Uncategorized

International Business Expansion – How to be Lean

By July 11, 2016 October 18th, 2017 No Comments
International Business Expansion - How to be Lean

International business expansion in today’s volatile world provides for great opportunities but also comes with challenges. The Wall Street Journal has a great article called Volatile Market Opportunity that goes into detail.  International business should be something that is not taken lightly and approached with a well thought out strategy. One must make sure they establish themselves on the right footing furthermore, they need to accomplish the goal in a compliant manner. With all that being said the ability to expand internationally utilizing Lean principles is something that is unknown to many.

New call-to-action

Lean is a concept that was first introduced by manufacturing companies to help maximize customer value while minimizing waste.  The manufacturing process of Toyota in the 1980’s was the epitome of this concept.  Lean does not only apply to manufacturing, all businesses can integrate the concepts.  The best adaptation of Lean principles that is easily executable by all businesses is the Eric Ries’s “Lean Startup” book published a few years back.  The most basic summary of his teachings can be  expressed in the “Build, Measure, Learn loop.”  Here is a great infographic that explains the loop in greater detail.  Startups are using these methods to deliver value far more effectively, and we think the same can be done in international business expansion.

Using Lean to be fast – Test your market

There are many steps to becoming a lean operation (Steps to Lean) but the goal should be to “trim excess fat.”  We recommend that businesses test foreign markets with a light footprint before committing large capital investment.  That is impossible when utilizing a typical model of establishing a foreign subsidiary because of the time and money that have to be invested.  Many companies are testing markets by using an International PEO or Foreign Subsidiary as a Service.  These services allow companies to get human capital in-country within 24-78 hours to identify opportunities.  The “excess fat” that is trimmed using these services versus going in-house is:

  • Managed HR services
  • Managed payroll
  • Onboarding and maintenance of employees
  • Outsourced compliance management
  • Facilitated terminations

By leveraging the service-oriented structure of this approach, you can focus on testing the market and building value.  Companies that do not do this get consumed by administration tasks.

Final word on Lean

Modern companies are using a lean approach to grow, including international business expansion.  Only when the market is vetted should you expand on that foundation of stability.  Lean principles should still be used even when your business is large.  Always be testing, trimming fat, and delivering value to your customers as quickly as possible.

Contact us today to learn more about your options for international business expansion!