Looking to amp up the exporting side of your business? Think good and hard before moving forward.
Speaking at the Go Global conference, New Zealand Beachhead Advisory Board chairman Wayne Norrie cautioned businesses to tread carefully when designing an international market model.
Going straight from New Zealand to global sight unseen is not usually the correct strategy, he says.
“One of the problems is we do it all here and try to do it all when we go to larger markets and that’s a mistake. If you think you’re going to do the same thing overseas that was successful here, think again."
You'll need to tightly define your target market – boil it down, then boil it down some more. You can almost always be even more specific, and you need to. And watch out for your chosen sectors and tiers within those, says Norrie – some are highly regulated, so do all your homework first.
Too many companies end up looking backwards, he says – wondering why what worked yesterday isn't working now.
Markets change faster than you think, so go overseas and do it fast. Put capital only into what is core to the business and value added, and avoid tying it up unnecessarily in dead assets (Norrie cites examples of farmers with dead money tied up in buildings and equipment, which could instead be rented on an as-needed basis).
After all: “You can't run like a cheetah and have the baggage of an elephant.”
Norrie says it's crucial to expand overseas for the right reasons – not because cash is tight and you’re looking for some quick wins. That's probably not going to happen. Rather, be prepared for the long haul and changes along the way.
And beware of playing the 'Kiwi' card – it can scare people away.
"Be aware of what that means. You are saying 'I’m not local, I’m from somewhere else' – you're an outsider."
That may not mean anything in some countries. Vijay Crishna, executive director at Lawkim Motors and chair of the India Beachhead Advisory Board, says there's very little awareness of New Zealand as a brand or country in the fast-growing Indian market. He suggests companies could work together to present greater credibility as an industry (think IT, aviation, etc).
Indeed, Norrie says partnerships are one avenue to success.
"Those that use channel partners to sell and support have a much higher success rate."
All the big companies use channels, he says, but it takes years to establish those relationships. However, the benefits are clear.
"You get local market knowledge. It's almost impossible to comply with tax law in Brazil for example, or register a company in Singapore."
Having a partner abroad doesn’t mean they can do all the work, and it certainly doesn't mean you can be hands-off from then on. Norrie says channels work more effectively when seeded – so bring a deal to them, then hand over the reins.
Neil Cowie, CEO Pumpkin Patch
* What you’re good at in your home market doesn’t always translate globally
* Spend time in the market, and get to understand the market
* Partners can make or break your venture. Ensure they have a vested interest, understand your business, aspire to the same values and have aligned strategies
* Protect your IP. Know your points of difference and lock them down, because inevitably, if you're successful somebody will try to copy you
* Have an exit strategy in case things go wrong
Simon McDonald, CEO Triodent
* Get your product to market quickly. Observe the 80/20/20 rule: 80 percent of the product finished in 20 percent of the time and 20 percent of the cost
* Design: less is more. No superfluous features. Subtract until it doesn’t work anymore
* Encourage robust debate. Ask ‘what do you think”? Encourage staff to question and challenge you
* Manage by experiment: set up multiple small experiments that don’t risk the business in order to identify new opportunities or new ways of doing things
* Great employees are truly rare. When you find the right people, take them on even if you don’t have a job for them