While waiting for foreign companies and their direct investment to come knocking on our door here in America is one option, so much more opportunity for U.S. companies can be found by proactively going abroad to develop business opportunities in international markets.
The challenges companies face in “going global” vary from company to company, from industry to industry, depending on their unique circumstances and strategic goals. However, broadly speaking I have found that there are two basic categories of challenges that all companies must deal with.
The first category is comprised of common challenges including:
These challenges are well known and straightforward so most companies entering international markets are familiar with how to deal with them.
The second category of international challenges arises from different business practices and market expectations found abroad. These challenges, for the most part, go unrecognized by U.S. executives. However, while they may be unknown, their impact on the bottom line of American business abroad is quite problematic – ranging from simply limiting sales revenues on one hand to causing businesses to outright fail on the other hand. Experience after experience shows that the culture-based challenges typically are the overwhelming factor determining the level of success American companies achieve abroad. Dealing with these particular challenges is what we call “intercultural management”™ at Asia Strategic Advisors.
What specific areas of business do culture-based differences in business practices impact? Actually, just about every facet, including: Managing, Negotiating, Human Resource Development, Marketing, Sales, Manufacturing, Communications, and Business Partner Relationships.
Given their scope and far-reaching impact, it is imperative that American businesses are fully aware of these challenges and have a plan for effectively dealing with them.