The level of attention that global business now receives, due to an increasing number of viable markets and enhanced access to those markets, presents unprecedented levels of opportunity along with many new challenges to doing business.
A reason that companies often try but fail in global markets is a lack of awareness of what makes a successful global trader and global organization.
Entrepreneurship is a very important quality for navigating the complexities of global business. However, entrepreneurs can make the mistake of placing too much importance on their own passion and strength of conviction and not enough importance on self-examination and strategic preparation.
Taking a “leap-before-you-look” approach to pursuing foreign opportunities is likely to be costly and has a high potential for failure.
Whether the CEO of a medium-sized firm, a small-business owner or a lone consultant, a business person should be aware of some of the strengths of today’s successful global companies as well as the weaknesses that most new traders must overcome.
Many companies succeed in the current global marketplace by concentrating on niche positioning and innovation. These companies also realize that success and profits in global trade are directly tied to the amount of energy, commitment, planning and follow-up they put into it.
1. Focus on niche value
Today’s higher concentration of global competition has made refining the value proposition and focusing on developing niche markets an attractive and often necessary strategy.
Until recently, a niche approach was viewed as the domain of small companies competing with larger firms. Now, companies of all sizes are developing products and services for increasingly segmented global markets.
One of the drivers of this trend is the complete penetration of the Internet and e-commerce into the global business environment.
The Internet is the ultimate niche marketplace. The level of choice, combined with the ever-increasing demand for end-user customization, means that successful online companies are usually those that define their value with an intensely refined focus.
This trend is mirrored in the offline global marketplace, where heightened competition has required many companies to re-position their product or service, or their market strategy and market orientation.
Niche marketers specialize in products and services that, at the time, might not appeal to other companies because of non-existent or limited demand.
Once recognized, the niche can be developed “under the radar” of potential competition until enough demand for the product or service has been created to attract their attention.
By that time, niche strategists may well have protected their position with patents, brand loyalty or a reputation for excellence.
The original market entry of Google Inc. is a popular example of using a niche focus to capture a global audience.
The renowned Internet search engine company, officially launched in 1999 when it was barely more than a home-based business, concentrated on providing a single service—a search tool for locating relevant web-based content with superior quality and accuracy of results.
At the same time, other more established Internet companies, such as Yahoo!, were attempting to add value to their search functions by providing news services and other types of content.
By 2002, while Google’s competitors continued to dilute their original strategy, Google focused exclusively on the production of the best search results, and managed to gain enough market share through user loyalty and word of mouth that their website became, and continues to be, the world’s most-used search engine.
2. Innovate, innovate, innovate!
Companies that innovate can create their own demand by generating new products and processes. But an inventive product or service, even if it finds success in the domestic market, will not necessarily translate into success in foreign markets.
Global business leaders are turning their focus towards innovation in the organization itself.
For many companies, innovation in the corporate approach may simply mean a commitment to proper awareness of and preparation for the differences between conducting domestic business and doing business globally.
3. You need to commit to sustainability
The quality of leadership and a flexible attitude towards change are inherent aspects of innovators. For a number of decades now, Sun Tzu’s The Art of War has been required reading for corporate executives the world over, particularly in the context of global business competitiveness.
The application of the strategies of war has inspired many business managers on how to approach “the enemy.” However, global managers have since begun to take a more innovative view of what it means to be competitive.
Valuing collaboration, awareness, accountability and understanding of the marketplace, partners and customers are key elements in how competitiveness is defined in an environment that is more connected and interdependent than ever.
Consequently, in addition to vision and innovation, a commitment to sustainability is seen as a vitally important management commitment in any business.
Corporate sustainability borrows elements from four well-established concepts: sustainable development, corporate social responsibility, stakeholder theory and corporate accountability theory.
In other words, companies that are going global recognize the necessity of balancing the need for economic growth with environmental protection and social equity (i.e., sustainable development).
They also acknowledge that ethical managers should consider the needs of society, not just the interests of the shareholders or themselves (i.e. corporate social responsibility).
Finally, firms recognize that there are many groups and individuals who can affect or who are affected by the achieving of the organization’s objectives (i.e. stakeholder theory) and that the firm has both a legal and an ethical responsibility to provide an account for the actions of the firm (i.e. corporate accountability).
While this commitment to sustainability may appear too far-reaching in principle, it is the very soundest foundation for business in that it is a commitment that will help firms avoid short-sighted business decisions that can be catastrophic to the firm in the long run.
What are your top goals as a global business entrepreneur? How can these tips help you achieve those goals?