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Business people
dream of having a “global” company, having a sales force scattered
around the world, knocking on doors and delivering orders to the
factory. Dreams are just that, dreams and at times it is
necessary to wake up and smell the “local” roses.
Companies that
invest in international sales, when their domestic market is not
performing as well as it could be, have become lost in their vision
of being a “global” company. It is always much easier to sell
and service your home market and hence more profitable, than looking
for the proverbial greener pastures.
In many cases the
problem is one of perceived opportunity. A foreign dealer,
distributor, manufacturer’s agent presents themselves to the company
and tells them that they can sell the company’s products in their
market. Maybe they can, but the question is how much support
will they require to provide the company a realistic return on their
investment.
The company’s
investment is in:
-
Time & Effort
(These items are usually ignored, but in my opinion they are the
most crucial items. The question I usually ask is, “if you
spent the same amount of time and effort, focussing on your
domestic market what would be the result?”).
-
Travel
-
The foreign
company will require training
-
Can
the foreign company “close” an order without a factory
representative?
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Trade shows
-
Sample products
-
Selling terms
-
Foreign
exchange
-
Communications
(phone, fax, courier)
-
Possible
translation costs (brochures, literature, manuals)
-
Local approvals
It can be extremely
difficult to say no to someone who wants to do business with a
company, but there are times when no is the right answer.
Diluting
business efforts rather than concentrating them on a strategic plan
is never the right decision and has led to the downfall of many
companies.
If a company is focussed on trying to obtain business
from a foreign market and during that time frame the domestic market
is suffering from lack of attention, the company is making a very
bad strategic decision.
The
foreign market will most likely not go away. When the domestic
market is secure, that is the time to invest in going “global”.
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