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Why Some Companies Are More Successful than Others in Expanding to New Markets?

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Many companies have expanded globally to great success while others have tried and failed.

The difference between these companies is not what they offer; it is often how they go about providing it. There is much research to be done for a business before considering global expansion and which countries are most suitable.

Simply because one business model works in one country does not mean that the same business model will work overseas in another country. Advertising elements such as slogans could mean completely different things when translated into another language.

The same goes for logos, a picture or gesture that is considered normal in one country may be regarded as disrespectful in another. Not everything a business offers translates into a new country.

You can save yourself some time by putting in research, looking at the success and failures of other companies, and getting help from experienced entrepreneurs.

Considerations When Expanding Overseas

When you decide that your company should be expanded overseas, you have to develop a well-thought-out plan. Looking at companies that have already expanded to other countries is a great place to begin your research.

What are the best practices for global expansion that successful companies follow? What did the companies who failed do wrong? These are both great questions to get you started in developing a plan of action.

A Few Examples

Take Best Buy, for example, the wildly popular electronics store in America failed overseas in places such as China, Europe, and Turkey. Why? Best Buy only took what worked for its US consumers instead of researching what consumers prefer in other countries. Europeans do not like large stores, such as Best Buy or Walmart. They prefer smaller and more conveniently placed shops.

IKEA is another example, having worked tremendously overseas and almost failed in America. When IKEA first opened in the US, it was a small shop like its original European customers prefer, featuring convenient, one-size-fits-all furniture. IKEA began to fail and quickly realized that American consumers like big stores and diverse wares. The Swedish-founded furniture retailer decided to redesign its warehouses and its furniture offerings to cater to Americans tastes.

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Not Even Google is Fail-Proof Overseas

No company is safe from failing in an overseas market. Even Google can’t make headway in China because of its censorship laws and its inability to overtake local Chinese markets and its loyal customers. Without a proper long-term team to build brand loyalty and respond immediately to customer demands, Google will never be able to see success in China as it has in other countries.

Top fast-food restaurants that are staples in America have had their share of struggles overseas as well. Places such as McDonald’s, Starbucks, Taco Bell, and Wendy’s have all struggled in certain countries. When Wendy’s tried to move into Japan, they were quickly defeated by established Japanese burger restaurants and American competitors, McDonald’s and Burger King. However, McDonald’s has had its struggles in other countries, too. McDonald’s has seen significant success in places like Japan and the Philippines because of their ability to cater to the tastes of the local people. They were unsuccessful in the Caribbean and Latin America because of the high costs to run the restaurants and the sluggish economies of the countries they chose.

There is no way to know if your company is going to fail or succeed in another country, but you can make the necessary changes to your company to ensure that your business is prepared for the different marketplace and new consumer tastes. Also, never assume that because your idea is different, it is going to work.

Before you move your company overseas, start by purchasing an international virtual phone number in the country of your choice. When foreign consumers have a way of getting in contact with your company, the consumer will feel safe in their decision to purchase from your business.

Always consider the risks and rewards of each country, too. It also helps actually to spend time in the country of your choice. When you travel to another country, you will get a feeling for what their market and tastes are all about. Talk to the local people, even people you meet on the street, and find out what it is that they like and what they are looking for. If they are going to be your consumer, you will need to understand what makes them tick. Finding ways to stay in contact with your consumer is always the best first step to success.

Related: Top International Business Expansion Mistakes to Avoid

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