After having succeeded in the home country, it is a visionary direct sales entrepreneur or executive’s dream to take the business to a further step by expanding into other countries. Yet, success does not come easy, especially on a foreign soil. We see companies that have been doing so well at home, are not having the same results in other markets. And these are quite a few!
Here, I have listed some vital questions that managements should ask before going global:
Is it really worth going there?
Market research is not just a fancy concept in marketing. You might be having field leaders telling you they have very good connections in market “A” who are dying to build your company’s business there. I would suggest listening to them well but doing your own due diligence at the same time. Make sure your work consists both of comprehensive desk and field researches.
Is the business climate favorable?
Some countries impose extra requirements on incoming foreign investments that do not exist for locals. Some others put several restrictions on profit transfers abroad. Similarly, direct selling might not be well-received by the local authorities or in the eyes of public. Some or all your product categories might not be welcome. Make sure you check all of this well before putting a step on that market.
Should we open a wholly-owned company or partner with a local?
The conditions in your target country might be clearly favoring one above the other. And this might be quite contrary in another market. Weigh these two options well, taking into account all legal and economic pros and cons of each and then decide. In the case of partnering, make an extensive background check and never jump into the first offer coming from a successful local field leader.
Do we have the sufficient “extra” resources to start a business there?
Even if you have already appointed the key staff in that new country, there will still be a lot do at home to prepare the market for a launch. Don’t let this become an additional workload on your already overwhelmed managers’ shoulders. Similarly, don’t let the launch bring unplanned, unforeseen stresses on your company’s finances too. These can easily hurt your existing business at home.
Are we going to able to sustain and grow the business in that market?
Managing international markets, once they are opened, is a different ball game. Different markets have different legal, political, socio-economic and cultural characteristics. And this reality requires different sets of skill and knowledge than those you needed for running the business at home. Direct sellers? Believe me they are so different in their attitudes, expectations and approaches, too. Oh, make sure you will be able provide an uninterrupted product supply to that country as well.
Putting one more country flag on the company website adds prestige, for sure. However, a market failure can be very costly to the whole business. Don’t let this journey become an ego trip!
Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.