global market entry - getting it right

Thinkglobalgrowth.com

Global Market Entry: Getting it Right

Keith Warburton – CEO TGG



Key Issues Addressed

• TGG – what we do• Market entry mistakes• Focus on strategy• Appropriate research• Venture validate each stage• Benchmark your cost base• Be aware of local business culture • Hire the right people• Questions


Think Global Growth Ltd

• We are dedicated to helping clients work more effectively across the boundaries of geography, market conditions and culture.

• We focus on:– Global Market Entry (outbound & inbound)– Global Supply Chain– Global Marketing Solutions– Global Culture– Global Outsourcing


Market Entry Mistakes• There are a number of common pitfalls that

companies fall into when they enter new markets• These mistakes often come about as a result of

organisations acting in a reactive manner to specific business developments rather than taking a more strategic, long-term approach to ‘global’

• This presentation is intended to signpost the key areas you need to focus on if you want to avoid the most common mistakes


Focus on global strategy

• Take a step back before expanding your international footprint

• Be strategic; not reactive• Analyse your capacity for international expansion• Is the time right for you?• Where do you start? Which countries?• Do you have the management bandwidth and

knowledge ?• Take a long term view of ‘international’


Do the appropriate research• Each global market is different• Do quality research on each market separately• Research should be more than desk-based research• You need expert local partners on your side (don’t just

believe prospective partners or agents)• Never chose a distributor from a short-list of one• Do not sign pan-India/China/Brazil etc. distributor

agreements• Why would you want to JV? It should usually be the

last option


Structuring your entry vehicle

• This is critical• Do not try to ‘wing it’ without taking good advice• If you think you can risk it…… don’t because it will cost

you lots of money in the long run• Do you need to set up a permanent establishment

from day one?• Is the best market entry vehicle through a distributor

network?• You need to get this right from day minus one


Venture validate each stage• Entering a new global market always entails risk• It is best to take a staged approach to every new

market venture• Set yourselves targets and milestones as

validation points• Only invest more resource when your are

convinced the previous stage has been a success• Do not be afraid to admit the plan is not working

and re-assess – or event pull out completely


Benchmark your cost base• If you don’t start with a cost base which is

appropriate to local market conditions, your business will not succeed

• Local competition will be working at the lowest viable local cost base

• Benchmark every cost before committing to anything

• Market share is important; profitability is more important


Local business culture• This is not a soft issue – it is as critical as the tax and

structuring issues• Be aware that you enter any new market with

prejudices based on your own cultural background• Cultural differences are much deeper than issues such

as handing over cards in an appropriate way• Most of the world puts relationships before business

and relationship building is therefore key• In any new market you just don’t know what you don’t

know


Hire the right people

• You are unlikely to succeed if you don’t find the right people – that’s obvious

• But how do you know what ‘good’ looks like in a new market?

• You may not be able to use your normal appraisal criteria in a new market

• Good local advice is vital in this area• Don’t rush into any key appointments – takes your

time and play the field


Final Thoughts

• Think beyond export to local presence• Take a stepped approach• Venture validate every stage• Be realistic about time frames and ensuing cost

implications• Be strategic not opportunistic


Questions? Email: [email protected]


global market entry - getting it right

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