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Email: office@opensolutions-london.co.uk
Growth
Growth
Global expansion during Covid-19 isn't derailed.
COVID-19 has swept the world causing uncertainty and disruption. Businesses need to now face and deal with significant changes in consumer behaviour, communication channels, supply chains and routes to market. These are some of the things that are knocking companies off the previously beaten track.
Forecasting and analysing trends is almost impossible, and the traditional benchmarks used to manage the business have become out-of-date.
One would think this is not an ideal climate for market expansion and yet over the recent months, Open Solutions Global have had many enquiries of companies interested and ready to explore the opportunities outside their domestic markets.
29 Sept. 2020 \\ Growth Author: Patrycja Maksymowicz
Operations
The best approach one can take is to recognise the fact that international business is not an expansion of your domestic operations beyond your home country. It is a different business with different needs and requirements than you have known before.
You will meet many operational challenges, particularly related to legal regulations, recruitment and compliance, and they can take months to navigate. But the biggest issue is usually the time (and cost) involved with establishing legal entities or subsidiaries.
Finance Issues
The CFO research revealed that 74% of executives expressed concern with navigating foreign banks and international employee payroll in these volatile times.
Other key questions to ask yourself:
- Are you ready for the costs related to establishing business abroad such as legal and consultancy fees, salaries, market research, local marketing campaigns?
- Are you able to get financial support for your business if needed?
Communication and culture
- How comfortable do you feel operating in the target culture?
- Do you know how to build trust?
- Do you know how to set prices and negotiate deals?
- Do you know enough of legal nuances and differences that can create a challenge outside your home environment?
One of the biggest differences between doing business domestically and internationally is the culture and our false assumptions about the character of the market. The ability to skillfully navigate across cultures while conducting business outside of your domestic environment has always been vital to success, now they have reshaped even more as we all have had to adjust to new circumstances.
Business Advice
The CFO Research confirms that it is quite uncommon to possess the knowledge and all the skills required to navigate successfully and face the challenges when you endeavour into the new market for the first time.
83% of surveyed executives expressed concern managing multiple third parties and stakeholders in a foreign environment during a volatile economic climate. The employee health and safety was also a top concern related to global expansion, other leading issues, are new business strategies, increasing sales pipeline and revenue, and reducing organisational costs.
And last but not least...
- Are you up to date with the local changing regulations related Covid-19?
The support of local consultants who know how to avoid pitfalls might not be cheap but in comparison to the costs of failed attempts and missed opportunities, an investment worth considering.
For some, things can take slower than usual now for others it is the time, and a chance to accelerate. There are always multiple windows of opportunity every recession opens.
Numerous inspiring solutions have seen the light in what seemed the darkest times.
- UPS (panic of 1907)
- Fortune magazine (90 days after the market crash of 1929)
- United Airlines (1929)
- FedEx (oil crisis of 1973)
- Microsoft (recession in 1973 – 1975)
- Netflix. Year founded: 1997
- LinkedIn (2002, post-dot-com bubble)
- Airbnb. Year founded: 2008
You might not be aiming at one of the top positions on the 2020 or 2021 lists but whatever your plans and goals are, the challenges we are all facing now should not hold you back from growth.
In light of this, the results of the survey conducted by Globalization Partners and CFO Research should come as no surprise.
'Despite the pandemic-induced slump, 45% of respondents are either currently expanding globally or only slightly delaying their expansion', most until 2021.
It looks like the majority of businesses have not been discouraged by the setbacks of COVID-19 and are still moving forward with expansion plans.
All this means that while some are still sitting on the fence, others are taking advantage of the opportunities. And, we know well that the worst thing for a business to do in a crisis is to slow down or put actions to a halt. There is a risk that the gap caused by a different approach between the two groups will increase once we are out of the current economic crisis.
So, the question is how you want to position yourself, as the position and approach you take now will determine where your business will be once the recession is over.
Expansion to a brand new market can be challenging and now even more than ever. The ability to skillfully navigate in this very new and uncertain global environment is essential. To avoid fiasco or falling into too many pitfalls, several factors need to be taken into consideration.
Customer Focus
You would consider several factors such as the ones we have already covered in 'The world is your Oyster, but do mind the (culture) gap'.
- Would your service/product sell well in the target culture?
- Is the target market familiar with it?
- Are you prepared to invest time and money in consumer education?
It has never been more crucial than now to take a glance at your business through a customer lens. Not only vital but also an opportunity for you to develop the business further. According to Accenture, 'this crisis offers a unique chance to build trust with customers and reset around their needs, including how they want to buy and receive service'. So, rethink your channels and ecosystems carefully.
Learn from the success of others, your partners, competitors, clients. How are they adapting to the current situation? Pursue every single unique opportunity to accumulate assets, IP and the right talent in the search for new growth pathways.
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Importantly, we can also help you uncover risks you might not be aware of.
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