Updated: Oct 23, 2020
In this introductory article, the focus lies on the operational plan of a company who want to pierce the borders and provide their products or services internationally to the local of the chosen country.
There are several factors to consider before settling your products or services in another country and it's best to conduct a macro analysis (PESTLE) and microanalysis (Porter's five value chain) before considering expanding your operation in the selected country.
You will need to do international market research first and with the finding compose an operation plan which is the process of linking strategic goals and objectives to tactical goals and objectives and ideally should describe your milestone conditions for success and explain how and what portion of the strategic plan will be put in place during a given operating period.
Several kinds of research will need to be conducted such as a Hofsted Insight analysis of the country of choice to gauge how your company can fair overseas, the laws and regulations of that country which applies to overseas trading, language barrier, custom and culture of the country as most countries have institutional traditions such as religion, climate, ethnic homogeneity and legal origin that are less likely to change over time.
Example of a Hofsted Insight Analysis
Here an example of a Hofsted insight analysis may look like once you research your country of choice my example countries are the Philippines and America the company ETC venues started by Sally Wilton in 1992 is a multi-million-pound training company providing independent meeting training room and event space mainly in South-London, experienced exponential growth of her venture after founding a gap in the hospitality industry market and found that current provision was sub-standard.
The country of choice presents itself as a good fit for this paper as etc.venues planned to expand to the USA and research suggest that the Philippine and the USA are respectively economically viable countries to form a niche in the hospitality market for etc.venues as hospitality is sought after in both countries.
As per Hofsted insight (2018) the US has a high degree of mobility and are accustomed to conducting business and interact with other people they do not know, hence confident about approaching prospective counterpart to obtain information. Knowing that Britain has the same masculinity driven individualism which is an outline in respect of comparative score of uncertainty avoidance, however, the US has a higher score than the British and the same drive is found in both society, nevertheless, the Americans are more upfront whereas the British are cautious and will more take you by surprise but are not reluctant to a new concept, innovative products, and have a willingness to try something new or different whether be in business practices, technology or food.
In contrast, the Philippines is a collective society hence committed to member groups, whether family, extended family or extended relationship they foster trust and strong relationship where everyone takes responsibility to a fellow member but tend to punish if rules are broken, name and shame culture prevail. The Philippines considered a restrained society with low score dimension orientation tends to cynicism and pessimism and does not emphases on leisure time and control gratification and desire.
Yet, opportunity gain includes growth in the tourism industry, business developments, the endurance of institutional characteristics provides the foundation for cultural stability. Relatively speaking, uncertainty avoidance and masculinity mainly reflect some rather stable institutional traditions, such as language, religion, climate, ethnic homogeneity, and legal origin are less likely to change over time.
Considering international relationship
The country is to be taken in consideration to ensure international relationship run smoothly and that you do not upset the local who may have resentment over the competition for market space in their own country or be really happy to see you as there is a lack of products or services you provide in that country and they welcome you as there is a strong demand and you can supply that demand.
There is benefit in conducting Porter's five value chain analysis supporting activities and looking at the following criteria: organisation input, human resources, the technology available, purchasing, the cost and your primary activities drawing on the 4ps and 7ps of the marketing mix which are Price, Product, Place, Promotion, People, Process, and Physical Evidence.
For a true opportunity for internationalisation of your company in term of Global strategy, an Ansoff Growth Matrix is necessary as it may help you decide where your growth lie depending if your market lay in an existing market or new market and your product is a new product or a product development also diversification need to be considered.
A 12c table with your finding should be inserted in your operation plan as well which shows at a glance where you should expand bases on your finding. I have put an example below of two countries of my choice for this article and made a comparison should you want to expand let us say to the Philippines or the United States the example company is ETC Venues (hospitality industry).
The criterion of a 12c table is currency, communication, contractual framework, PESTLE Analysis (mini), Caveat, Consumption, Commitment, Culture, Choice, Capacity to pay, Concentration. It's a shame my picture of my 12c table does not show that good this is due to the fact that I have completed my 12c table example in word format for this article then PDF it and then converted it in a JPG format resulting in a picture but the font has gone so small in the process and if enlarge no resolution at all. Even the zoom facility of your browser would not fix the problem please accept my sincere apology for this poor display.
The 12c table picture above shows what expansion research looks like and help you decide further step to be taken as you can insert your finding in an Ansoff matrix and developed a more thorough PESTLE analysis and an international SWOT analysis to depict the strength, weaknesses, opportunity and threat your company can face. I have placed below an example of an international SWOT analysis for you to see what you can put in each criterion for your company expansion oversea.
Bear in mind that for online business the international SWOT is slightly different as infrastructure, development of infrastructure and lack of infrastructure is not needed including the displacement of resident and pollution, however, the other bulleted points in the international SWOT analysis have to be taken in consideration as well as the Ansoff matrix and 12c table are applicable for online business and should be used in your international operation plan for online penetration.
In both situation either be an online business or brick and mortar business which considers an expansion overseas you should ensure that your marketing literature narrative is in the language of the country of choice and ensure that your price is in the currency used by that country including your services and product name is changed to the country language. For your website, the pages will need to be translated into the language of the country of choice.
All the above should be included in your global operation plan which should contain your global strategy and tactic, goals, objectives, and milestone condition for success. With the latter, your strategy should be solid and well thought out ready for your expansion as you will be equipped with the information needed to consider your move and well prepare.
You will need to know what the government requires, how to proceed, who to contact and be made aware of the potential barriers, how to overcome them and most importantly the custom and culture of the country of choice to ensure you are not making a faux pas and land in hot water just because you did not do your homework and came unprepared.
Be proactive in your dealing and ensure that you are in control and fully aware of what you want to achieve when venturing overseas to provide your product or service ensure you do thorough researches as you will be more likely to succeed as opposed to reactive to events as you will be more likely to fail if no researches are conducted and go ahead with minimal planning and knowledge.
Hence is mighty important to know beforehand and get prepare, well informed so you put your best foot forward and set yourself for success. Make sure you record your milestone for success in your international operation plan.
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