The 6 Do’s of Strategic International Business Planning

The need for a company to expand internationally is typically derived from growth expectations or characteristics of the (niche) product itself but can also be a result of the pull-effects from a specific region.

Global markets have become tighter and competition ever so much fiercer which have
lead companies to carefully analyze and project intended launches. This has further triggered entry of new strategies like the Blue Ocean Strategy to provide tools for creating uncontested new market space that expand conventional markets. Young and small organizations may well find their best opportunities in such environments.

Taking a business international is, nevertheless, a major strategic action for any company. Such a decision must fit within the overall strategic intent of the company, its business idea and corporate structure as well as the ideology of the management and owners. It is politely argued that businesses carefully evaluate the following 6 Do’s of Strategic International Business Planning:

1. DEFINE – What is the overall strategic intent of the company and why has this been chosen? is it perhaps to Think Big / Think Big over time / Think low risk / Think Niche / Think Strategic Partnership / Think OEM / Think own organisation or something else.

2. DEFINE – Would specific markets offer a unique market opportunity? Explain why and in what way. Alternatively consider would generating a new market be the right thing to do?

3. DEFINE – Would you be able to reach out for an ideal strategic partner that could commit strongly or are you on our own?

4. DEFINE – Based on earlier experience, recommendations or market propositions are you prone to follow any given modus operandi? What is our ideal operational choice and why?

5. DEFINE – the cost structure of our business. What policies do you have regarding social media, production, customer service, product development or adjustment etc.

6. DEFINE – Does your business idea come with a proposition that can raise venture capital, private investment or other external financing for a more rapid market penetration? Alternatively, do you want to grow organically with a 100% control at this point of time?

An evaluation of the prevailing strategic intent and market propositions will offer alternative scenarios for you to work on. You may want to consider e.g.:

– A bridge-head strategy with strict roll-out plans on a larger market defined as lucrative for your purposes. Such strategy can be based on own corporate operations in addition to a strategic partnership.

– A smaller market that might offer a unique market opportunity (with a relaxed cost structure).

– A market that offer suitable conditions for market testing and obtaining of a proof of concept for further commercialization.

Analyzing our prevailing strategic event and market propositions will give us different scenarios including budget frameworks, cash flows and financial requirements to consider.

3 Way to Tell If Your Business Ready To Compete Globally

The imagery of a “fish out of water” is often used to describe a situation in which we feel uncomfortable.

When it comes to doing business globally, many businesses are impaired by acting more like a fish within water.

That is because the fish in the water does not ever really think about its environment. It is in water: it is comfortable, the water works for the fish, and the fish is happy in the water. What is there to think about?

But sooner or later, the fish, or in this case our business, wants to move to another environment to court the business there.

As a business, we pack our flippers, don our wetsuit and assume that when we get there, we will again be swimming in water just like the safe environment that we left.

We don’t realize that the water is different. It may be a much larger pool than the fishbowl we swam comfortably in at home. It may be murky water, or a different color of water, or a water filled with predators that want to eat fish.

Worse still, we may arrive wearing flippers and discover that the fish we came to visit and get business from doesn’t swim in water at all. It has abandoned its gills and operates on a land environment.

If we are not ready and able to function in the different environment or culture that we find our foreign business operating in, we will fail.

More and more businesses must compete in a global, multi cultural marketplace and that can mean negotiating new deals in unfamiliar places, setting up branch offices or plants in cultures completely different from our home base, and learning what is important to a whole new group of customers.

If we approach this challenge by assuming that the worlds we will expand to will be identical to the worlds we work in now, there will be disappointment when things do not work out as planned.

Here are three things to think about when considering competing globally:

1. Are you ready for culture shock? When you pack flippers and discover that your foreign business target walks on land, that’s how you experience culture shock. It happens because we all have a na├»ve tendency to think that everyone sees the world the same way we do and does things the same way we do.

2. Can you suspend your judgment calls? It is difficult for many business people to refrain from judging other people’s beliefs and behaviors when they differ from their own. Instead of judging and assuming that your cultural beliefs and protocols are superior, invest your efforts into developing your listening skills and learning about the other culture to try and understand it.

3. Can you control your responses by questioning yourself? Inevitably, you will come across a culture that is so different from your own that you have an extremely negative response to it. You can’t help it, and it begins to negatively impact your responses. When you sense that is happening, ask yourself if you have taken sufficient time to ask and learn about the country’s cultural values and beliefs that are behind the practices you find disagreeable. Ask how much of your reaction is tied to your cultural beliefs about what is right and wrong. Question whether these practices or values that you are having trouble comprehending are harming you or others. Finally, ask if the people within the culture believe a practice is harmful, or are they okay with the practice or belief.

When you conduct business daily in the same place and the same way, you stop noticing the water. Doing business on a global scale means that you will be called upon to get used to everything from tidal waves to deserts and they will command your attention. Your intercultural communication skills will be put to the test in these new environments.

Building a Global Business: Understanding Cultural Differences Between You and New Business Partners

In its own way, culture is the ultimate magic mirror. We view the world, with its colors and customs and modes of behavior, but our culture creates a lens over our eyes that somehow changes it, and when we interpret what we see, it is through the lens of what we know.

Businesses lining up to take full advantage of the global multicultural marketplace need to look past their own cultural lens.

They must find ways to allow their representatives to better interpret the new cultures they are viewing and build bridges between their own cultural lens through which they see the world and the lens through which they act.

We learn that our culture is a set of glasses through which we view the world, and that more we learn and the more we see, the more we realize we all have a different prescription.

When you live by the ocean, for example, a beautiful mountain may attract your attention as an awesome feat of nature, but it bears no special meaning to you. But if you grew up with the Quechua people of the Andes Mountains in South America, you would see the mountain as something with its own special spirit, called an “apu.”

The apu mountain spirit would be something that you feel protected by.

If the person who lived by the ocean was hired by a company to go to the Andes Mountains and build a road through the mountains, you can quickly imagine how they could alienate the local people if they had no idea of the existence of the apu mountain spirit.

This is how cross-cultural problems start for many businesses. They do a superficial survey of the country where they want to do business, summon a person who is trained in the language and agreeable to trying the food, and send them off as if they are prepared for negotiating new partnerships there.

Some parts of culture can be seen, such as the natural environment, and other parts are hidden, like the human values and beliefs.

Too many companies focus only on the obvious. However, the problems and miscommunications are more likely to emerge from those customs and beliefs that are not obvious.

To build bridges into other cultures, it helps to have an excellent guide who can make you aware of the nuances between how you interpret what you see and how your potential new business partner interprets it.

No one cultural training program can ever prepare a person to be aware of all the subtle differences between their own environment and that of another. That is why principles are needed to help build bridges for intercultural communication success. The best way to prepare your staff is to teach them the means to see through different lenses, absorb without judging, and accept without insult.

4 Tips for Excellent Business Etiquette in Social Interactions

For the unfamiliar, Jane Austen’s world of ‘Pride & Prejudice’ is a complex ecosystem of social appropriateness set within the time context of a Victorian era. Communication is very particular, almost rehearsed and follows a certain set of protocols. Men posture themselves a certain way while every lady dons her best-laced clothes or hand fan. Spoons don’t clink against the cup while stirring, and introductions, regardless of however informal the event, are made as formally as possible. While this sense of English appropriateness might drive some cultures crazy, we all understand the importance of some degree of basic etiquette. There are certain unwritten rules that exist within a social context that require a fair amount of politeness, respect and sensitivity. These protocols for behavior can look different in an informal context but are a little better defined within a business environment. In this article we will examine a few such protocols:

    1. Formal introductions:While casual settings call for an intro that can be as simple as a “Hi”, introductions made within a business or professional environment, require a proper “hello” and a polite handshake. It is also best to introduce someone with their full name. If you are introducing yourself and happen to have a fairly complicated first name, it is considered appropriate to introduce yourself with your proper name and then tell the person what they can call you, be it a shorter form of your name or a nickname. This avoids the awkward scenario of the person forgetting your name because of it’s complexity.
    1. Standing up to meet someone: Most eastern cultures naturally understand the importance of standing up to meet or greet someone. Regardless of the cultural context, standing up to be introduced to someone is considered respectful and communicates an appropriate acknowledgement of his or her presence. If you are unable to standup for whatever reason, leaning forward at least indicates an intention that you would stand up if you could.
    1. Thank you: After specific meetings such as job interviews, it is always appropriate to send individual thank you cards to the people who were involved in the interview process. The appropriate window of time to do this would be within 24 hours of the meeting. Keep in mind that regular mail can take time and when possible it may be better to thank someone via email. The thank you message itself must be simple – thanking them for their time and consideration of your application. Unnecessary words of groveling endearment are inappropriate and may be taken as an underhanded attempt at gaining favor.
  1. Chivalry only when necessary: While it is considered thoroughly proper for a man to open the door or pull a chair for a woman under most circumstances, in the context of a professional setting, like a lunch meeting, this type of chivalry is unnecessary. While most societies consider men and women equal, it is an unspoken rule that this aspect must be accentuated within a professional environment. In such a context, actually displaying chivalry might be considered as awkwardly unprofessional.

Business Etiquette Training is an important aspect of corporate training that equips individuals to acquire the necessary Business Etiquette for productive relationships with peers.

MMM Training Solutions conducts soft skills training, executive coaching and leadership training programs for corporates in India and abroad. We are experts in the field of Business Etiquette Training. Our training programs are customised based on the objectives, experience of the target audience and the type of industry. We have been in business since 2005 and some of our clients include Daimler, Standard Chartered Bank, Microsoft, Novartis, Cipla, Deloitte, Caterpillar and many more. Pramila Mathew, Owner and Founder of MMM, has a dual background in Business and Psychology and has significant work experience in both India and USA. Please visit our website MMMTS.COM to know more about our programs and our trainers.

How to Export Products Overseas

Is exporting products overseas really so difficult?

Did you know? According to Businessweek, almost 46% of businesses abroad don’t export their products to foreign markets because they don’t know how? Considering the ever growing buying capacity seen in some foreign markets, this is a disappointing fact. But the truth is, if you are well-prepared, motivated, and confident, exporting your products to overseas businesses is not so difficult. Here we will look at 5 elements you may consider to help you get started exporting products.

CONNECTING WITH CHINESE CUSTOMERS

Visiting trade fairs is an excellent way to introduce your business and products to other business abroad. Thousands of business representatives and people attend trade fairs providing excellent opportunities and fast networking. You can meet and talk to many business representatives and immediately begin forming relationships and trading company information. The time and effort in attending these trade fairs, we believe is an investment. The majority of trade fairs in China are held close to large cities like Shanghai, Guangzhou, and Beijing. Thus, if you are worried about the language difference or transportation, you can take comfort in the fact that most business people in these cities will be able to communicate to you in English and transportation options are readily available. Some businessmen take up the practice of booking a flight and hotel to Hong Kong and taking a train to Guangzhou or one of the large cities where the trade fair is held. (As more planes leave and enter Hong Kong, the opportunity to shop for cheaper flights is increased.) Finally, don’t forget to apply for a visa at least one month prior to your departure.

However, if visiting a trade fair is not an option for you and your businesses, a second option is connecting to businesses similar to your own and seeing if they have any recommended connections or leads overseas. It might take time to find some overseas connections this way, however, if you are committed, it’s very possible to find some overseas buyers through networking.

CONTACTING A DISTRIBUTOR

Some companies recommend using a distributor to help with the exporting process. Although this option comes with a price, it can be a good option for businesses new to the exporting process. (It’s also a useful method for companies who may not have the time or people designated to handling the exporting side of your business.) A distributor will know the overseas market well and can offer advice and assistance on customers clearance, packaging and documentations, importing regulations, and export certifications needed (it varies from country to country). Most distributors offer help in many different areas including marketing guidelines, trademark regulations, etc. Even if you just use the help of a distributor to help you get started, the fee you pay the distributor could be an investment.

CHINA’S CCC MARK

To export most products into China, your products must comply with the standards and regulations outlined in China’s Compulsory Certification (CCC). This certification is issued by China’s Certification and Accreditation Administration of China (CNCA)

There are 21 product categories that require the CCC mark.

– Electrical wires and cables.
– Switches for circuits, Installation protective and connection devices.
– Low-voltage Electrical Apparatus.
– Small Power motors.
– Electric tools.
– Welding machines.
– Household and similar electrical appliances.
– Audio and video apparatus.
– Information technology equipment.
– Lighting apparatus.
– Telecommunication terminal equipment.
– Motor vehicles and safety parts.
– Motor vehicle tires.
– Safety Glasses.
– Agricultural Machinery.
– Latex Products.
– Medical Devices.
– Fire Fighting Equipment.
– Detectors for Intruder Alarm Systems.
– Wireless Local Area Network (WLAN) systems.
– Toys.

To get the CCC mark your company must go through a process. First, there will be an inspection of your factory/company. Second, there will be a follow-up inspection of your enterprise. Finally, your products will be sent to authorization laboratories in China. No matter where your business is located, you must receive the CCC-mark if your products will be marketed in China. If you export products that do not have the CCC-mark, your products will be held-up in customers and perhaps seized or destroyed.

TRADEMARK REGISTRATION

Finally, we strongly recommend you register your trademark in China before you start exporting your products. China’s trademark registry process is based on first-come-first-serve standards. Thus, it’s recommended you to register your trademark before you ship your goods. It’s not required that you register your trademark, however, it’s recommended as this can protect your product and company’s name/reputation.

Is the market for your product flooded with competitors? Every year, increasing numbers of businesses are connecting to the Internet. Your ability to form relationships with businesses and market your products to vastly different markets can offer your company new opportunities you never thought possible. Depending on your product and country of origin, demand for your product could be higher; the demand for foreign products are often greater in other countries. Furthermore, the market for your product may not have so many competitors overseas.

The Effects of Globalization on Both Accounting Profession and Education

Innovations in technology has catapulted the financial district into a global market. Globalization has had a large influence on the way businesses conduct business. Firms are not only responsible for being privy to information involving consumers in their own backyard but also understanding consumer culture as well as economic, political, and legal structures that exist in other countries. Due to the influence globalization has had on businesses, it has changed the expectations that are required of incoming business students and their education. More specifically, accounting students are being impacted by the changes globalization has influenced the market with. These students are challenged more particularly throughout their undergraduate years to understand not only the rules and regulations of GAAP (General Accepted Accounting Principles) but also the standards set forth by the IFRS (International Financial Reporting Standards). Within the accounting sphere, the primary focus has been on external reporting which involve the preparation of financial statements and auditing. However, due to the ever changing world of the global market, future accountants are required to possess perspectives that influence both external and internal reporting. The market will continue to change due to the fast paced journey of information making globalization an important factor in accounting education.

Businesses in the United States have largely adopted GAAP which is a guide to how business are to construct financial information to produce statements. GAAP has been useful in the last couple of years because it facilitates the way businesses in the U.S. communicate with each other. However, in the global environment, GAAP proves to be burdensome for most companies. Overseas, they have adopted IFRS which is another guide to producing financial information which aids foreign companies with communicate amongst each other. Most countries use IFRS as a basis for the way business transactions are conducted. Since most of the world is using IFRS as the standard it leaves the U.S. with the tedious task of having to incorporate two different principles to conduct business. In the article, “How Globalization is Affecting U.S. Accountants” by Bruce Pounder, Pounder states that “U.S. accountants will find themselves at a severe disadvantage to the many foreign accounting professionals who have already mastered international accounting standards and who are therefore much better-positioned to take advantage of rapidly growing career opportunities in China, India, and other emerging economies” (Pounder, 2007, p. 3). He then goes on to predict that as GAAP becomes more overshadowed by IFRS, U.S. accountants will find their skills and knowledge becoming obsolete. Therefore, IFRS has become more integrated into the accounting curriculum for education. Students are required to understand not only GAAP but IFRS and the changes that occur when working with both. By involving IFRS into the learning process, students will be prepared to later take the CPA Exam which has recently been updated to include information about IFRS in the Financial Accounting and Reporting (FAR) section. Students are becoming better equipped with skills and information that will make them more marketable and efficient in the globalized business environment.

In the U.S. economy, a thriving financial sector is usually supported by a strong public accounting and auditing firms. Therefore, the focus over recent years has been to ensure that accountants excel at compiling information involving a company’s assets, liabilities, equity, investments, etc. However, due to globalization, external accounting practices aren’t as valued if internal practices are not also implicated. Internal practices are important because it shapes the way businesses reach their customers in the foreign market. Authors Paul Danos and Richard L. Measelle stated in their article, “Globalization of the Business Environment: Implications for Accounting Profession and Business Education”, that “In a competitive global market place, the internal accountant must be sensitive to what drives the costs of products and he/she must work with production and marketing people to rationalize all cost accounting procedures” (Danos, 1990, p. 79). The responsibilities of the internal accountant is becoming more critical to the success of businesses. For a business wanting to expand into foreign territory, cost accounting is used to accurately develop product price information, location of manufacturing facilities, picking suppliers, etc. Due to these factors, internal accountants have to be familiar with regulations across borders, tax treatments, and currency conversion costs. When it comes to public accounting, auditors must be heavily versed in global accounting standards because “the world’s economies are becoming increasingly interdependent… ” (Needles, 2010, p. 602) according to Belverd E. Needles Jr. author of the article “Accounting Education: The Impact of Globalization”. The author goes on to encourage global standards for auditors because it strengthens their practices by only having to be familiar with those regulations. In order to be well versed in the global market, accounting students are advised to take courses specifically designed to analyze different cultures, languages, and political factors that influence societies.

Globalization has influenced many changes that have taken place in both the accounting profession and education. Students are now exposed to problems that occur in the global market and how to go about solving them. Not only are these students expected to understand all the mathematics and jargon involved with the business world, but they are also expected to have a good sense of foreign consumer culture as well as the regulations bound to each country. Implemented with these skills, students will be able to excel in the new business world.

References

Danos, P., & Measelle, R. L. (1990). Globalization of the Business Environment: Implications for the Accounting Profession and Business Education. Human Resource Management, 29(1), 77-84
Needles, B. E. (2010). Accounting Education: The Impact of Globalization. Accounting Education, 19(6), 601-605. doi: 10.1080/09639284.2010.501578
Pounder, B. (2007). How Globalization is Affecting U.S. Accountants. Montvale: Institute of Management Accountants.