From Local to Global: How to Capture Market Share by Expanding Internationally
Diane Albano, Chief Revenue & Marketing Officer @ Globalization Partners
Startup Grad School Stage
Ascent Conference 2020
[00:00:04] From local to global, how to capture market share by expanding internationally. Globalization Partners simplifies international business by enabling organizations to quickly expand into new countries without setting up branch offices or subsidiaries. You find the talent and we put your team on our locally compliant payroll localization partners. We help to succeed, help you to succeed faster. Hello, my name is Diane Albano and I am the chief revenue officer at Globalization Partners after spending about three decades doing all types of strategic work across all different kinds of markets. I’ve learned to expand globally and really have a lot of fun doing it. I’ve worked with AMEA, Latin America, Asia all through India, and it is quite an experience to expand globally and to really see your market share change. So the question is, why would you expand globally?
[00:01:17] Despite recent economic changes, the global marketplace offers unprecedented opportunities for organizations wishing to define their next chapter, companies that develop new markets and invest in new assets to better than companies that acted too defensively in the face of an economic downturn. Focusing on the home market works well for many companies because it involves less risk than international expansion, but expanding globally helps create powerful international brand recognition. When that happens, audiences all over the world become familiar with the startup and its products, which can help boost sales, drive word of mouth marketing and expand potential markets even more. Of course, one of the primary reasons startups expand internationally is to increase their revenue. The right research and planning startups can bring in substantial revenues in new markets revenues which more than make up for the increased costs and risks of operating internationally. Successful international expansion can help startups solidify their financial footing and set themselves up for steady profits for many years to come. The increased growth that comes with international expansion can dramatically improve startups long term outlook. One example, a McKinsey study found that companies that had attained 60 percent growth by the time their revenues reached 100 million had an eight times better chance of getting to a billion dollars in revenue than companies growing by less than 20 percent when they reached the same milestone. But even if startups don’t rise to become a billion dollar company, expanding international helps companies grow more rapidly and improve their likelihood of long term success. Finding skilled workers is essential for any startup, and an international expansion provides the opportunity to access high potential global talent. Pools of flexible, qualified and diversely talented workforce is exactly what a startup needs to remain innovative and drive growth. As business becomes increasingly interconnected across the world, tapping into these new employment markets will help establish an edge above your competition. You can strengthen your business today through a diversification strategy and beyond beating the competition. It gives you an advantage on any challenges. The future will bring multiple products and services in more than one market, meaning a diverse stream of revenue. Access to numerous markets and consumer bases also means you’ll have greater visibility into trends and more insight that can be gathered for future product development.
[00:04:36] In a study on which companies bounce back the fastest after a recession, Harvard Business Review stated that organizations that struck a specific offensive and defensive balance in the face of the economic downturn had the greatest chances of success on the other side, in particular, companies that defensively cut costs, improving operational efficiency versus just reducing headcount, and also pursued two offensive strategies. Developing new markets and investing in new assets did markedly better than companies that acted too defensively or didn’t fully maximize their opportunities.
[00:05:21] Your competitors won’t stop. New research released by Globalization Partners and CFO research indicates that most businesses are undeterred by the impact of covid-19 and still moving forward with plans for new or expanded international operations. Most of the surveyed executives say covid-19 hasn’t forced them to shut down their international expansion plans. Forty five percent were either currently expanding globally or delaying their global expansion for less than a year, and nine percent were in a year long holding pattern. We found through the pandemic that the initial reaction, reactions were stopping and not moving forward, but within a month, things changed. And within two months, we found the activity as frenetic as usual.
[00:06:21] So the talent landscape has changed and you can find the best person in the world now for the job.
[00:06:30] The pandemic has unleashed the world’s most massive remote working experiment upon us, for example, the British Office for National Statistics released data from April 20 20 suggesting that approximately 50 percent of the UK workforce have been working remotely versus 30 percent in twenty nineteen. A recent study by office space platform Hubble shows that we may only need thirty four percent of the office space we had before, with employees valuing the lack of a commute, financial savings and spending time with loved ones. At the same time, over 50 percent of respondents to the Founders Forum report state productivity has increased due to working from home.
[00:07:23] A recent survey by TWC found that after covid-19 executives expect that a staggering 89 percent of their workforce.
[00:07:34] We’ll work at least one day of the week remotely, that means that managing a team remotely will become the norm.
[00:07:44] According to one study, remote employees work one point four more days per month than their office based counterparts, resulting in more than three additional weeks of work for a year. I’m sure many of you are experiencing just that right now in your organization.
[00:08:05] All of this data means that your hiring strategy should change to the future is here a future where borders, both national and international, won’t be obstacles for growth? Your work force will no longer be limited by your location. A remote workforce enables you to sell into new markets, expand your global footprint and increases your ability to diversify, diverse companies are significantly better positioned to capture new markets, while a diverse management team can boost revenue by 19 percent.
[00:08:43] Welcome to the era of global talent, expansion and growth are not only about increasing your market share or diversifying investment, it’s about getting the best person for the role, no matter where they live. So where are companies looking to grow?
[00:09:06] Research released by Globalization Partners and CFO research indicates that the most popular region for adding are expanding operations outside North America was the Asia Pacific region, excluding China targeted by sixty five percent of the executives interviewed. The Asia Pacific, including China region, was targeted. 58 percent of the executives APEC or Asia Pacific is made up of East Asia, Southeast Asia, South Asia and Oceania, India.
[00:09:45] And we’re finding our customers are moving into Australia, Thailand, Singapore, Korea, Japan, Malaysia, India and Sri Lanka really has opened up a world of countries for us and our customers.
[00:10:02] As is doing business in any global country, rules, benefits and customs vary in each market. And APEC, given the diverse nature of the region, which typically spans from China to Australia, will face different challenges depending on the country you choose for your country’s international expansion. There are nuances almost on a country by country basis, language processes or recruitment seasons, varying levels of appetite for technology and extreme demographic. Given the high variance across each borderline, we highly recommend working with an international expert, someone that is an expert in your target countries, legal requirements and country and culture.
[00:10:54] Where are some other companies growing? Well, the highlight countries specific of Poland, Southeast Asia, Portugal, Ukraine. So Poland has become a hotbed, a hotbed of tech talent and one of the biggest hubs in Europe for global tech companies. Poland is home to over 100 colleges and universities, and there are approximately one hundred and forty thousand graduates enrolled in engineering courses. Ukraine’s talented workforce is attractive to many Fortune 500 companies, over 100 hundred organizations like Samsung, Google and Microsoft, higher R&D teams in cities all over the Ukraine. The IT industry is expected to reach five point four billion in twenty twenty, thanks in part to the country’s emphasis on developing its students STEM capability, the talent pool includes approximately one hundred eighty five thousand IT specialists. You know, in Southeast Asia, the market is enormous, more than six hundred and fifty million inhabitants live in the whole region, but six countries make up for 95 percent of the overall Southeast Asia GDP, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Just a decade ago, four and five Southeast Asians had no Internet connectivity. Now, 90 percent of Internet users in the region connect to the Internet using their mobile phones.
[00:12:42] So now moving on to the common roadblocks of expanding internationally.
[00:12:50] Language barriers on the international market can lead to a host of issues such as miscommunications and loss of nuance during essential dialog. And though English may be the lingua franca in many areas of business to find lasting success in international markets, most startups will have to contend with local languages. Doing your best to learn and communicate the local language can help you in these areas. It also demonstrates your interest in and respect for the local culture and hiring expert translators and staff members who speak fluent English help streamline communications. Cultural differences can cause misunderstandings and can even cause products to miss their target in the market. In a culture that prizes tact, a brutally honest management style is unlikely to be effective in a culture with a community focused marketing, highlighting individual achievement and worth may fall flat. Thorough research into cultural differences can help a company improve its sales and marketing strategies and provide a collegial and welcome workplace environment. The logistical challenges of expanding internationally can be daunting, especially of first.
[00:14:23] Startups will need reliable ways to transport their products, as well as strategies for navigating bureaucratic and legal processes such as taxation, rules and regulations, banking and more, and startups may not always have sufficient staff to tackle these challenges. But making sure they have experienced knowledgeable teams in place to handle logistical issues is one way startups can help themselves succeed in global markets.
[00:14:56] Having the tools and foresight.
[00:15:00] To create sound logistical strategies is vital, expanding internationally entails numerous logistical and management challenges. These can include navigating different laws and regulations, optimizing products to fit the new market, developing local sales and operation teams, and finding ways to handle human resources challenges such as recruiting, hiring, paying and providing benefits for personnel in the new market. For example, click the mentions, a marketing automation software company tried to expand into new territories by establishing their own local entities anywhere they could, but soon they realized that going it alone meant a lot of time spent on research instead of execution. If you also want to avoid such headaches and accelerate your international expansion, you could do a quick dimension’s ended up doing working with a global EOA like Globalization Partners. It’s often helpful if at least one member of the startup has experience in starting and running another successful company, startup. Veterans provide invaluable guidance along what can sometimes be a grueling and bumpy road. Startups with all new members of can flourish, of course, but it’s beneficial to seek advice from experienced mentors, especially to navigate the complexities of international markets.
[00:16:34] Startups with mentors from three and a half times faster and raised seven times more money than startups without them. Marketing issues in international markets are often closely aligned with language and cultural barriers, techniques that work persuasively in one market may seem overbearing and another, or the values to which a specific marketing strategy appeals may resonate hollowly in other markets. In international markets, where language and culture differ from those in the home market, market research is indispensable. It allows startups to tailor their strategies to the needs and desires of their new audience.
[00:17:22] Forbes suggested product market mismatch is one of the primary factors that prevents startups from succeeding internationally. Many startups work feverishly to develop products that fit perfectly in their home markets to discover they do not translate as well internationally. Yet if startups develop products with more general appeal, the products may prove uninspiring in the home market because they’re not differentiated enough to hit. Their startups can help themselves resolve this paradox in part by performing through market research and determining which potential markets share common needs. That way, they can define and tailor products to their potential markets from the beginning.
[00:18:15] A startup office internationally comes with its challenges, startups expanding globally will need to handle recruiting, onboarding, training, payroll benefits, terminations and more, while also trying to devote their energy to areas like sales, marketing and research and development. Attempting to acquire the necessary knowledge and skills to handle international human resources is one way to deal with this challenge, and creating a subsidiary in the new market is another.
[00:18:49] But both solutions come with drawbacks. Partnering with the local employer of records is an efficient, reliable and cost effective way to handle staffing matters smoothly. Well, how long will this take? Well, global expansion had been or was expected to be a long process for most of the executives in the CFO research study. Eighty six percent said their global expansions took or would take at least five months. That figure included, amazingly, forty two percent who clocked the process up more than a year. Monitary control policies in some countries can make something as simple as establishing a bank account into a six month ordeal. Before a company can hire its first employee in a new country, it may have to obtain business registration, licensing, tax I.D., payroll registration and bank accounts. So what do we do to help to accelerate international hiring?
[00:20:00] First thing, choose your expansion market wisely when you’re looking to expand your startup in a foreign market. Do your research before making a giant leap carefully. Consider where you might already have business contacts, where the local infrastructure is robust enough to support your operations. What markets might fit the best, best might fit the products you’re offering where you’d best be able to navigate local regulations, laws and tax codes.
[00:20:37] And I think another one is, have you sold into that market from your home country already?
[00:20:45] No, to start small, when you start expanding your startup into international markets, it’s tempting to make grand, ambitious growth plans, but it’s often best to take measured, manageable steps first, perhaps by experimenting with a few sales before opening a lavish new in country office staffing. That new office, for example, is likely to involve many logistical challenges, such as coordinating with remote employees, working across different time zones and negotiating different management practices. And rules, it may be best to start with a few employees first so you can learn the new techniques at a manageable level before hiring more substantial staff.
[00:21:39] Three, get help with local laws.
[00:21:43] Local laws and regulations in your new markets are likely to be intricate, complex and different from those you’re used to in the United States. Taxes will differ as well.
[00:21:57] And if you fail to comply with local tax codes and regulations, you may face stiff penalties.
[00:22:04] Seeking help from knowledgeable, experienced professionals who can navigate the maze is often crucial to success.
[00:22:16] Or learn the new culture, the local culture.
[00:22:21] Knowing the ins and outs of local culture is one of the first steps to success for your startup’s international expansion, how professionals work, communicate and interact can vary drastically across different cultures. And knowing how to adapt your management styles to accommodate their preferences is vital for fostering a happy and productive global workforce. Training your international management team. To truly understand their workers unique cultural differences shows you’re a company that cares for its employees helping to create a culture of unity and dedication.
[00:23:07] And lastly, I mentioned a couple times is perform market research, learn about the new market. With market research as well, many research helps provide comprehensive data backed information on what different demographics within the new market. Might value and buy it can also help you spot trends and make informed decisions about what methods of marketing and sales will be most effective.
[00:23:40] Of course, we have to learn from our mistakes. When it comes to international expansion, some bumps in the road are to be expected, especially for startups, when things go wrong. Remain flexible and turn mistakes into opportunities to learn and grow. By doing so, you’ll help shape your company into a more resilient organization with the adaptability and know how to succeed internationally.
[00:24:10] So why would you choose Globalization Partners?
[00:24:15] Globalization Partners is an employer of record. With owned entities around the world, we help companies expand internationally without having to establish a local entity, we cover all issues related to compliance, including taxes, benefit structures and payroll. Work with us and we will have your employees on board in the countries of your choice in a matter of days. We are the most trusted brand in the international business services industry, having built our in-house infrastructure to meet the legal requirements of our Fortune 1000 clients. Globalization Partners helps any company expand into new international markets within a few days. Finding recruits globally and without complex international tax and legal planning. Use of this strategy in which our clients choose the candidate in any country and we put that person on our own country, compliant payroll enables companies to rapidly hire global teams in multiple jurisdictions. Our platform is quickly becoming the norm when it comes to smart international business practices. Nelson Hall, a global independent research firm, completed its inaugural employer of record industry assessment. The Results Globalization Partners is the industry leader in the overall market segment. This evaluation found globalization partners excelled in the following key areas deep global HRR and payroll compliance expertize supported by established legal entities, highly automated modern proprietary technology and simplified user experience. Enhanced compliance data and security due to its low reliance on third parties.
[00:26:31] And outstanding client and employee experience maintaining a 97 percent client satisfaction.
[00:26:44] With us, you sign an agreement for global ERP, our services in any of one hundred eighty seven countries. We provide a locally compliant employment contract in the country you’re hiring in customized with your offer and we explain the local benefits and labor laws. We add the employee to our already registered local payroll and set up locally required benefits. The employee is assigned to work full time for you while we take on all legal employer responsibilities.
[00:27:21] You have easy access to all employee information via our platform, we invoice you once a month and it’s simple and straightforward, so start to finish in just a matter of days in the country of your choice.
[00:27:40] So with that, I’ll say thank you so much for your attention. We’re happy to answer any questions over the coming days. You can reach out to us at Globalization Partners and you can reach out to me via LinkedIn at any time as well. Thank you so much. And very excited to be able to share this information with all of you.
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