Selling abroad is not as easy as it sounds. Aside from obvious challenges in terms of cost, supply and travel, doing business internationally requires planning. Sure, if you are fortunate enough to have a strong relationship abroad, your international efforts may quickly bear fruit. But what if you are starting from zero or close to zero? International business requires that you do your homework and prepare to step out of your comfort zone. Given the post-Brexit headwinds affecting UK business, it is a topic where we see increasing challenges. So, why not take 5 minutes to read about international business and adapting to the local cultural code?
International business
Selling to, supplying into, operating in or living in another country has its challenges. It is also something that the UK has historically lagged behind with. According to His Majesty’s Government, about 11% of UK businesses export and 9% of SMEs export. The UK ranks 7th in the world in terms of exports of goods and services, though some way behind China, USA and Germany. We are also heavily reliant on the services, financial services and travel sectors. Since only 6-7% of UK students either study, work or volunteer overseas, of which around half go to the USA, it may explain some of the shortfall. In many countries, it is not uncommon to send your children abroad to study a second degree or to pursue a Masters, PhD or MBA, boosting their credentials for international business.
Rather strikingly, the UK is (at the time of writing) the third largest aviation market by traffic. However, it was only 2 years ago that research found that only 15% of people take 70% of flights. Additionally, 57% of the population do not fly out of the UK at all.
Selling abroad
We are in no way going to lecture you about sales techniques, but it does require a different approach outside of your domestic market. If you consider for a moment the information that we take for granted, such as geography, industry knowledge and local customs, we may have less knowledge in another market. Additionally, it goes without saying that language is a barrier for many Britons with some research suggesting that only 6% of us can speak another language proficiently. Furthermore, around 16% of UK aviation traffic is to Spain, 15% within the UK, 7% to the USA (US English), 5% to Ireland and 5% to Italy. That translates to around 48% of flights to a limited number of destinations, cultures and languages.
Those exporting goods, which is a small proportion of total exports, have to contend with post-Brexit arrangements. This has complicated and, in some cases, increased the cost of exporting overseas. Whilst currency and exchange rate fluctuations were already a challenge, exporting is harder than it has been for decades. If we flip the perspective to the buyer, they are buying from a country with a different currency, greater bureaucracy than within a free trade area and, in general, less awareness of international business, less command of foreign languages and less familiarity with cultural norms.
Cultural code for international business
To support UK businesses abroad, it helps to understand the expectations, values, norms and conventions of another country. Whether this is a set of images, stereotypes or rules of engagement with another culture, it helps to get off on the right foot. We must always remember that English is not the most common native language on Earth (that honour goes to 1.2bn Chinese Mandarin speakers) and that our culture is no better than another. As a result, we should aim to research, respect and reflect the norms and conventions of other cultures. The better our understanding of the expectations, values and social constructs of our potential business partners or customers, the more likely we are to succeed. If we take the UK approach to social interactions and business, we may offend other cultures whose norms are different.
Although there is increasing alignment in some elements of occidental cultures, this should not be taken for granted. For example, sustainability may be highly important to your culture but that doesn’t make it the top priority to another. Where you pride yourselves on transparency, another may keep their cards very close to their chest. We are simplifying of course, but expectations differ in many cultures.
Market research and analysis
Ideally, a good starting point for any expansion into new markets is to use a framework to agree your strategic goals. Many businesses engage in a strategic planning exercise to identify the optimum strategic choices and how to achieve them. Armed with research into potential new markets, leveraging your existing strengths to capitalise on opportunities is easier. You many even tailor your products or services to different markets, once you have the appropriate insights.
Understanding the cultural aspects of a new market is critical to the success of your expansion. A popular example comes from Gillette, the shaving brand. They had little to no success in India, though the brand polled well with consumers. To address the issue, they had to understand Indian culture and typical lifestyles of would-be consumers. The result was a new approach with new messaging, new pricing and variations in product design. Despite entering the market in 1984, sales were largely flat from 2004. Substantial research led to the release of Gillette Guard in 2010, touted as the most significant product launch in their history, tailored to the needs of local Indian men. This came with a new business model to produce low-cost, innovative products tailored to target preferences.
Finding what works for you and your partners
Not every product or service launch works in every country, though we may reduce the risk of a failed launch. Sometimes, it will work in some countries and not in others. Sometimes, it needs a little extra research, planning and change to enable you to capitalise on the opportunity. Here at Think Beyond, we offer to support your expansion with research services, including market data, industry analysis, market sizing and neuroscientific cultural codes. We also support strategic planning exercises to get you to where you want to be.
If you would like to find out more, why not send us your inquiry or pop a few details into our website to request an introduction.
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Finally, why not check out two related articles on scoping out your biggest opportunities and planning strategies for the future.