Meet the Expert
Director/Partner, CLIA Consulting
- Current research focuses on two main areas – cross-cultural competence and business internationalization, particularly medium-sized companies. Recent focus emerging from these two fields is new forms of open, collaborative, user-led innovation and their impact on business growth and social networks.
- Fluent in French and German and knows the institutional infrastructure supporting business entry in Europe's largest markets.
- Work exploits the links between foreign language competence, intercultural competence and international management processes.
- Led projects funded by UK government, the European Commission and the OECD, mainly researching small and medium-sized enterprises (SMEs). Currently involved in a European project looking at obstacles to SME penetration of the assistive technologies market.
- Consulted on exporting, business growth strategy, international HR strategy and innovation.
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International Expansion and Development into Europe
Director/Partner, CLIA Consulting
- The classic models of importing and exporting are falling by the wayside, and companies are internationalizing with exporting and subsidiary models that require partnerships and alliances.
- Internationalizing a company often follows a particular sequence, and it used to be the case that that sequence started with importing because that helped reduce raw materials costs. Exporting benefits your home economy – you're creating jobs in your own country and you're getting cash for exporting your surplus product.
In addition, consultants and governments are looking at more sophisticated market operations and entry because the economy is so rooted in collaboration and exchange of knowledge. It's not just about finding a good distributor anymore. To be really successful, particularly if you're in the technology and knowledge-based sectors, you have to export AND build partnerships with people in local markets who eventually become your resources. They'll enable you to find out about the market, find the right people and the right channels to support your joint investment.
Traditionally, that's been a long-term process. But more and more companies are speeding it up and getting to wholly-owned or jointly-owned subsidiaries quite quickly. This makes good business sense. It has made American companies successful in global markets. They know that the markets are so huge, and so complex, that they can't internalize all the resources they need to be competitive in a foreign market. They need real partners in order to be successful across multiple foreign markets.
- Cross-sectoral, cross-corporate partnerships and collaborations are increasingly the norm.
- More flexible and fluid approaches to meeting demand are increasingly the norm. That's partly because these days, stock and product lists are very dynamic thanks to fast-moving technology, and shelf life and product life cycles are shortening as new products come in faster and faster. This has upended the very nature of marketing and business development.
For example, sectors like mobile telephony have given rise to thousands of servicing and accessory businesses which continuously have to restock and retool to keep up with new products and trends. This is a global industry with massive knock-on effects for other sectors and Europe is at the forefront of consumer demand and standards development.
- Successful companies are paying attention to the 'big picture' and the importance of collaboration to the bottom line in the long run and focusing less on immediate revenue targets.
- These days, companies expanding their business into Europe are increasingly aware that the upfront investment in capturing knowledge, relationships, and potential for collaboration can go a long way toward making their business viable five or seven years down the line. They are recognizing that this is just as important as immediate revenue increases.
New energy sectors requiring large up-front investments require vertical and horizontal business partnerships which are geared for the longer term. Strategic alliances and supply-chain partnerships are becoming more common in many sectors, such as retailing and healthcare.
- Web-based systems are mediating language and cultural differences.
- Think about it: if you're selling a product in another country with a foreign language, consumers of that product are going to have things to say about it online, in their native language. Obviously you want to capture that information because you're interested in your company's reputation, but the problem is that machine translation (think Google Translate) of that information is unreliable, and having every single thing posted about your product translated by a professional translator isn't feasible.
So people are devising different kinds of software and tools for analyzing the data without translating. These tools analyze the data in terms of features of language, like positive and negative statements and familiarity with terminology that is central to your product, its relationship with competitors' products, etc. Linguists, management, strategists and information technologists are in the early stages of developing tools for faster and more reliable decision-making.
- The mobility of people across borders means there are more diverse workforces.
- Workforces today are diverse and mobile. Twenty years ago, if you wanted to deal with a German company, you'd have to find a German in Germany to help you. These days, you could probably find a German in your local community who can help you.
The whole process of recruitment and training is very different now because there's greater availability of knowledge and skills across geographic regions. In these terms, national borders don't mean so much any more because everyone is into international investment and because talent is dispersed.
Your company's ecosystem is a mesh of visible and invisible assets which is a vital source of knowledge. Knowing how to identify and work with these assets is critical for your success.
International Expansion and Development into Europe: Key Trends