By Mona Pearl, Special for US Daily Review.
Need an antidote for shrinking domestic markets? Consider international markets. It offers unparalleled opportunity for growth, increased sales, diversified markets and increased profit for successful businesses. Unfortunately, many U.S. companies gaze with trepidation at the process and surrender to fear before making an earnest effort. The main problem is the lack of experience, talent and confidence on behalf of small companies to navigate emerging global markets. Other smaller countries around the world, however, have operated globally with success for generations.
Some of you may be contemplating global expansion but are not be convinced that this is the right path for growth, or have no tools to assess and make the decision. How can companies overcome this barrier to success, and make informed, sustainable and relevant decisions on global strategic growth?
Going Global: What’s In It For You?
First of all, unless you have been living under a rock for the last few years, you’d know that the real growth occurred outside the US, while the US economy has been in decline. Countries in Asia, Latin America, Australia… they all surpass US growth exponentially, and the trend will continue based on the research done by the World Bank.
By 2020, 95 percent of the world’s customers will be outside of the U.S. To reach global markets, companies need to adopt an international mindset with the drive to not just survive, but to thrive in our ever-flattening business world. Going global is a necessity and not a choice to ponder. And instead of feeling panic and fear, they should look at the global market as an opportunity.
Where in the world should you go?
You know you should make a move, and you think your product or service could perform well in international markets, but how do you decide where you should target your efforts and what efforts are necessary?
The search is ongoing for markets that promise growth and new opportunities for businesses around the globe. Here are a few from which you could decide:
- The G-7 (Canada, France, Germany, Italy, Japan, the UK and the United States)
- The BRIC (Brazil, Russia, India and China)
- The N-11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam)
- The CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa)
- The MIST (Mexico, Indonesia, South Korea and Turkey)
- And the 3G (Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam)
The Comparison of Base Scenario with Optimistic and Pessimistic Scenarios, 2012 – 2025, was conducted by the conference board and published in January 2012. This study forecasts growth around the world and let me share with you a few eye opener numbers that will hopefully make you realize that the real growth, opportunity and future is by growing globally.
These numbers are for 2012 – 2016:
Country GDP Growth – Optimistic Scenario GDP Growth – Pessimistic Scenario
US 3.6 1.5
Asia Develop. Countries 5.5 3.9
Latin America 4.1 3.6
Middle East 4.5 3.0
Africa 5.4 3.9
Not to mention the stars:
China 9.6 3.6
India 7.7 4.6
So as you may see from the above numbers, the US growth potential isn’t ranking high on the list!
Because new opportunities are constantly emering, analysts, the World Bank, IMF and others, have conducted extensive analyses of market conditions in countries far off the traditional radar screen. However, what companies need to pay close attention to when selecting a new target market isn’t just one country’s market performance over another. Rather, the right target market has everything to do with aligning your company’s unique product/services, goals, vision, and global strategy with the most suitable region, country and target market.
What factors are important when choosing a target market? Everything from income, urbanization, language, culture, purchasing power, regional/local trends, and many more considerations. As such, this process involves taking the abundance of available data from a growing number of market possibilities and filtering that information to identify the best possible target market for your particular business.
Forever Emerging? Where Are Your Growth Markets of Tomorrow?
It is almost impossible to find a business leader in the global marketplace who does not operate, or at the very least, is not exploring opportunities with or within emerging market countries. Even those entrepreneurs who prefer domestic markets experience competition from companies based in these regions.
The term “emerging markets” is now more than 25 years old and has come to define the new global economy and rapid changes. Dozens of countries fall under the label even though they are evolving at their own pace and with their own twists on economic development. The term is often reduced to the concept that emerging markets are “emerging” because they have not “emerged.”
Now, as many emerging markets show signs of a strong and growing middle-class population, observers wonder whether the term has lost some of its meaning. Initially, the phrase applied to fast-growing economies in Asia and was used in Eastern Europe after the fall of the Berlin Wall. As global interest in market-driven economies grew, companies began to look toward Latin America for emerging markets and eventually at countries such as Indonesia, Thailand, China, India and Russia. In many ways, this category has lost its meaning. While S. Korea, Indonesia and Singapore may share characteristics, when put together in the same bucket with Mexico, Poland and Turkey, it is no longer meaningful.
How to decide?
Regardless of the loose definitions and characterizations, the question asked remains: which are the countries with the biggest growth potential for that will accelerate your product/services growth across-borders?
Investigate the strengths and weaknesses and how they might synchronize with your long-term strategic goals. Start building relationships now. Alternatively, ask how you might modify long-term goals to take advantage of these opportunities.
Mona Pearl is a global strategic business development expert as well as the founder and COO of Beyond A Strategy, Inc., a company providing expertise to plan and implement cost effective and sustainable global growth that improves a company’s bottom line and helps realize seamless international operations. In addition to Beyond A Strategy, Inc., she has also founded and operated 2 additional businesses and sits on the board of several organizations. Past clients include Deutsche Telekom, Michelin, American Airlines, Philip Morris and Bacardi. She is the author of Grow Globally: Opportunities for Your Middle-Market Company Around the World, has been quoted as an expert by CNBC, Oracle, Chicago Tribune, NPR/WBEZ, Microsoft, Bloomberg, Entrepreneur.com, and Crain’s Chicago and regularly publishes columns on global competitiveness in industry magazines, including Manufacturing Today and Management Today.