International market development – What do you need to know?
In international market development the aim of globalizing a company is primarily to increase the growth- and sales targets. By using different methods (e.g. branch establishment, joint venture, sales partners, company acquisitions) those targets can be reached.
Often different problems arise due to the integration of new activities. People who speak different languages and are perhaps from different cultural areas have to work closely. Many processes need new structures and the IT-systems have to be coordinated with one another.
The realization of growth in the market does not align with the original targets.
In the following points we will take a closer look at both sectors and compare theoretical aspects with practical examples. Our co-author is Wolfram Seidel, who specializes in solving conflict and monitoring company mergers and acquisitions.
Concerning the topic rapid growth, we will take a closer look at the following points:
- Company acquisition vs. branch establishment
- Branch vs. sales partners
- Franchising as a possibility for a rapid growth
- How to build a strong network in short time?
- Which opportunities exist to assert oneself in the market?
- Which research methods should be used? How to find suitable properties to purchase or suitable partners? How can I prove their reliability?
The following points highlight secure management and integration of new branch or sales partners:
- Which basic rules have to be observed for efficient integration?
- What is the strategic success potential?
- Which parameters should be covered by the business plan?
- How can I ensure that the focus and compliance of the organization are set out in the business plan?
- How much do different languages affect the process? Which strategies are useful in this particular sector?
- How should a management team be composed to achieve the best possible chances of building a successful business?
The first priority at conquering new fields is to orientate. Without a focused orientation the risk of making wrong decisions increases exponentially. We recommend cooperating with a trusted person. The person should be familiar with the market conditions, economic situation and a profound knowledge of the trade in order to evaluate the particular market and competition. A good command of the national language is a great advantage.
In negotiations with potential clients, cooperation partners or suppliers it’s a fundamental benefit to have somebody who is able to translate and who also understands the business targets.
Before starting the business, it’s highly suggested to gain an accurate impression through several meetings at the property. Furthermore, creating greater networks can simplify the process.
There are institutions in Germany and other countries, which are specialized in initiating business contacts and maintaining relationships. Certainly it’s not always easy to find a suitable organization that offers assistance in a helpful way.
The business plan plays a central role in establishing new business operations. In the first phase the following questions should be highlighted.
- Which economic success and which strategic targets should be reached by the investments?
- Which locations have the best conditions?
- Which structural requirements (management team, process organization, IT) are necessary?
- Time-table, mile-stones
- Is external support necessary? And if so, for how long?
- Which fiscal and legal conditions need to be observed? Which significant points deviate from the usual conditions? In which way are the payments on dividends taxed? How is the double-taxation agreement designed?
The original source of the article (in German):