25 Oct International Market Entry – Questions Firms Won’t Ask
Businesses study countries and their markets as they ponder which international markets to enter.
They often ask such questions as:
• How big is the market?
• What is our market niche?
• How do we reach our target market?
• What will our brand look like?
• How will we manage our partners and channels?
But also, firms rarely ask the uncomfortable questions that follow.
(1) Security — What problems will we face regarding security of our personnel, belongings, safety of ideas and documents, in addition to the much-sought-after intellectual property security. If we’re negotiating distribution in Bulgaria and we have to worry about street bandits in downtown Sofia, will we be comfortable going there repeatedly?
(2) Money flow — Can we get control our money freely? Can we take our money out of this country?
Are there currency controls that will stop us? Will it be too costly to get your money out of the country or, alternatively, is this country a safe place to leave our money? If we leave our money here, is it insured? Does the interest rate rival that of other markets? If we leave it in the bank, how do we know the bank is sound?
(3) Foreign corrupt practices act — This governs company and executive behavior overseas, specifically related to bribing and facilitation payments.
Does our country find this a high- or low-risk country for bribery?
Once we go overseas, we awaken the U.S. government and they’re watching what we do. How closely will we be scrutinized and how much will it cost to make sure we are in compliance? Is it being assumed that we are in business with corrupt people? In our example, we need to find out the U.S. government’s perception of Bulgaria.
(4) Will they work with our staff? — In Bulgaria, they don’t run into a lot of women in high-powered positions, or people of color or ethnicity. Will the Bulgarians work with our staff if we have these types of people? Will they work with different cultures freely? How do they look at our culture? Are they really interested in talking to us or they just interested in talking to anyone? How will our staff get along with them?
(5) Do we want to even go there? — This is an obvious question but one often overlooked. Do we really want to go to Bulgaria? Is this a place we’re going to find interesting? Are we going to want to spend time in this country over and over again (which is what it will take to succeed)? Do we want to learn from these people and are we interested in what they have to say? Will we find foods we like, entertainment we enjoy, as well as access to things executives often need, such as communication tools, transportation ease, health care and leisure activities? Is visiting an exciting adventure or a tiresome chore?
(6) Are we interested in these people? — This follows from what was previously said: Are we interested in Bulgaria? Do we care about their culture and history? Are we willing to learn any of their language? Do we have anyone internally that is Bulgarian or knows about Bulgaria? Are we going to spend the necessary time visiting the museums, gathering the literature and tasting the culture?
(7) Are we going to relegate our marketing to the locals? — Are we going to hand over our Bulgarian marketing to the Bulgarians or are we going to work together? This is a great litmus test because the more we abdicate our position, the more we show a complete lack of interest and investment. If we don’t make the effort to work well with a Bulgarian marketer, it’s a great sign that we really just don’t care. In that case, we should think about another country to enter. International Markets are available in other countries!
(8) Are there any laws that seem strange to us that we will have trouble obeying? — Some of these laws are more business-oriented, such as those regarding trade requirements.
But U.S. companies may not give much thought to some other laws, such as a particular nation’s traffic rules, workplace regulations or event free speech. Can you write memos and notices in such a way that doesn’t break any laws in Bulgaria, whose culture frowns upon putting everything in writing. Can you live with that?
Remember, firms must invest money and executive time when entering a market. Investments must continue as the market grows and presents unique challenges. Plan to visit a target market many times a year and learn the market nuances, the people involved and the geography. Pick a market that not only offers opportunities, but also enables you to function well as an executive.