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International Expansion

Most US companies start off understanding the US market with regions, cut-up throughout the US and regional organizations to cultivate those customers in those locations with local/regional people. As the opportunity arises to sell to a European multi-national company (like Siemens) or a Japanese multi-national company like Toshiba, or a Brazilian multi-national company like Emriare companies can take their successes with those US subsidiaries of these international companies to develop the countries further. 

Once they get a few (3-4) accounts in a particular country generation money and income with projects that are started in the US and are brought back to their HQs then companies can start hiring country managers and taking US-based employees who have lots of experience with the company and products and sending them to the country managers to build core-competencies of your company in those foreign companies.

It’s good to get legal representation and often sales agents to help make introductions in those countries as you’re building the specific country of focus. 

One of the companies that come to mind is Samsung, which had a consumer electronics organization located in the US that was focused on consumer electronics retailers (like Best Buy) to gather forecast information and send it back over to Korea. With the success of the forecasting system that we put in place, and the value of forecast accuracy improvements of 40% it created an easy sale back to Samsung HQ in Soul Korea to allow us to do worldwide-forecasting including cell phones, TVs, and other areas on the consumer-electronics area. From our success at Samsung, it drove LG and eventually drove Posco and other large Korean companies.

There have been many attempts to run the Eumea organization with a leader from Italy or the UK or Germany but my specific success was with after all these failures with a Dutch business executive who spoke 7 languages, and the Dutch people are known as some of the best business people in the world, getting along with all of the European businesses. 

In South America, there’s a large space with not that many companies outside of the MBA program. That’s Mexico, Brazil, Argentina. In developing South America those are the 3 major hubs you need to start with to build out your organization – with the same concept of a foreign multi-national by taking back the success to the home country.

Another strategy to help develop international expansion is to sign up 3rd party resellers who will invest the resources and marketing dollars for your products in their home country so that you get immediate reach as soon as possible. Sometimes it looks very attractive to get a 3rd party reseller to give you cash upfront for built-in discounts into their countries, but oftentimes a critical mistake they make is that the discounts they offer are so deep, often it’s not as successful as you selling and building it yourself. That’s typically not known up-front, but later down the road (hindsight).

Also, localizing your product for each country is often required so that your international pricing has to be more expensive. Typical companies run international pricing to 1.25-1.5% depending on the currency on the country, how far it is, etc. – and it could be higher in a different country. That’s also a mistake companies often make, not changing pricing for international sales.

 

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