Setting up a new business in a different country is always a tough call. Here are the 7 most imperative aspects that the CEOs should keep in mind while planning for international business presence.
The key priority of any business is always to expand the services in different countries for a great international exposure. But entering into a foreign market is always challenging no matter how popular your brand is in any country. You cannot afford the luxury of lack of research and planning since this will force your business reputation to go downside with no time. We have experienced the same with Target, one of the most well-known discounted retailers in the US. Improper planning and lack of preparation forced them to experience failure in successfully expanding their business in Canada.
Here we will focus on 7 lessons that CEOs, looking to expand their business internationally should always be careful about. In other words, we will try to learn from the failure of Target Canada.
1. You cannot afford to skimp the research process
Never ever skimp on the research about the country you are planning to set up your business. Before investing money, the business owners, the CEOs should focus on investing their time in understanding the market, the consumer sentiment, the culture and everything that can have even smallest impact on the business. And after the completion of the research, businesses should create a province-by-province business plan of growth. Target didn’t bother about all these steps and rushed into Canada with the popularity in the US.
Business owners should consider their business as a new one when entering into a new country. The popularity of another country will never work in a separate country since the culture and living style is completely different.
2. Focus on unique brand identity instead of quick business expansion
Getting associated with an already established brand in a country may prove to be effective but this too requires a lot of research about the company first. No any business will want to tie-up with a company with completely different business ideas. Target’s association with Zellers did allow them to quickly open 124 retails stores across Canada in a very short time but it made quite obvious to the consumers that the new brand will replace an existing brand and nothing else! Moreover the coveted customers of Zellers and Target were different.
If you are really looking forward to growth and success of your business, you need to establish your brand as unique and also competitive one. Offering the consumers something new should always be the key concern rather than eyeing for a quick exposure.
3. Live up to the promises your brand offer across borders
Consistency in the offerings and service is very important when you are establishing your business overseas. A very good reason for failure of Target Canada is that people loved Target when they visited the retail shop in the US for high standard products and affordable items. But the scenario was completely different when the company moved to Canada. Complaints about high price were flooding in. No matter how popular your brand in any country is, you cannot compromise with the USP (Unique Selling Point) of your business. The most positive aspect of your business can either make or break your reputation if not applied properly. This means living up to the promises that your brand offer irrespective of the geographical boundaries.
4. Focus on the customer satisfaction first than sticking to your strategy
Always put the buyer’s need first even before the system and planning and everything. You need to remember one thing that the key target of your business or any business is the customers and the revenue will come from them. So, rather than being worried about the protocols and pre-defined systems make sure that the customers are happy and satisfied. This also means that the businesses have to be responsive to all the changes.
Target’s poor supply chain performance in Canada made the situation worse for them. Most of the stores were left with empty stands and shelves. And the products that consumers were interested in were little in quantity compared to the products that were not in demand.
5. CEOs should have the ability to react quickly in negatives
As a successful business CEO, one should always be ready to confront any kind of problems in the business. When things are going wrong, the CEOs should take action immediately. If no action is taken, it sends a wrong message to the buyers regarding the company’s stand to meet the customer's’ requirements. And businesses should never stay with the impression that it will be easy to duplicate the success cross borders because of the success of the brand in any country.
Canadian consumers were keen on purchasing products from Target in the US. This impression somehow made the company think that this will be accepted in the Canada as well. Such arrogant assumptions lead to failure and nothing else.
6. Think of eliminating the cultural differences
Now, when you are talking about the overall business growth strategy in a new country, you cannot just restrict yourself to operational plan only. You cannot restrict your plan to service offerings only. There is more to this plan and strategy and that is the emotional attachment, sentiment. The executives in the retail outlets, the training employee, the operational team - everything is included in the planning.
If there is only one thing that could have saved the failure of Target Canada, it is Canadian executives. When a consumer will visit your new outlet he or she will certainly want an executive from the own place address him/her. This helps a lot to diminish the cultural differences.
7. Focus on the lesson from your failure
Ups and downs, success and failure are all part of every aspect of life. Business is also not out of this game. What makes a business successful is the approach of the CEOs towards failure. They should learn from the mistakes and work accordingly.
After the failure of the Target Canada, the CEO Brian Cornell shifted his focus to revive the US customers once again and slowly moved back home. This should never be the approach of a successful CEO. When things are not going right for the business, new plans, strategies should be implemented.
It is really very important for the CEOs to understand the business plans and strategies as well as, the culture and preferences of the consumers.
Every failure comes with a lesson. Successful people take the lesson and forget the failure. If you are planning on global exposure of your business, do keep in mind these 7 important aspects for a better growth in the global marketplace.
Prompt Assembly & Packaging Inc.