Any professional involved in the international expansion for his or her company understands that the task will not be particularly easy. But what is that keeps CFOs and others up at night when considering setting up international operations? Our recent survey of members of the LinkedIn Forum for International Expansion found that, not surprisingly, there are multiple challenges to work through.
As of results gathered through today, Jan. 13, 37 percent of survey respondents asserted that knowing where to start was the top challenge. “They [companies expanding] often don't know the right questions to ask to get the answers they need,” one wrote. With international expansion, there are so many particulars and minute details to be aware that it is often difficult for companies to know where to begin. This can be the case even if a company already has overseas operations- no two countries operate in the same exact way, so the rules are always changing.
Additionally, more than a third of respondents noted that finding the right local partners is the most challenging issue. According to one respondent, “The proper team is important to succeed when expanding internationally.” Of course, this also applies with domestic business, but internationally, it is absolutely essential. Companies will need to address a number of questions when going overseas: how do I pay my employees, how do I stay compliant locally and more. Finding the right experts on the ground, whether for accounting, legal or other support, is key to success.
Those taking the survey also had a lot to say about a common approach to going global: standardization. “We have a tendency to believe that globalization means one size fits all... not so,” said one respondent. Standardizing products and approach worldwide can be one of the big mistakes for a company when trying to do business overseas. Just because it works in Boston doesn’t mean it’s the right model for Beijing. “A lot of U.S. companies go in [overseas] over confident that their methods for growth [in the U.S.] are a surefire way to achieve success overseas,” according to another commenter. “The one-size-fits-all approach is a recipe for disaster.”
The survey also stirred up comments on the importance of awareness of specific market needs. “The hardest part is to truly understand how to tweak the product and modify one's marketing/sales approach to make the product or service palatable in the host country,” said a respondent. But companies do need to be careful not to lose what’s essential about whom they are and what they do: “Some companies tend to overcompensate and become oversensitive to local culture - enough so that they lose the identity of the brand that made them successful in other markets.”
What are your thoughts on what’s most challenging for a company expanding internationally? Login to LinkedIn to take the poll and join the conversation around overseas expansion.