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Preparing_For_Change_During_International_Expansion
| Preparing For Change During International Expansion
It was Charles Darwin who once wrote: “It’s not the strongest of
the species that survive, nor the most intelligent, but the one
most responsive to change”.
Business survival in the 21st century will depend on just how
much firms are willing and able to compete in the global
marketplace. Where at one time international expansion was a
“desirable” element for senior executives of mainly large
corporations, firms of every size can now no longer afford to
ignore the consequences of remaining a domestic player. They
realize that they must change, and accept the reality of
becoming an international player.
The big question now is not whether to go global, but when. And
that poses an enormous challenge for every Chief Executive,
President, Managing Director, Partner and Entrepreneur. The
clear message is – make steps to take your company into new
international markets, or risk erosion of your own domestic
market share by foreign competition and face the prospect of
diminishing competitive advantage.
Of course, companies have been responsive to this reality. Many
have succeeded, but many have also failed, realizing just how
complex international expansion can be. On the one hand, there
are those executives who fear just the thought of taking their
company overseas – they believe they are a liability to their
organization, and prefer to put off that task for another day,
conjuring up any number of valid reasons as to why the firm
should continue to concentrate on domestic business. And on the
other hand there is the overconfident executives who bullishly
take their firm into new markets, come what may, and with the
simple philosophy that what works back home will surely be a
recipe for success in new markets.
Both extremes clearly run the risk of failure – one through fear
and procrastination, and the other, even worse, through blind
arrogance. And in between these extremes there will be the
normal corporate politics, errors in judgment, long lead times
to market, failure to win contracts, spiraling costs, an “us
versus them” attitude between headquarters and local
subsidiaries, and so on.
Faced with this level of complexity, what elements form an
effective blueprint for ensuring business success in global
markets? With the increasing onus on small to mid-sized firms
especially to go global, what is the best recipe for efficient
and cost-effective international expansion? If the truth be
told, there is no single recipe for success. Panaceas abound,
and the collective effort in recent years by academics,
scholars, consultants and economic development agencies the
world over to provide solutions is there for all to see. The
problem is that very few executives have the time to really
internalize the wealth of information out there and apply that
information in their everyday working lives.
There are two principle ingredients for success in international
expansion. The ingredient is associated with the process of
entering new global markets, i.e. do I have a template in place
for making most efficient use of my existing and available
resources, and have I set realistic timeframes and budgets for
achieving profitability overseas, whatever my market entry
program?
But that’s not enough in itself. In fact, that’s only half the
battle. With globalization as a fact of business life, there is
an increasing emphasis on developing an effective international
mindset within companies. That means making sure you have an
international champion in your firm to build international
capabilities top down. It means ensuring that HR and personnel
strategies are in place to recruit and retain seasoned
internationalists, and making sure these candidates have the
proven international experience and linguistic capabilities they
say they do. It also means training and providing your staff
with incentives for overseas assignments. Above all, the
creation of an international mindset comes through a willingness
to learn, adapt and change.
The organizational learning curve is steep when expanding
overseas. But if your management team and your teams embrace
learning, adapting to new environments, recognizing that mindset
and process are two interdependent factors of success, you are
already responding well to change, and you have the basis for
overseas success.
Renarc has just published a booklet called 104 Practical
Considerations for International Success and can be downloaded
from its website at www.renarc.com The busy executive should
treat them as observations, a set of practical tips and a quick
reference guide for constant referral at every stage of the
international expansion process.
About the author:
Trevor J. O'Hara, is the founder and president of Renarc, a
consultancy that specializes in helping firms with international
expansion. O'Hara is a seasoned internationalist, having lived
and worked internationally for the last twenty years. Educated
in Dublin, Oxford, Paris and Berlin, and with fluency in German,
French and Spanish, O'Hara now speaks and writes internationally
on how to achieve global success.
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