Posted on : 2023-06-16 03:32:01
Article : Good evening, Friday Management TASK 246 -For global business expansion, call it culture shock or poor timing, either way some business plays look rosy on paper but in practice fail to stick
It's always interesting when massive companies with marketing firepower move into a new country and end up packing up their tents and going back home. Sometimes those companies succeed in other countries, but one just trips them up. Achieving global business success is dependent upon a large number of specific factors. However, a few common themes emerge with companies that attempt to operate beyond domestic borders and fail. For companies to succeed in a global marketplace, they need certain company strengths than align with the interests of foreign markets. One motive for companies to go beyond local boundaries is access to new capital and customers. Trying to keep up with competitors, some companies jump into foreign markets without a solid plan of action. They don't research the markets, don't assess differences in local versus global strategies and don't ponder the variance in costs in doing business globally. Companies sometimes have pulled out of global markets because they went in without a plan.
An inability to adapt to the needs of the local marketplace and culture also can lead to global failure and companies sometimes fail by not getting to know the markets they enter. Just because you plan and have a good solution doesn't mean all foreign markets will accept it. In some cases, people don't buy into certain brands or product concepts as consumers in other parts of the world. While the rewards can be great, the process of penetrating new markets with different native languages or cultural values can also be quite tricky.
For many companies, expanding internationally is a huge goal. To be able to grow a brand outside of the initial country opens up the opportunity for increasing sales by entering untapped markets who are looking for exactly what a company is selling. Companies who have successfully expanded internationally, the rewards are plentiful. For example, Lego which is a Danish company came to the United States in the 70s. Since their expansion, they have become one of the United States most beloved toys reaching nearly 10% of the toy market share in 2018. But not all international expansions go smoothly. If a business is not careful and doesn’t do their due diligence, their marketing messages may be lost in translation. Or, if they don’t take the time to incorporate some in-depth market research into their expansion strategies, they may end up losing money instead of making money.
Call it culture shock or call it poor timing, but either way, some business plays look rosy on paper but in practice fail to stick. Target isn’t the first company that saw immense success at home but got shunned abroad. As “Target’s” recent withdraw from the Canadian market showed that sometimes successful business can’t cut it in a foreign market. Target with its guns-blazing, self-proclaimed gift from the heavens approach to Canada probably felt right. Unfortunately after less than two years of blunders, billions of dollars lost and another six years to go before profitability, the brand announced it was ending its foray into Canada, liquidating 133 stores and laying off more than 17,000 employees.
Post your comments and professional experiences and outcomes of businesses expansion to new countries operations. Our solution post with few companies’ examples of new countries businesses expansion outcomes will be posted on our Good Morning Monday Management solution for TASK 246 on 19th June 2023.
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