Thursday, January 26, 2017

Going Global? Choose Your Country Wisely

Guest post from Anna Schlegel:

More than half of Google’s revenue comes from outside the United States. Facebook, Apple, or PayPal, all enjoy global success. These companies have “going global” down—they perform strongly in international markets, and can execute across borders because they embed globalization on their daily executive discussions.
Develop a Globalization Strategy
 
Part of the agility for a company to stay strong globally is the makeup of their country investment. Being decisive on how to prioritize global expansion is key here. Many US companies fear the unknown and are not convinced you need to diversify geographically to scale. However, those companies with a globalization strategy will reap the benefits.

So, what countries do you choose to start with? Most of these decisions are made in an HQ setting in alignment with regional general managers tasked with global business expansion. In a major corporation, it is common to see a general manager in charge of Asia Pacific, another for Europe, Africa, Middle East, and another for the Americas. Of course, there are countless combinations among those, depending on where your company originated.

Most innovative and technologically superior products have the potential to become global if they are needed, are better than what exists, and will improve people’s lives. They can see huge success in China or the United States simply because of its pure customer diversity and thirst for constant improvements.  International growth by going global as an importer-exporter offers opportunity aplenty. However, companies do not typically start their operations with a global plan. Most companies spend years perfecting product features, go global in a handful of countries and then go global in a larger set.

Create a Cluster of Countries
 
The standard way of going global is to enter known territories such as a town across the border of a neighboring country. Many companies take advantage of their own treaties or free trade agreements. Most enterprises target top economic powers such as the United States, China, and Japan.

Clusters can form for the following reason:

·         Compliance with your government’s trade advisory rules.

·         A directive from the board of directors.

·         OEM models are ready to go.

·         Joint ventures become available and point to a handful of countries.

·         Pathways give reach to a specific set of countries.

No two sets of country clusters will look the same, and an enterprise globalization plan will look different for Japan than for Turkey. The following examples are decisions to be made at the executive level:

·     Will the company be selling indirectly through partners or will you hire sales teams, or use both methodologies?

·     What are the local teams needed to support each country in your company’s list: i.e. HR, Legal, Facilities, Sales teams, Marketing, Support, Professional Services

·      Legal entity creation.

·      Map a plan for 1-2-3 year growth.

·     A product globalization plan: what products are ready and internationalized?

What is Geo-Alignment?
 
Organizing a country strategy and explaining to the rest of the company which countries matter most clarifies intent and aligns efforts to the right business opportunities or calculated risks. You do not want everyone in your enterprise supporting each country in the same capacity because no two countries are the same, some bring back much more revenue. It is important that you have the list of countries that matter in your company, and you understand who brings home the top revenue.

Once clusters of countries are defined, you can explain that to the full enterprise and align your resources to countries and portfolios. That will help make decisions on budget and resources, and will focus everyone on the top opportunities. If you are leading globalization for your company, your first questions should be: “What countries should we focus on, and what is the strategy for each tier?” Your CEO and general managers will tell you if focusing in the Philippines is more important than Vietnam.
Don’t Get Lost in Translation
 
You will often need to factor in the tolerance of a language in the country if localization cannot be budgeted for. For example, you will most likely want to localize a product for Japan from English before you localize a product into Norwegian, simply because Norwegians are more English tolerant. I am generalizing here, but understanding what languages your countries can tolerate will help you make decisions if you have to.

Ideally, your company has a model that explains which countries deserve what entitlements. This includes which countries will have a call center in the primary language, localized products, a comprehensive digital presence, and globalized partner programs.
This is where your globalization strategists will spend the most time. They will advocate for these entitlements to happen for specific countries. Rallying a whole company to support local product sales with properly laid out entitlements and plans is a winning strategy, and your globalization team should have a major stake in this.

Anna Schlegel is the author of Truly Global, and named the first globalization innovator by SDL/Fortune. She is currently the Senior Director of Globalization and Information Engineering at NetApp, and has led globalization teams for over 20 years with firms including Cisco, VMware, Xerox, VeriSign and for two localization vendors as the CEO and General Manager.

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