Deciding whether (and how) to approach foreign markets in an informed manner
Offering one’s goods and services abroad can certainly be one of the key drivers of growth available to businesses. The advantages The benefits associated with this type of decision are undeniable, as well as numerous: entering new markets means being able to increase sales, reduce dependence on the domestic market, achieve economies of scale, manage the life cycle of one’s products more effectively, and strengthen one’s brand, to name but a few.
So why not set off down this path straight away, without a second thought? Simply because it is full of risks, which may well outweigh the advantages: Donald Trump has taught us that there are regulatory and legal barriers, not to mention cultural and linguistic risks (differences in consumer behaviour and communication), economic and financial risks (currency fluctuations, local inflation, etc.), the high initial costs and the greater organisational complexity that such a decision entails.
So what should we do? Take the plunge – guided by the animal spirits which guide every entrepreneur – either with the hope that everything will go well, or by being more cautious and staying within national borders because, after all, If things have always gone well this way, why change??
A very difficult question indeed. This article is aimed at entrepreneurs and managers who find themselves facing this dilemma worthy of Hamlet. Those who wish to read on will discover an approach that enables us to answer this difficult question as rationally as possible, without, however, presuming to eliminate every margin of error or risk. A journey that will touch on three key themes – marketing, organisation and people – the three pillars we must examine before deciding which direction to take. All that remains is to set off.
Marketing: choose where to go
The first step towards internationalisation is not to send a container across the border, but to work out where it makes sense to go. The world is a big place and, on paper, full of opportunities. But without sound criteria, you run the risk of being drawn to ‘trendy’ or seemingly easy markets, which then turn out to be traps.
Unfortunately (or fortunately, for us consultants), simply downloading a few free reports from the internet isn’t enough. You need to build aad hoc analysis which takes into account at least three dimensions. Themarket attractiveness, and therefore its size, growth trends, and the presence of local and international competitors (e.g. the cosmetics market in South Korea is very large and growing, but dominated by well-established local brands). Its accessibility: customs barriers, technical regulations, the existence of trade agreements with Italy or the EU (e.g. the CETA agreements between the EU and Canada lower barriers to entry for many product categories). Finally, its compatibility: the extent to which our product or service ‘resonates’ with the local market (a winery, for example, will face greater obstacles to selling in countries where there are cultural or religious restrictions on alcohol consumption than in Germany or the US).
Once one or more potentially interesting markets have been identified, it is essential check that there is interest in what we have to offer. Here, theory is no longer enough: we need some form of contact, whether direct or indirect. The infamous trade fairs They remain a good channel, but they are not the only one. There are other tools, which are often less expensive and more effective; let’s look at a few of them. There are the market research, which help us to understand whether potential buyers would be willing to buy what we sell, and at what price; there are the international B2B platforms, which enable you to make direct contact with buyers or distributors; there is the digital export, that is, targeted campaigns on LinkedIn or Google Ads in the target countries, designed to generate leads, which are then followed up with one-to-one calls; there are also the Temporary Export Manager, experienced professionals who already know the markets and can open the right doors.
The first step in this ideal process is therefore based on a fairly simple principle: before investing heavily, one must seek (and, hopefully, find) concrete evidence that there is genuine and substantial demand. If a seemingly ideal market is in fact a minefield, it is better to realise this early on and pull out in time.
The organisation: If the car isn’t in working order, the journey won’t go ahead
Once the market has been chosen and the application approved, it’s time to look at inside the house. Are we really ready to export? This is perhaps the most underestimated question of all.
Exporting doesn’t simply mean adding an English label to the products we offer; it means putting the entire organisational structure under pressure. We therefore need a proper business health check, just as, before setting off on a long journey, we need to check that our car is in good working order.
Here are a few points to bear in mind. Production and logistics: Are we able to meet a potentially higher level of demand? Is the warehouse large enough? Can our logistics team handle international shipments? Sales and customer care: Do we have sales and customer care staff who can communicate and provide support in other languages or across different time zones? Administration: Are technical data sheets, price lists and marketing materials available in the languages of the target markets? Are we able to handle the administrative procedures associated with exporting correctly, such as international payment methods, invoicing in foreign currencies, and the handling of VAT and customs documentation? Product/service: Does our product/service comply with local regulations, formats, preferences and legally required certifications, or does it need to be adapted?
Generally speaking, beyond the practical implications for individual organisational functions, it is worth considering that exporting – and even more so, internationalising in the broadest sense of the term – requires a complete rethink of the entire organisation, from processes and information flows to responsibilities, and sometimes even governance. A clear model is needed to determine who does what, when and using which tools; otherwise, every new overseas customer risks causing more chaos than revenue.
The people: the real driving force that enables us to reach our destination
No strategy, no reorganisation, no marketing plan can succeed unless there is the right people with the right attitude.
Exporting is not merely a ‘technical’ matter; it is, first and foremost, a human process. And it requires very specific skills: language skills, of course; intercultural skills, to manage clients and partners from different cultural backgrounds; international business skills (for example, knowing how to negotiate a contract, define an Incoterm, and manage the timing and risks of a shipment); digital skills, which are now essential for lead generation; management skills, because breaking into new markets often involves project management.
For each stage described so far – market analysis, review of the organisation and processes, and any necessary adjustments to the product or service offering – it is therefore necessary to ask oneself What skills are needed to deal with this?. If we already have all these skills in-house, we can get started. If we don’t have them all (which is far more likely), we need to pause for a moment. In this case, there are many options: we can choose to develop our own skills, recruit new staff, or turn to external partners (specialist consultants, temporary employment agencies, etc.).
Then there is an aspect that is often overlooked but is fundamental: theteam engagement. Internationalisation is a change that affects the balance within a company; if it is not seen as a shared project but as a measure imposed from above, it risks being resisted, even unconsciously. People need to feel that they are part of the journey, that they have a role to play, and that they can contribute; otherwise, internationalisation risks being perceived as an ‘intrusion’, a disruption to the daily routine. And this, more than any external obstacle, can bring everything to a standstill, undoing all the efforts made previously.
Conclusions: yes to exports, but with the right understanding
Exporting is certainly not an easy choice. It is a challenge that can bring great opportunities, but also new problems. Anyone who thinks it is enough simply to ‘give it a go’ or rely on a contact made by chance at a trade fair is exposing themselves to significant risks, both financial and reputational.
But we have seen that, with the right approach, it is possible to reduce uncertainty and increase the chances of success. Of course There is no one-size-fits-all magic formula, but there is an approach, and it is this approach that we have sought to share in these pages. It is based on analysis, planning and an awareness of one’s own limitations and strengths. It is this approach that makes the real difference between those who export successfully and those who remain within their own borders..
So let’s get back to the title: To export, or not to export? As always, the answer is ‘it depends’. It depends on the market, it depends on the organisation, it depends on the people. Having read this article, we hope that whatever answer the reader gives to this question will not be a spur-of-the-moment decision, but a conscious choice.
Nicola Urbino – Senior Consultant at Nomesis
