an SME or A start-up company that wishes to expand internationally may not attack the whole world. It should set priorities and avoid opportunism in the choice of destinations.
What country to choose when you want to launch to the international?
“SMES, first time exporting, with a low experience of the international, have an interest in attacking the country’s border. The geographical proximity, the common rules, the cultural proximity, currency, and common rules to facilitate the process… This conservative strategy allows them to gain credibility but also to benefit from gateways interesting : a first step in the Uk facilitates for example the entry in the countries of the Commonwealth, a presence in Portugal, may lead to markets in brazil” advises Henri Baissas, deputy director general of Ubifrance.
The more mature businesses, with good results already and customer references, should not hesitate to target more distant countries and more emerging as Asia, sub-Saharan Africa or Latin America.
Finally, innovative SMES, Born global, it must act differently : for them, it is not a question of proximity, but from time-to-market. “They should from the start think international and attacking large markets like the United States, Japan, or Korea. The ideal for them : to find a local partner with a distribution network expanded,” continues Henri Baissas.
How to know if your product/service will meet the local expectations?
It is enough to ask the right questions to start : is my product or service responds to a need, y-a-t-he of the competitors, the political situation of the country is stable, the growth is sustained, the birth rate is supported …. Ubifrance offers detailed studies on all countries with data markets, macro-economic and demographic. A journey of recognition allows then to identify the cultural differences, the state of the road infrastructure, the political and social climate. To deepen, it is always possible to enlist the services of a young graduate in LIFE (international corporate volunteer) who will go on site for several weeks or several months. It will be able to study the market and start prospecting. These first steps, inexpensive, can be used to validate the initial choices but also to avoid errors of casting country before committing more before.
What mode of implementation would be preferred ?
It is necessary to proceed methodically, almost chronologically as a function of its financial resources. In a first step, the solution of a local distributor can be a good thing : the formula is simple, economical and fast. But not always appropriate for some emerging economies, loosely structured, and culturally diverse as India, China, Russia, and Brazil. The creation of a subsidiary, a joint venture or the acquisition of a local company is more efficient but requires the kidneys strong and an excellent knowledge of the social law, commercial and tax in the country. But each sector also has its specific codes. “In the fashion or consumer goods for example, it is preferable to pass by commercial agents who are responsible to build a distribution network. A presence on the site is not mandatory. On the other hand in services, it is imperative to exist locally and be present with a subsidiary or a joint venture. This will be more effective to make themselves known but also to recruit staff” recommends Henri Baissas.
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