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The Trouble With Trying To Expand Globally

The Trouble With Trying To Expand Globally

Misfiring on a global expansion can spell the death of a company. Take Borders example of not investing in an e-commerce platform and digital readers because they were failing in an attempted overseas expansion. Being able to successfully expand onto global shores is the jackpot for every company, but specific considerations must be accounted for to ensure that the beachhead is successful and not just a temporary landing.

The first challenge is being able to engage the remote team in the day to day operations. Typically, there are significant time and distance issues with a remote team, where many times their workday is ending the same time the home office is just starting which leads to decreased leadership attention that foreign leaders receive. Due to location and time zone challenges, remote leaders often become ignored out of convenience and proximity. This is the opposite of desired intentions as remote leaders have a greater need to communicate with their leadership to maintain strategic alignment and to fully communicate the unique roadblocks and difficulties a foreign culture can create that slows progress. Lastly, a lack of frequent and routine communication between domestic and global bodies creates the opportunity for the remote employee to feel stranded and disassociated from their organization. This disassociation holds true for the homebody as they will be missing the cultural exposure and link to those markets unless they are engaged with their foreign correspondent.

Secondly, organizations are predisposed to practice parochial strategic planning. While the negative impact of having a single perspective for domestic strategies may be overcome, having a singular outlook for a global strategy can prove to be fatal for an organization. Much of the research and studies highlight the endeavors of global field offices aligning to the home country’s strategy versus the shaping of the organizational strategy to the conditions of their global markets. This creates the opportunity for potential misfortune by lacking the cultural cognizance to understand how strategies will be received in an emerging market. This one-way communication can also lead to the inability to recognize new opportunities that can be exploited and new innovative ways that value can be created.

Lastly, the maintenance of planning processes does not elicit flexibility and does not enable a dynamic work environment. With a creation process that doesn’t necessarily consider the realities of foreign markets, it also doesn’t typically involve a process to alter and change strategies following the implementation. With such significant potential differences between cultures, ideally, an organization would want to match the cultural energy that is experienced and to continually mold their strategies to the cultures that they are participating in. This can create organizational misalignment and a misuse of resources that results in missed opportunities.

Focusing on a positive example, recall the Louis Vuitton expansion into Asia. China was in the beginnings of their economic growth and had an appetite for luxury. While Louis Vuitton’s brand name was a consistent strong point, their ability to apply and adjust their expansion strategy made the move successful. Louis Vuitton took agile steps as they realized that the cultural and language nuances were stunting their success. Adjusting quickly to hire local experts to help them understand how the local search engine optimization (SEO) and social media worked in China their e-commerce platform was able to dominate the luxury industry.

 

 

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