Unfortunately that’s not always the case. Just ask The Sport Authority, Hickory Farms, Krispy Kreme, Canadian Tire, Tim Hortons, or Marks & Spencer.
While all have been wildly successful in their home markets they have had their challenges sustaining themselves in foreign markets.
Yes, the majority of these brand introductions have struggled or failed due to circumstances unique to that particular brand, ranging from; management, to logistics, to consumer acceptance. There are however a couple of common missteps they all share.
They are; misinterpreting the nuances of the market and not adjusting to the local market post introduction. There is something to be said for ‘sticking to your knitting’ but not at the expense of a successful international brand introduction.
Many of these brand introductions failed because of the arrogance of corporate management thinking that “it works this way here so IT WILL work that way there”.
Toys ‘R’ Us, Walmart, Starbucks, and McDonalds are a few examples of brands that have done well by being sensitive to the barometer of the local market. They’ve done it in different ways. Some have partnered with local professionals that have track records in those particular markets, or they’ve invested in local management and given them the latitude to develop and steward the brand.
Bottom line, is that they have looked at that market as an extension of their brand and not a separate spin-off business unit.
There are a number of critical factors and a process companies looking to expand their brand internationally need to consider and undergo, far too many factors to cover in a blog.
Some of the key considerations should be; management structure (i.e. JV, licensing, Franchise, local management, etc.), product sourcing (i.e. tariffs, duties, etc.), local supplier support, local financial proforma (i.e. occupancy, transportation, labour costs to name a few), corporate taxation and profit repatriation, e-commerce equalization, climate (environmental and political), and on and on.
It’s not a simple as some may think. An introduction done well takes time. In most cases 18-36 months and 6 figures from initial investigation to the first dollar in the till.
Not done well …. …. …. … it can be like stepping into a Minefield, … .. bombs going off all around you!