7 reflections on internationalization… and the crux of the matter

After more than 25 years working with companies on their internationalization, there are a number of lessons and mistakes that are frequently repeated. One of them is very characteristic of this time of year: confusing a vacation destination with a potential market.

1. A good vacation is not a market study. No matter how many points of sale you visit or how much you observe on the street, that's just the tip of the iceberg. You need to delve deeper into legislation, pricing and margin structures, competition, distribution channels, the expectations of end consumers, and the entire value chain.

2. All markets are more complex than they initially appear. It doesn't matter what AI says, whether it's a neighboring country, part of a single market, or the tenth largest export market. That's why collaborating with local experts who can complete, facilitate, and accelerate the process is crucial.

3. Exporting must be led from the top down. Opening a new market requires time and financial resources that can only be allocated by senior management. If operational teams don't include internationalization among their objectives and compensation, or if managers don't address it in their daily work, the project will fail.

4. Exporting has a multiplier effect, for better and for worse. Companies that know their business well, have well-defined processes, and employ high-performing teams will also succeed abroad. Any shortcomings in these areas will hinder international growth and ultimately affect the domestic business as well. And, with few exceptions, if a company doesn't meet expectations in its own market, it won't compensate by exporting to a country it knows even less.

5. Exporting is about localization, not just translation. Simply translating the website and brochures and changing the currency in the price list isn't enough. You have to ensure that the company and product names don't sound out of place in the new market (most car manufacturers know of more than one example…) and that the corporate colors and their usage are appropriate.

6. When exporting, it is not only necessary to know the distance, times and costs to get the product to the new market; it is also vital to know the distance to other producing countries or those that may be excessively competitive for any reason, such as proximity to very influential markets like the USA or China.

7. Trade fairs are a common resource for exporting, and there are outdated ways of doing them that need to be changed. If you're only going to attend for one year, it's better not to go at all: a trade fair is a multi-year commitment to see results. And if you don't organize an agenda and a list of companies to contact, it's also better not to go. The days of sitting around waiting for buyers to come to you are long gone.

For those who, more or less, are enjoying their holidays while already thinking about "back to school" and the business: these reflections are not meant to discourage, but to invite an honest look at the real situation of the company, all its resources (money, time, internal and external experts), its priorities and its objectives.

Theory says that exporting is a strategic decision built on data, time, solid processes, and commitment from top management. Honesty, however, often leads to decisions made on a whim during a pleasant summer afternoon. And that, ultimately, is the crux of the matter: no company grows in a new market simply because of a great vacation there, no matter how good it was. If a particular destination this summer has made you dream of a new market, the truly important question isn't "Why not?" but rather "Are we really prepared to do it right?"

Alex Bañeres 

Mr. Consultant Gedeth