Moner Attwa has been leading private sector growth in companies that support the Department of Defense and other Federal Government agencies for over 15 years. In the following article, Attwa discusses international business development and key global strategies.
All-new revenue streams. Previously untapped markets. Rejuvenated product development.
High ROIs. International expansion is an exciting time for many businesses, but that doesn't mean it's without its own complexities and stressors. In fact, going global requires intricate planning and the employment of a well-thought-out strategy to ensure that the move is a success.
Moner Attwa says that with the right mindset from the board and well-developed plans, those taking companies overseas can effectively manage potential risks and ensure the use of best practices for operating in unchartered territories.
Moner Attwa Explains Why Businesses Go Global
Expanding internationally isn't a decision to be taken lightly — the effects (positive and negative) can be wide-ranging and far-reaching. So, it's typically only something discussed and affirmed by businesses that have already thoroughly penetrated their domestic market.
Despite the complexities, global expansion can be a fantastic opportunity. Thus, companies choose this route for a myriad of reasons, including:
- Increasing and diversifying customer bases
- Boosting the brand's footprint
- Favorable conditions in the new market (e.g., lower taxes, resource abundances)
- Capitalizing on recently found talent pools
- Scarce competition
- Establishing new sales cycles
The Key Global Strategies
Moner Attwa explains that there is no one-size-fits-all approach for going global. However, companies heading into the wider world often follow one of four primary expansion strategies — international, global, multi-domestic, or transnational. Bartlett and Ghoshal state that the various positions companies take regarding global integration and
local market responsiveness separates one strategy from the next.
• International Strategy
Businesses adopting this strategy enter new markets without significantly adapting their pricing techniques or product features. In other words, they use the same branding, functionality, and design, while selling at comparable price points.
Moner Attwa notes that this is essentially a drag-and-drop process, allowing companies to put their product straight in front of new audiences without reframing based on cultural expectations or differences. New target audiences will buy the items because they like what they've heard/seen about the business.
Apple, the tech titan, is a great example of implementing the international strategy.
• Global Strategy
With a global strategy, companies construct cost-effective operations for overseas markets, minimizing regional and local variation. All market's products or services are mostly the same to minimize costs and increase the likelihood of becoming an overall industry leader.
Moner Attwa says that businesses taking this route tend to undercut competitor's prices in every market they serve. They want to win the market share by providing the best prices, not changing their products to match cultural differences.
Coca-Cola achieved world domination through a global strategy. The soft drink tastes the same wherever it's purchased, but its packaging, promoting, and distributing efforts are performed differently in each market.
• Multi-Domestic Strategy
Taking a multi-domestic approach requires businesses to adapt to local cultures. Each market's unique preferences and tastes are catered to with the products or services to boost competitiveness within said market. It's similar to an international strategy in that it doesn't compete based solely on pricing.
Companies will change their product considerably, potentially making it incredibly different from the items they currently sell, to appeal to customers who see the business as being a better fit for reaching their needs and preferences.
Moner Attwa explains that this might seem an expensive way to go. However, the product price won't fluctuate based on the market, and thus, expenses are recouped in the long run.
Lay's, the US-based potato chip brand, adopts the multi-domestic strategy. When operating in other countries, it boasts different brand names. For example, UK residents purchase Walkers' crisps in flavors like paprika that are uncommon (or unavailable entirely) in the company's domestic market.
• Transnational Strategy
The fourth and final strategy is reserved for businesses who want to ensure both reduced costs and customization when going global. The technique looks for ways to optimize products/services for the new market while keeping costs as low as possible.
Moner Attwa says that to minimize costs, companies often use the same suppliers to avoid crafting additional supply chains. Minor customizations are easily added without accelerating charges or making huge changes.
Baskin Robbins, the much-loved ice cream company, uses a transnational strategy, wherein it sells distinct flavors in different countries. For instance, consumers might find matcha and chocolate ice cream in stores around Asia, but not in other continents.
Moner Attwa notes that while every global expansion strategy is different, certain factors must remain, such as market analysis, internal business audits, competitive analysis, localized infrastructure plans, top-down budgets, and marketing strategy. That way, businesses always give themselves ample room for success.
