By Adrian Johansen
In today’s world, many of the barriers that once existed in regards to conducting business abroad have been eliminated. In the past, companies might have considered penetrating the international market a longshot, but now, finding success as a truly global business doesn’t seem all that far fetched. Even so, there are many factors businesses need to consider before expanding their ventures overseas. Here are some tips to keep on mind while conducting international business:
When conducting business abroad, it’s very important to stay current. Current issues change on an almost daily basis, and international business professionals need to be quick to adapt and respond to local dynamics, as well as constantly changing global concerns in major geopolitical uncertainty. In fact, geopolitical uncertainty was named as one of the top concerns for global businessesby the University of Maryland, mainly due to pending free trade agreements, questionable access to the internet and beyond, and more. Additionally, leaders must be in-the-know about lesser publicized local issues as well, especially in the locations that are key to their international business ventures.
The Hongkiatcites an example showing the disastrous repercussions that stemmed from a failure to be current. In 2003, the Hong Kong Tourism Board used the slogan “Hong Kong will take your breath away.” Unfortunately, this occurred right at the time of the SARS outbreak, where shortness of breath is one of the major symptoms of SARS. Obviously, the campaign failed miserably. Here, one can see how a poorly timed campaign with no backup and zero flexibility to respond to local issues ended up in failure. As aptly stated by UMD, “A changing world requires flexible leadership.”
Be Aware of Cultural Differences
There are so many cultural nuances to be aware of when doing business abroad; it’s not enough to transpose a campaign used at home to another country. What works for one set of peoplemay not be the best route to success when it comes to another. This is especially important to consider during marketing campaigns and initiatives.
For instance, consider Procter & Gamble’s campaign in Japan: When the company started selling Pampers in Japan, it used the image of a stork delivering a baby on its packaging. While the image was successful in the US, it simply raised confusion within the Japanese market. P&G later found that stories of storks bringing babies have never been a part of Japanese folklore. Rather, Japanese folklore is centered around giant floating peaches bringing babies to parents. In this context, thoroughly researching cultural differences and knowing one’s audience is integral to success in all aspects of a business.
Embrace the Digital World
It is only thanks to the digital world that business can be so seamlessly conducted across borders. Technological advancements allow for real-time communications across the globe. In this day and age, embracing digitization is the only way forward.
The London-based company Diageois a great example of how digitization has helped its international ventures. Diageo is a premium beverages company with offices in 80 countries and a presence in about 180 markets. Its two main centers in Europe and North America serve as virtual hubs, providing faster service to employees in terms of processing paperwork, legal requirements and more, relevant to the location of the employees. Digitization allows employees to work remotely and easily collaborate. Thus, in case of a work emergency where local help cannot be quickly hired, or a team cannot be internationally relocated, telecommuting digitally makes for a viable option.
The ability to work from the cloud, fill and sign PDFs from virtually anywhere through the use of electronic signatures, and store information on universally accessible servers is integral to the success of the international business. Without these amenities, there would be an unnecessary lag in communications and even simple work processes would be stalled; causing more problems for any business that operated across borders.
Digital cargo tracking software is also making it easier than ever to keep track of your assets. When your company’s cargo trucks cross borders, you can easily find out where they are, and if there are any problems.
Ease of access, however, does come with its own set of risks. Storing and exchanging information through online methods puts data at the risk of being hacked into and stolen. With the recent rise in cybercrime across the world, those conducting international business must have adequate cybersecurity measures in place. Effective data management and safety is an absolute must for doing business abroad.
Be Wary When Traveling
For any business that functions globally, business travel will come up at some point or another. Whether one is setting up an office, hiring local talent, and closing deals with clients; in-person meetups that require international travel are essential to success. In an article on Forbes, Aimee Symington, CEO of Finesse Worldwide Inc. states that understanding greeting practices is key to making a good first impression in a foreign destination.
For instance, while a firm handshake and eye contact are appreciated in the U.S., this particular greeting may come across as too forward or even offensive in a different culture. “This greeting may be offensive to people in other countries of certain religions where there is no physical contact between men and women in business or those countries where a gentle handshake with averted eyes is best,” explains Symington. Some cultures may even expect a gift during the first meeting. In this way, it is important to keep local customs in mind when traveling.
Secondly, business travelers must be careful when it comes to international travel. Carrying money overseas, especially in the form of cash, has its own set of drawbacks. While cash is an extremely convenient form of payment, it can be easily be stolen and potentially never recovered. Local associates who are eager to show business travelers around may often offer sightseeing tours and activities. It is best practice to be wary of tourist traps such as bus tours, walking tours, and more, especially when carrying large amounts of money. Often, these can lead to unnecessary accidentsor theft, jeopardizing the true purpose of one’s trip: the business.
All this is not to say that one shouldn’t experience the local environment while traveling: rather, it is a suggestion to prudently and thoroughly research any tour operators, as well as be aware of one’s belongings when embarking upon any touristic experiences. For example, consider traveling with a credit card rather than cash as these make for a safer option while traveling overseas. Some credit card companies offer additional travel-related benefits that could be used to one’s advantage, like reward points, frequent flyer miles and more. Credit cards also offer more security as a stolen credit card can immediately be reported and shut down, with the option of disputing suspicious charges.
Conducting business internationally may yield high profits and return on investment, but the challenges in doing so must not be overlooked. There is always lots to consider when going global, but with the right strategies and awareness, today’s world allows for international success to be more easily realized.