Consider expanding your business overseas? Then you have come to the right place, as below you’ll find some of the most common mistakes that organizations make during international expansion, along with guidance on how to avoid them.
Ignoring cultural nuances
If you are expanding overseas, ignoring cultural nuances at your peril, as they can significantly impact your chances of success. For example, when Parker Pen expanded into Mexico, their slogan was meant to read, “It won’t leak in your pocket and embarrass you.” Unfortunately, it was translated wrong and ended up as, “It won’t leak in your pocket and impregnate you.” Similarly, when KFC moved into China, their “finger licking good” slogan became the rather more disturbing “eat your fingers off.
Yet, it’s not only translation mistakes that can prove culturally off; sometimes, it’s the product itself that’s not a good match. An example of this is American retail giant Walmart’s unsuccessful expansion into Germany. A situation resulting from a cultural mismatch between American and German values.
Incorrectly estimating expansion costs.
Another hugely disastrous mistake you can make when expanding your business overseas is to underestimate the cost of such an expansion. Indeed, while many carefully consider increased costs and areas such as setting up physical premises, initial marketing, and employment, others, including the costs associated with local and regional compliance, legal fees, and the need to customize the product or service for the local market, are often neglected.
Unfortunately, neglecting such costs can put your business overseas at risk of financial strain, which can seriously threaten the success of an international expansion. Neglecting these costs may expose your overseas business to financial strain, potentially jeopardizing the success of your international expansion efforts.
Forgetting, you will need to be able to take payments in a variety of currencies.
Being able to receive payment for the products you sell when growing your business overseas is a crucial element of any successful international expansion.
Unfortunately, taking payment in a range of different currencies can become very complicated very quickly. This is due to the fluctuating value of all the different currencies, as well as the addition of regional or national taxes, which vary from location to location.
The good news is that there are services available to help you accept foreign transactions with minimal hassle. Something that can significantly contribute to providing your customers with a positive experience and their overall satisfaction with your business.
Focuses on too many different markets at the same time
Going international does not mean selling your product in a single, cohesive market. Instead, you will be selling it in a range of unique markets that can differ between continents, countries, and, in some cases, even regions.
This means you should avoid the mistake of trying to break into every market simultaneously. Instead, it makes more sense to focus on one or two that share a common connection, such as being located on the same continent. Then you will be able to adequately address all the other concerns mentioned in this post and ensure the maximum chances of success for your international expansion.
