Five challenges you’ll need to overcome to succeed in international business

14/10/2014

succeed in international business

succeed in international businessInternational trade requires you to operate outside your comfort zone, but that’s where the magic really happens in terms of flourishing, shining and achieving your goals.

As the global village continues to get smaller, you need to be prepared to face differences between countries, markets, economies and human behaviours.

International trade will expose you to unique challenges, and you need to answer the following two questions if you want to succeed:

1) Am I interested in facing and handling these types of challenges?

2) Am I prepared to handle these challenges? If not, what is my plan to get prepared?

Are you ready for the challenges of global trade?

Let’s consider the following five challenges:

1) Before you dive into a foreign market, you need to do some research and learn about its economy, market trends, consumer behaviors, policies and trade agreements to help yourself plan.

Hopefully your research will reveal any barriers to entry, as well as whether or not they can be avoided. If they cannot be avoided, then you are definitely better off choosing a different market at an early stage before incurring any additional costs in research or other areas. Local distributors and agents can bring great value to your research, and can become your eyes and ears in a foreign market.

At Canada Topp Co., we recently hired a distributor in a foreign market to serve one of our brands. They discovered three elements which may negatively influence the product quality and acceptance:

a) The hot climate

b) Customers do not read the instructions

c) Customers’ hygiene habits

We quickly modified the instructions to include information useful for that specific climate, and the distributor created their own catalog in their native language with illustrations to make it easier for the consumer to learn how to use the products without having to do a lot of reading. This distributor was truly our eyes and ears in that market, which enabled us to take the necessary actions to succeed.

2) You need to learn about the culture, language, religion, body language and etiquette of the foreign market you are interested in pursuing.

Do a simple web search. You will be amazed at how much information is available for free and how much you can learn from it.

For example, if you are a punctual person, do not always expect the same from your customer in a foreign market. Expect delays in some countries, even if your meeting is scheduled and confirmed.

My first meeting in a foreign market was scheduled for 10a.m. I arrived 10 minutes early with a team of engineers only to learn that the CIO had left the office a few minutes before we arrived because of another meeting with his boss (which he forgot about). I was informed that this is normal and I am bound to face similar situations almost daily, so I better get used to it.

This isn’t applicable to every foreign culture, of course. Some cultures value punctuality, and it is considered disrespectful and indicative of a lack of interest if you are not on time for your meetings.

It is fair to add that some of the foreign customers I dealt with learned to adjust to my style of being punctual, and treated me with the same respect.

3) Be aware that in some countries, the business does not move forward unless you are willing to offer a bribe.

Prepare yourself to say no and walk away from the deal. Do not do something behind closed doors that you will regret afterward. You need to follow your company’s code of conduct, which probably prohibits such actions.

More importantly, you need to follow the laws of your own country. A Canadian businessman was recently sentenced to three years by an Ontario court for offering bribes to Air India officials and India’s then Minister of Civil Aviation.

Finally, if bribing someone was the reason you won the business, then you are easily replaced by someone else who is willing to offer more. Building a long and lasting relationship is fruitful, but it needs to be based on trust and an understanding of the value each party brings. This is especially important in international trade due to the cost and effort associated with foreign market entry.

For example, at my company we always seek long and lasting relationships with qualified distributors who can serve our global brands. In the event that we get a request for a one-time sale, we attempt to turn it into an exclusive contract, but if they are not qualified, the sale is refused.

This helps us to maintain the integrity of our brands, and it perpetuates a healthy relationship with our network of distributors. This also creates a distinguishing factor from the many cheap imitations you are more likely to encounter when you trade internationally.

4) You will face challenges with logistics (ie. shipping, customs or transportation).

Do not get frustrated; rather, put on your creative hat and shift gears into solution mode instead of blame mode. Too many people and processes are involved, so you just need to be positive and be prepared.

We face challenges when we travel on vacation for pleasure, so you can only imagine the added complexity of doing business across international borders. Once you have gone through the process multiple times, you will learn and become creative in forecasting trouble and planning for it.

At my company we learned to send the shipping documents to the buyer as well as to the clearing agents before the shipment is sent. The documents are then validated to ensure they are compliant with the customs of the receiving country. We take actions on any changes required before the products leave our warehouse. This saves time and cost for all parties involved, especially if you are trying to meet a campaign deadline. Any delays can be costly.

5) Similar to how you prepare for challenges, you also need to prepare for the good news of increased sales from your new foreign market.

There is additional demand that needs to be fulfilled, but in ways which are not necessarily similar to what you do at home. New packages, instructions in different languages, and product modifications are a few items to consider in order to satisfy the needs of your new customers. These items come at an added cost, which you must incorporate into your price while maintaining your competitiveness.

We sent samples of our products to a foreign market so they could test them in their labs as well as do market studies for consumer acceptance. The package design was refused at customs because it did not meet the needs of the conservative culture. As a result, we had to send loose samples without the packaging to proceed with the testing. Once it was approved, we designed a special package specifically for that market, which was welcomed by customs and by the end user.

This willingness to learn, adapt and take quick actions will help you succeed in international business.

There are big challenges, but even bigger opportunities

If you are in the field of international trade, you were probably nodding as you read through these challenges and were thinking of similar situations you have had to handle.

If you are about to start this exciting, global adventure, prepare to get creative when you inevitably encounter challenges. It will make you better, stronger and closer to achieving your goals!

What’s the biggest challenge you’ve encountered going from domestic to international business? How did you overcome it?

 Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Louei Ali, MBA, CITP|FIBP

Author: Louei Ali, MBA, CITP|FIBP

Louei is the Director of Business Development at Canada Topp Group based in London Ontario (Canada). Canada Topp Group is an export trading company that helps Canadian companies with opportunities and business development in over 40 countries by acting as their export arm to reach a well established community of qualified distributors.

disqus comments