The movie and television industries are perfect examples of why businesses should think global. While the United States generates 30% of the entertainment revenues worldwide, China’s box office market is about equal to the U.S. When U.S. companies export their movies to overseas markets, they gain access to many new customers.
Additionally, differences in tastes between nations and cultures can insulate studios from failure. Ice Age: Collision Course made only $64 million in American markets on a $100 million budget, but it made $408 million in the rest of the world, turning what could have been a terrible loss into a money-maker.
Think Global: Best Practices
1) Develop an International Strategy
Before you begin looking for a new market, carefully create an international business plan to find out what you need from a market and what your goals should be. Without a careful plan, you could waste time and money chasing markets that may not work out.
2. Immerse Yourself in the Business and Local Culture
It can be difficult to do business in an unfamiliar culture because many assume that domestic values and morals are universal. Dutch psychologist, Geert Hofstede, writes that cultures have six dimensions that affect how they understand the world:
- Distance to Power
- Individualism vs Collectivism
- Masculinity vs Femininity
- Uncertainty Avoidance
- Long-Term Orientation vs Short-Term Orientation
- Indulgence vs Restraint
Not only should a company research the business climate of their target market, they also must fully understand how the culture works in order to properly manage team members and successfully sell products or services.
Global Flexibility Through Design Thinking
As you approach new markets, one of the keys to continued growth is maintaining flexibility. Since each market has different cultures, business practices, and tastes, you may need to approach each market differently.
The old way of thinking begins with what the company can do and then tries to deliver it. Design thinking begins with the user in mind and can help your company focus on meeting the needs of your customers in each market. Design thinking has four steps:
1. Define the Problem
Every market has needs that companies can fill, and this step helps companies define local needs. Observation is key. Spend time observing and analyzing potential customers so you know their needs and limitations.
2. Create Many Solutions
Once you have defined a need that you can meet, you can begin creating solutions. For many companies, especially when they have had a lot of success in the past, traditional solutions may seem the best. However, when a team creates and evaluates multiple solutions, they can analyze whether their standard approach is best for this market or if they should go with a new, innovative approach.
3. Refine Your Ideas Through Testing
Take several promising solutions and refine them. This might mean testing several possibilities and running many iterations of a solution to discover which ones work best. Don’t be afraid to take risks that might end up with a failed solution. If you have an environment where people and ideas are allowed to fail, you will get more creative solutions.
Sometimes the first time you run through steps two and three, no good plan presents itself. You may have to rinse and repeat as needed. When a plan for entering a market becomes clear, execute.
If you make design thinking a permanent part of your business culture, it will help prevent using the same solution in every international market when your company could have more success with a different idea.
If international growth is new to you, consider teaming up with a partner like Velocity Global to help manage compliance and grow your global footprint without the risks. Give us a call or learn more about our services here.