Influencers. Working with influencers in the countries where you want to make more sales can be a great way of catching the attention of your ideal international clients. Ideally, you’ll hook up with fashion bloggers and vloggers who have a following that is similar to your ideal international client. Influencers are viewed as trusted authorities and trend-setters by their followers and millennials in particular prefer taking style tips from their favourite influencer over more traditional marketing methods. If you’ve chosen the right influencer, it can lead to new customers as well as create a repeatable form of digital marketing for your brand.
Engage With Your Audience. If you’re constantly engaging with your target audience, you’ll improve their perception of your brand, enhance their connection to it and drive sales. Running contests on Facebook, responding quickly to messages on Twitter or promoting giveaways on Instagram are all great ways to engage with your audience and highlight your values and products to shoppers.
Retarget Visitors. You can target visitors by displaying reminder ads that make them recall a product they saw previously on your site. Known as ‘retargeting’, this tactic can be effective with prospects who have an item in their cart but haven’t purchased yet, especially if you offer a discount to shoppers who have abandoned a cart. Retargeting helps to increase turnover and an effective retargeting campaign can produce a great ROI.
Check out marketplaces. We’ve all heard of eBay, Amazon and Google Shopping, but there’s a wide world of niche online marketplaces and fashion apps out there that love working with independent fashion labels, vintage boutiques and pre-owned designer fashion resellers.
The marketplace you choose should depend on the geographic market you want to target. For example, Zalando is top of the pops for women’s fashion in Europe, while North American shoppers love Poshmark. Other popular platforms include Farfetch, Etsy, and Depop. Do your research though, as each platform caters to different audiences and has different price structures – some have greater reach and others are relatively more expensive.
Table of Contents
Interested in expanding your business internationally and learning more about targeting international clients? Pick up a copy of my latest book, Business Beyond Borders: Take Your Company Global.
In previous posts, we talked about two key aspects of understanding your international ideal clients: market segmentation and market research. Now it’s time to put those things together and create your ideal international client avatar.
So why is creating an ideal client avatar important?
“You can’t hit a target you haven’t set”. It’s as true in international business as it is elsewhere, and that’s why it’s so important to have a clearly defined international client persona.
It’s easier to spend time dreaming up avatars of people you’d like to sell to, rather than doing the hard work to figure out who you have been selling to, who you are likely to be able to sell to and what the people you might sell to really want and expect from their product.
However, as I’ve alluded to several times in this chapter, an effective avatar must be based on real information – qualitative and quantitative – in order to be useful. A clearly defined customer avatar will help you:
- Deliver and develop better products/services because you are able to anticipate your markets’ needs, behaviors, and concerns.
- Determine what kinds of media your ideal client is consuming so you know where your business should be present and active (social media, digital media, print publications).
- Be more effective in your marketing and sales. Your marketing budget will go a lot further and generate more impact dollars when you know exactly who to target and how to reach them.
How do I create an ideal international client avatar?
The best way to create your Ideal International Client Avatar is to combine the data sourced during the segmentation exercise around demographics, behaviour, psychography and geography, with the information gathered from clients and potential clients around their goals, challenges and desires. If you run your research in enough depth, these two sources will give you the information that you need to build a nuanced picture of the person, or persons to whom you should be targeting your offering.
What about a B2B client avatar?
In the B2C space, targeting your product is all about facilitating ease: what problem is your buyer facing that your product or service fixes? How can you ease their mind or bring overall ease to their lives? The good news is that translating the buyer persona to the B2B world is also fairly easy to do.
In the B2B world, an effective client avatar maps two things:
- The corporate context
- The decision maker and influencers’ need to more effectively navigate that context.
For B2B companies, the buyer’s context is the company. By looking at your most profitable and engaged customers, you’ll quickly see patterns that will help you understand the context.
It’s also worth expanding your universe to look at customers that surprised you (i.e., responded well to your product or got a lot of value from it) and your aspirational customers (i.e., your dream client) when developing data files. What you want to understand about them is:
- Basic demographics: industry, size, who do they serve, number of employees, revenues, footprint, etc.
- Biggest objectives as a firm for the year ahead
- Biggest obstacles for them as a firm for the year ahead
- Industry dynamics, i.e., what’s their bigger context?
- What’s changing where they’re feeling the pain that you’re alleviating?
I want to focus on the idea of change for a minute, because it’s central to understanding the B2B buyer. Businesses rarely innovate for innovation’s sake. The decision to buy a new accounting system is driven by something such as: growth in revenues that an old system can’t keep up with, a lack of features that are adequate to the demands of public reporting prior to an IPO, or changes in technology that allow more flexible mobile reporting.
Whatever the situation is, something has happened that makes this urgent or important enough to focus resources on now.
Here are some questions that you can ask to better understand what’s changing for your B2B client.
- What’s important to them and what’s driving the change?
- What’s impeding or speeding their need to change?
- How do they go about change?
- What do they need to know to embrace change?
- Who do they turn to for advice or information?
- What’s the value they visualize once they make a decision?
- Who do they have to sell change to in order to get it?
- What could cause the need for this change to lose priority?
The second area that you need to profile encompasses your decision maker and influencers. In effect, this change in the bigger corporate context has created a change for your buyer’s job.
You have to understand that ripple effect and capture that critical data in your profile. Answering the question, “How does this corporate change affect your buyer?” will get you sales.
At the decision maker and influencer level, you need to understand who is involved and be able to answer the following:
- What is their job title and core responsibilities?
- Who evaluates their performance?
- What aspect of their performance evaluation can your product assist, such as increasing efficiencies or cutting costs?
- What’s at risk if they make a bad decision with regard to this purchase?
- Who else in the organization will they impact with their decision?
- How has the bigger company change or pressure impacted them personally?
It’s less important that your B2B buyer in Singapore is Jenny, a 35-year-old office manager who manages two administrative assistants. It’s more important to know that Jenny needs to find a way to report her team’s productivity to her boss, who sees administrative support as a cost center and is under increasing pressure to manage his P&L.
Once you’ve created an avatar for your ideal international client or clients, you’ll be in a strong position to map their goals, challenges and desires against your offering. To find out how, pick up a copy of my new book, Business Beyond Borders: Take Your Company Global.
Table of Contents
How do we align what people want and what we’re offering?
A great way of aligning your offering with what clients want is to build an ideal international client profile, based on a single segment. This profile delves into the client’s goals, challenges and desires, to help us get clear on what clients are trying to do, what problems they are facing and what outcomes they want. This information helps us to understand what sorts of products and services we should be offering to clients.
- Goals - what clients are trying to get done, in their work and in their lives,
- Challenges - the problems and obstacles that they are facing as they try to achieve their goals
- Desires - what outcomes clients want to achieve, or the concrete benefits that they are seeking
Goals
Goals are the things that your clients are trying to get done in their work or their life. A client goal could be:
- the tasks they are trying to perform and complete at work,
- the problems they are trying to solve at home,
- or personal needs that they are trying to satisfy.
When you’re thinking about goals, make sure that you take the client’s perspective – what you think of as important might not be a goal for your client.
Challenges
Challenges are anything that annoys your clients before, during and after trying to achieve a goal, or anything that prevents them from reaching their goal.They can also be risks or potentially negative outcomes, related to not achieving a goal.
Desires are the outcomes and benefits that your customers want. Some of these things are required, expected or desired by clients and some would surprise them. Desires can include functional utility, social gains, positive emotions, and cost savings.
Goals, challenges and desires can all vary in their importance, severity and relevance. While your clients may have a variety of goals, challenges and desires and although individual customer preferences vary, it’s very important to get a sense of which of things really matter the most to clients, so that you can make sure that the products you are putting into the market help them to achieve their most important goals, solve their most important challenges and fulfil their most relevant desires.
Go to the source
There are several ways that you can source the information for your ideal client profile, including:
Interviews
Draw up a list of questions and call your clients and potential clients directly for their input. This is a great way to get a deep understanding of what people are looking for, but it takes a lot of time and effort.
Focus group
This is a tactic used by big firms, and can yield deep insights into what clients are looking for and how they feel about products. The downside is that they are complex to coordinate and can be expensive to run.
Create surveys
You can survey clients using tools like Survey Monkey, virtually for free and this method has the advantage of being quick and inexpensive. The downside is that response rates to surveys are usually very low and the quality of data is often lower, because the format is inflexible.
Run a poll on social media
Like surveys, social media polls are a ‘quick and dirty’ way of getting feedback from prospects. They’re quick and inexpensive, but don’t provide nuanced data about clients’ goals, challenges and desires.
Commission professional market research
This can include interviews, surveys and focus groups. Professional research is more expensive than DIY research, but the advantage is that you can leave the hard work to experienced researchers who know how to find the data you need.
Interested in commissioning market research for your international expansion? Find out how we help companies gain deep insights into their target markets, through qualitative and quantitative international market research and modelling.
In the end, whichever method you choose, it all comes down to this: ask people what they are trying to do, what they struggle with and what they need.
Dig for concrete information
To clearly differentiate between your prospects, goals, challenges and desires, get people to describe them as concretely as possible.
For example, when a customer says “waiting in line was a waste of time”, ask after how many minutes exactly it began to feel like a waste of time. That way, you can note “wasting more than X minutes standing in line”. When you understand how clients measure the severity of inconvenience, you can design better ways to solve their problems.
As you go through this process, you’ll discover that what matters to your clients and potential clients overseas is often quite different to what matters to clients in your domestic market.
What if I don’t have a list of potential international clients?
If you’re starting cold, with no list of international prospects, an interim solution is to begin creating your ideal client profile with your best guess as to what is important to your future customers. The caveat is that you’ll need to test those assumptions to make sure they truly reflect priorities from the client’s perspective, before you’ve invested a lot of time and money in a particular strategy. If this seems like a daunting task, it could be time to commission some professional research.
In my next post, I’ll be covering how to create your ideal client avatar, by putting everything we’ve discussed so far together.
Table of Contents
Manufacturing in Australia has had a long and proud history, but over the last 30 years the industry has stagnated. Aussie companies have been unable to compete with our neighbours on cost due to distance, higher wages and the price of energy. Governments and large corporate companies offshored manufacturing projects, rather than support local business and spend the money in Australia.
Today, manufacturing in Australia makes up just 5% of our GDP and 5.4% of total employment. We import many things that could be made here, and many manufacturing companies produce offshore as the cost is much lower.
However, COVID-19 has turned everything upside down. In 2020, supply chains around the world were disrupted and the cost of freight nearly doubled. Australian businesses were also affected by a deteriorating trade relationship with China, and the Chinese government introduced huge tariffs on most of our main export products, including barley, wine and coal.
The Australian Government recently announced a new Modern Manufacturing Strategy as part of its JobMaker plan to stimulate the Australian economy and speed recovery from the COVID-19 pandemic. The strategy will see $1.5 billion invested in Australian manufacturing over five years from 2020-21 targeting six National Manufacturing Priorities, identified as either areas of competitive strength or strategic national priority.
The National Manufacturing Priorities are:
- Resources Technology and Critical Minerals Processing
- Food & Beverage
- Medical Products
- Recycling and Clean Energy
- Defence
- Space
With this renewed attention and financial investment, Australia’s manufacturing industry will be re-energised and more appealing to companies that are making brilliant products here and are looking to export them overseas. At Dearin & Associates we are working with Australian business owners, helping them to go global and amplify their impact on the world. Currently only about 5% of Australian companies are in overseas markets and we want to grow this number exponentially in the next decade.
Going Global in a Post-COVID World
To go global, you need a crystal clear strategy and laser focus. COVID-19 has taught us that you have to be dynamic and agile enough to pivot your business when things change unexpectedly. We work with clients that have had huge success in the last year, despite the turbulence and unfavourable conditions their industries have faced. Without the ability to travel, the world felt a lot smaller and it became easier to do business with anyone, anywhere in the world. Business owners with a clear vision and strategy suddenly had more time to execute their plans and took the leap to either begin their export business, or totally renew their brand and messaging, bringing great results.
I’ve recently spoken to four Australian manufacturers that are killing it on the global stage to see what advice they can offer to aspiring manufacturers who are thinking of going global. Here’s what they said…
Paul O’Brien - AirPhysio
These types of devices have actually been around since the 1980s, but AirPhysio overcame the design flaws of competitors’ products and identified the product’s need in a lot of niches in the market. It manufactures a product that is now sold in five different continents. Co-Founder Paul O’Brien always had a vision to go global, and this mindset helped him develop his business the right way from the start. Paul says that financial modeling that includes global expansion has been critical to his success, along with systemizing business units so they are efficient. AirPhysio has implemented systems across the business, enabling them to train people up faster.
Organisation and looking ahead is also key.
“The vision I try and put together is actually three to twelve months ahead at least - if we need this in 12 months, we need to buy it now”,
Paul also says that being able to look outside the box and move quickly are extremely important factors. AirPhysio surpassed its full year growth targets by March both this year and in 2020 as the world went into lockdown. What started as a business in his living room now employs over 40 staff in Australia, with plans to have 100 by the end of 2021. As the Managing Director of AirPhysio, Paul knows that he needs to work with organisations that will assist him with developing and executing his business strategies, and giving him the knowledge to go into each market successfully. I look forward to seeing AirPhysio in every continent very soon!
Jill Saunders - Beauty and the Bees
Beauty and the Bees is an all-natural eco-friendly hair and skincare range sourced from Tasmania’s mountains, seas, farms and rainforests.
Jill Saunders came to Australia backpacking from the UK on her motorbike and fell in love with Tasmania’s natural beauty and natural resources. Jill harnesses these resources for her hair and beauty products, which are made from Tasmananian leatherwood honey. When she arrived 30 years ago, Jill had a plan that she would develop beautiful products sustainably and market them overseas. That dream has become a reality.
Jill started at Salamanca market with a card table and a motorcycle. These days she has a 10,000 square foot factory employing eight staff, and a retail store that is renowned for its quality products and friendly service. Over a 30 year period Jill has stuck by her values of making superb (and sustainable) products and delivering service excellence – always under-promising and over-delivering. In 2013, Jill and her business partner identified the USA as a key market and began selling via Amazon.com. In 2021 the brand is in the top 5% of sellers on the site.
The move into the US has been so successful that it now represents 80% of the company’s total revenue. Jill notes that making sure her brand remains fresh in the market is key. Her team recently spent 18 months refreshing and relaunching the Beauty and the Bees brand to ensure its continued success both in Australia and overseas.
Choosing where to manufacture their products has also been important. Jill is moving production out of Tasmania, into Melbourne due to the cost of logistics and freight. She says that as a business owner you need to make these decisions that take time to set-up, but benefit the bottom line. Have a look at the beautiful products at Beauty and the Bees.
Hydro-Dis - Mark Carey
Since then, the Hydro-Dis product has been sold around the world – to India, Malaysia, China, Indonesia, and the Philippines – anywhere where there is a need for safe water. This market diversification has been key to Hydro-Dis’ success, and Chief Executive Officer, Mark Carey recommends being prepared to visit markets in-person. In a three-year period, Mark has visited India 11 times.
Finding the right distribution partner to work with is also a key factor, as is the ability to manufacture and price the product according to the market that you are going into. Hydro-Dis’ cell packs are made under licence in China and the product is finished and assembled in India. Manufacturing elsewhere would mean the product was not competitive in the Indian market, which is extremely price sensitive. Hydro-Dis white labels and mass distributes the product out of India, which allows it to diversify its markets, rather than just relying on one operation.
Marks credits his success partially to stubborn perseverance and he is excited about the future for Hydro-Dis, watch this space!
Richard Dolan - Bec Hardy Wines
Being able to pivot the business quickly is one of the reasons they are still here, and in 2020, sitting in his McLaren Vale office, Richard established nine new export markets, spread across Asia, North America and Europe. This market diversification mitigates risk and presents new opportunities. At the same time, re-building a domestic tourism offering ensures that their brand recognition continues to skyrocket as Australians are staying home and supporting local business more than ever. Richard points out the importance of solid distributor relationships and being able to differentiate your brand is a key to success. He also credits their success to having an entire team of staff producing premium products and offering first class service to their loyal customers. Having a clear strategy from the outset is a must, along with the flexibility to change your path when obstacles arise. Patience in negotiating deals overseas is also important, as it can take years to get a signature on a contract. I’m sure we will see Bec Hardy Wines’ star continue to rise!
These four business owners each demonstrate having a crystal clear vision, combined with sheer determination and the ability to adapt and make changes to ensure success. They also know when to seek assistance from business experts to ensure they are setting up their finances correctly, receiving grants they are eligible for and that their market entry strategy is sound. Australians are known for being optimistic and resilient and with the renewed focus on our manufacturing industry, the next 10 to 20 years should bring a resurgence of Australian companies manufacturing and exporting.
If you are looking at expanding your business globally you must have crystal clear vision and a winning strategy. Contact us to see how we can assist you!
Table of Contents
As I write this post, the COVID-19 pandemic is reshaping the global business landscape and the world as we know it. For many executives, just surviving is a fight to the death and expanding internationally is the last thing on their minds.
But if you’re a business leader with big dreams, you still need an international strategy. COVID-19 has slowed the movement of goods and all but halted the movement of people, but global business isn’t going away. It’s evolving. To keep up, grow and flourish, you need to evolve too.
The death of distance is a key driver for international business, even as we grapple with COVID-19. Massively improved supply chain logistics, travel and technology are enabling goods, people and ideas to move around the world faster than at any other time in history.
Activities that previously had to be done in one place have been unbundled and spread out around multiple geographies. In many industries, especially elaborate manufactures, supply chains have become truly global. New technologies let us meet people on the other side of the world, transmit our data across the globe in a heartbeat and make and receive payments in the space of a few minutes. Services including telemedicine, architecture, design, accounting, coaching, management consulting, and dozens of others can be provided from virtually anywhere, irrespective of where the customer is.
The death of distance has implications for almost everyone in business, because we can communicate and work with customers and suppliers who were unreachable just a few short years ago. For now, global trade in goods has slowed, but it will eventually return to historic levels, because the movement of goods is far less risky than the movement of people. That said, I believe that we’ll see a big, permanent step change in the way services are sold.
Limitless opportunity means unbridled competition
The downside to limitless opportunity is a massive increase in competition. If barriers to entry fall and you can suddenly sell anywhere, people from all over the world can suddenly sell into your home market too. And if they can create and sell a better product at less cost and market it with equal flair, that’s the end of your market share. The truth is that the dark side of borderless markets (increased competition) should be just as great a driver for a perceptive CEO as its bright side (increased opportunity).
Even if you put current global trends aside, the classic reasons for international scale continue to matter.
Reach more customers
Access to international markets enables access to more customers. This matters for any company that only has clients in one geography, and is especially true if you are based in a country that has a relatively small domestic market.
Over the last 20 years the global marketplace has grown by around 3-4 billion new customers, to a total of around 7.6 billion people. This reflects the way in which economies have evolved in that time. Not so long ago, China and India were still considered developing countries. These days they are leading economies whose rapidly expanding middle classes have money to spend. Similar trends are apparent elsewhere in the world as the middle classes grow rapidly throughout Asia, the Middle East and Latin America. In many cases, 99% of the people you could sell to are now located outside your own country.
According to the Brookings Institute, the next decade could see an even faster expansion of the middle class than at any other time in history. Globally, the middle class is already spending $35 trillion annually, and could be spending $64 trillion by 2030, accounting for roughly a third of projected GDP growth. Within a few years, based on current forecasts, a majority of the world’s population could have middle-class or rich lifestyles for the first time ever.
This explosion of middle-class populations with increased purchasing power and a hunger for higher standards of living has generated huge demand for all types of products and services, which host countries often can’t meet. The sheer volume of the opportunity that the rising middle class represents is often difficult to grasp. For example:
India’s electronics market, valued at USD 120 billion in FY17/18, is expected to grow to USD 400 billion by 2025.
And in China, high quality Australian milk can sell for up to $9 per litre, compared to its $2-$4 price tag in Australia.
Incredibly, even these enormous markets for “traditional” products are dwarfed by the opportunities in emerging sectors. For instance, the global market size of Internet of Things (IoT) platforms was USD1340 million in 2017 and is expected to reach USD9960 million by the end of 20252. And these examples aren’t outliers. Do a quick Google search for your sector… you’ll find dozens of opportunities of the same magnitude.
Many multinationals, tech giants and luxury brands have gone on the front foot to gain a first mover advantage and position themselves to capture middle class consumers as they move out of poverty and into the middle income bracket. The good news is that micro-to-medium-sized businesses can capitalise on these opportunities too. Plenty of smaller companies are carving out their niche in international markets and gaining access to new clients that they wouldn’t have won if they’d stayed at home.
Case Study: Siteminder
Mike Ford and Mike Rogers started Siteminder in 2006. It began as a two-person operation working out of a rental home on Sydney’s northern beaches. The company now has 800+ staff, services over 35,000 hotels around the world and generates more than AU$100 million in annual recurring revenue. 80% of Siteminder’s turnover comes from offshore and it processes 87 million hotel reservations a year, or $38 billion worth of hotel, Airbnb or bed and breakfast stays. These days, Siteminder is considered one of the 20 greatest pioneering technology companies to come out of Australia and New Zealand.
Case Study: Emma and Tom’s
Australian juice and snack company, Emma and Tom’s was founded in 2004 by childhood friends Emma Welsh and Tom Griffith. Getting a fruit based drinks business off the ground was anything but easy in the early years. The first batches didn’t taste good, Emma and Tom couldn’t get anyone to make their instantly recognisable bottles, and the distribution just wasn’t working.
Today, Emma and Tom’s Emma and Tom is an international brand, sold in Jordan, Dubai, Hong Kong, Singapore and Malaysia.
Case Study: Jane Jackson Career Coach
Jane Jackson is a career management coach and solopreneur who services clients all around the world. Originally from Hong Kong, Jane established her coaching business in Australia in 2001 and recognised the opportunity that rapid advancements in technology offered her business.
Instead of flying around the world to deliver training for her clients, Jane began using videoconference technology while maintaining the same standards of service as her in-person clients received. She discovered that changing her delivery model radically changed her business as well. Jane was able to reach hundreds of new clients while dramatically reducing the cost of providing advice. She saved time, money and energy by working remotely, and maintained a healthy profit margin. Today, Jane has worked with over 1000 professionals from Asia and Australia to reinvigorate their careers.
Spread your risks
The expression “don’t put all your eggs in one basket” applies equally to investment portfolios and customer bases. In an investment context you spread risk among different types of assets to protect the portfolio against wild price fluctuations by just one or a handful of stocks. The same principle applies to a company’s customer base. A business can pay dearly if too many of its customers are concentrated in one country and conditions change quickly. If you only sell in one market and there is a downturn, new competitors appear, regulations change or your machinery fails – damaging your product and losing you a major contract – sales may drop dramatically, putting the company at serious risk.
Diversifying your markets offsets risk in the domestic market by opening up opportunities with new clients, new partnerships and joint ventures, as well as new opportunities to develop products for specific geographies. Diversification can also help smaller companies survive tough economic times and political volatility, factors which are increasingly important as global politics and the dynamics of international trade continue to shift rapidly and unpredictably.
Case Study: Skimlinks
Alicia Navarro, Founder of automated affiliate marketing firm, Skimlinks started her business in Australia in 2012. When she realised that there was virtually no market for her product in Australia, Alicia moved her operation to the United Kingdom. Through her clients in London, she was able to target many of their parent companies in the United States as well. Two years later, the company expanded to the US market. Today, Skimlinks facilitates $1 billion worth of transactions for its clients and is used by more than 4 million websites worldwide.
Protect against competitors
International expansion doesn’t just let you reach more customers, it’s also a hedge against the competition and it’s never been more important than now. As I mentioned above, the transformation of global economies has created 3-4 billion newly-minted consumers with money, but it’s also created a sea of well-educated, hard-working people with aspirations. Meet your new competitors.
In the services sector, it’s becoming easier and easier for these competitors to take your clients as technology continues to shrink the world. You don’t need a big imagination to see how a surge of new, international competitors could threaten your market share.
When it comes to goods, tariffs were once a major hurdle to doing business internationally and a barrier to competition. Despite the US-China trade war that has plagued international markets recently, that’s generally not the case anymore. 60 years of trade liberalisation has dramatically reduced tariffs, making it cheaper to sell goods overseas and compete with locally produced products. In some senses this is a plus, but low tariffs also make it easier for international competitors to sell into your domestic market. Sooner or later, most sectors will face threats from foreign entrants, and in sectors like retail, local players are already feeling the squeeze.
Foreign competitors are not the only worry. Even if you’re confident that your industry is safe from external threats, you can’t afford to ignore the threats at home. Some of your canny domestic competitors have already realised that they can turn geo-arbitrage to their favour. They’re using web developers and designers from Jamaica, graphic designers from Hungary and Slovenia, bookkeepers from India and virtual assistants from the Philippines to source services for themselves and their clients at a fraction of the cost of buying domestically. And that means they can reduce their cost of goods sold and undercut you, while still making a profit. I work with companies that have built their entire offering around the geo-arbitrage model, and they’re doing well.
Expanding overseas remains a smart way to counter the threat from overseas competitors and local firms capitalising on geo-arbitrage to compete with you at home.
Control costs
Every astute CEO wants to reduce expenses and entering the global arena can help to achieve this.
Across Asia, countries are competing to attract foreign businesses to set up on-shore, by offering low taxes and set-up costs for companies. Vietnam and Malaysia are leaders in this space and both markets also offer extremely high-speed internet and attractive living conditions, making them an emerging hub for the media sector.
If done correctly, using offshore resources can be a highly effective way to reduce costs. In Asia and India top talent is available across a range of business functions at a fraction of the cost of hiring the same person at home. This trend is no longer just the domain of big organisations. Growing numbers of smaller companies now rely heavily on virtual assistants and back office staff, as well as professionals including engineers, architects and accountants from countries with lower costs of living and employment.
You may also find more economical solutions to your production and manufacturing challenges offshore, although in the current climate, COVID-19 has manufacturers everywhere reevaluating supply chain reliability and looking for supply chain solutions closer to home.
Maximise profits
Overseas markets may generate higher returns for your business, especially if they are less advanced, attractive or competitive than your domestic market, or harder to do business in. Difficult markets usually attract fewer foreign companies and you may find that there is a blank space in the market that you can fill, potentially allowing you to charge a higher premium than you can attract at home. Niche milk-producing companies Bellamy’s and A2 Milk – which sell infant formula products to China at higher retail prices than they can command at home – are good examples of companies that have tapped international markets to maximise profits.
Expansion equals innovation
In an era when robots are replacing highly trained professionals, business leaders can’t afford to be complacent about innovation. The commercial and technological environment is changing so quickly that those who stand still will be left behind.
The good news is that research suggests that operating internationally drives innovation. In other words, if you want a company that is more innovative, productive and competitive, look offshore. Exposure to new ideas and clients and the challenge of generating solutions to new problems will help you and your team become more innovative and more productive, creating an enduring competitive edge, at home and abroad. The result? A virtuous circle with the potential to drive further international success.
The word ‘innovation’ conjures up images of ground-breaking new inventions and revolutionary technologies, but most innovations are an evolution, rather than a revolution. A change to your processes, delivery model or even your marketing can be just as effective as a new product in creating a lasting competitive advantage, increasing margins and helping you unlock profitable new markets.
Here are five different ways that small companies can use innovation in international markets to drive growth:- Product and service innovation – Selling internationally can help you find a broader customer base for an innovative, niche product that may have a limited market onshore. It also lets you capitalise on innovative product features with unique appeal offshore — the same features which might not appeal at home.
aussieBum, Sean Ashby is a living case study of product innovation on the international stage. After his concept was scorned in his native Australia, Ashby took his apparel ideas overseas, securing none other than luxury London department store Selfridges as his first stockist. These days, aussieBum has global sales in excess of $150 million.
On the flip side, adapting your products and services to the special needs of an overseas market is also a proven route to international success.
- Delivery innovation – Finding an innovative way to distribute your product or service can be game-changing for your company’s performance in international markets. Digital technologies have made it easier than ever before to reach out to overseas customers directly, creating many new opportunities, particularly in the services sector.
- Business model innovation – New business models have the power to overturn established players and reshape entire industries. Businesses like Amazon, AirBnB, Google and Uber have revolutionised entire industries with powerful digital platforms that can be used to deliver a whole range of products while sidestepping traditional distribution channels. Yet some of the most effective business model innovations are refinements of existing strengths, rather than revolutionary new methods of doing business. If you already have a great business model, think about which aspects of it could be tweaked to reach new customers overseas.
- Marketing innovation – Making sure that your marketing appeals to customers in new markets is essential to international success. Although this takes some work, innovation in international marketing is easier and less expensive than ever before, thanks to digital technologies and social media.
- Financing innovation – Securing finance for international ventures is a key challenge for many small companies. But innovative finance methods are becoming increasingly popular and creating new opportunities for international businesses. For example, a growing number of startups are using crowd-funding: raising capital directly from the public, usually via websites and social media channels.
Increased company value
Latest Insights
Read the latest insights on international market entry from our #GoGlobal blog:
Brewing Success: How Starbucks Won Over China
Table of Contents Always Start With Market Research Brand Positioning: A Blend of Strategy and Sensitivity Leveraging Premium Pricing as a Power Move Strategic Partnerships
Australia Market Entry: DIY or Distributor?
Though geographically distant, Australia has emerged as a highly attractive market for premium European consumer brands. Its multicultural population, political stability, and strong purchasing power continue to draw significant foreign direct investment.
Australia: A Mining Powerhouse: Opportunities, Challenges, and the Road Ahead
Australia has long been a global leader in the mining sector, renowned for its abundant mineral resources, stable political environment, and world-class infrastructure. The industry
