Fresh Information for International Success
Our regular readers are familiar with our strong belief in injecting a constant flow of fresh information into your management processes (see Issue 4: “Don’t Make Decisions in a Vacuum”). The risks of international business make this idea even more important as you develop and execute your strategy.
The information you gather about a foreign market includes some of the same data that you would use domestically: size of the market, competitive structure, and needs of the customer. But, there is significant additional data that you may not think about because it includes factors that you take for granted in your home market:
- Local market practices
- Culture and customs
- Legal requirements on business
- Political trends and power structures
- Currency regulations and/or restrictions
- Language and communication norms
Many of these factors change greatly from country to country; it is extremely important to spend the time to learn about a market and find the best partners possible. When I worked in Latin America for Citibank, we frequently hosted visiting companies to gain a first-hand view of the country. If you are doing business offshore, ask your bankers, lawyers, and accountants for personal introductions to trusted contacts in your new market. Use these introductions to make sure that you get off to the right start.
But, don’t rely on advisors alone. You also need to travel there to see things for yourself. Take the time to see the local situation, get to know your partners, and/or your employees. And, do your homework:
- Are you asking your international partners to do something they’re experienced in doing?
- How do their references check out?
- Have you evaluated the risks against your expected return?
As with any project, the more research and planning you do up front, the fewer nasty and expensive surprises you will encounter later on.
-Mary Adams 2004
