You’ve set up and run a business successfully for some years now. The company is humming along and you’re at a loose end. Been thinking of venturing into a foreign market? Great idea! But before you get on that plane, take a few moments to read what we’ve got to say.

There are a number of challenges a company faces when it internationalizes. Managing cultural differences is topmost among them. Venturing into a foreign market without understanding its characteristics beforehand, is a sure recipe for disaster. So is introducing a product or service which has succeeded in your home country, without testing the market demand for it in a new land. Most of the time, it is necessary to tweak your business strategy to align it with the cultural values of the destination market. Don’t believe us? We’ve got a few real examples of large companies that learnt the hard way.

Do you speak my language? That’s the first question people will ask you. If your business is dependent on blue collar workers, it’s always a good idea to hire a local supervisor to manage them. Not only does it facilitate communication, especially when you have no knowledge of the local language, it also creates a comfort zone for the worker level staff. When employees feel free and at ease in the workplace, it usually results in better productivity. Companies that have not followed this policy have learnt the hard way. Wal-Mart, the all-American world’s largest retailer, entered Germany in 1997, struggled for years, and finally left the country in 2006. One of its biggest problems was a misfit between the Wal-Mart way of work, and the more traditional style favoured by local junior employees and workers. To add to that, the top management was from the United States, and didn’t speak any German. Likewise, the local employees didn’t attempt to learn English, perhaps because Wal-Mart’s official language was English, even in Germany!

What’s in your shopping cart? Before venturing into a foreign market, a company must do its homework well – and the first assignment is to understand the shopping habits of consumers. In some countries, people still prefer to shop in small outlets, and not at supercenters or supermarkets. Japan is a prime example, and you’d never guess that the reason behind their shopping preferences was the fact that the country is prone to earthquakes! As a result, people live in small houses, with minimal storage space. Hence, the Japanese housewife is not likely to load her grocery cart with a month’s supplies, as most supermarket shoppers do in western countries . In contrast, shoppers in Germany prefer large stores, with a self-service format. Just make sure you know where you’re headed.

What’s for dinner tonight? This is perhaps the most important question of all. It is well known that eating habits are the most diffcult to change, so why are we even trying? If you’re in the food business, make sure you customize the taste of your products to suit the local palate. Don’t believe us? Well, in that case why would Pizza Hut have a tandoori topping in India? Did you know when Starbucks entered France, it had to change its American-style coffee to cater to the Espresso-loving French folk?

Mind your manners. Yes, you heard us right! Cultural practices vary across countries, and gestures that are totally acceptable in one part of the world may be offensive in another. Businesses venturing into a foreign market must ensure that their expatriate staff are well trained in cultural do’s and dont’s. Extending that example, take note that certain cultures are more conservative and less prone to experimentation or risk taking. Even kids’ entertainment companies have had to sit up and take notice – when Disneyland gave its Paris amusement park a French flavor, its popularity zoomed! On the other hand, the Hong Kong population didn’t quite like the “local” character of their Disneyland!

While there is no tried and tested formula for success in foreign markets, there is an absolute rule to be followed - and that is to know your market thoroughly before plunging in. Different companies have done it in different ways – either through market research, employing the services of consultants, aligning with a local company as a joint venture partner or placing a force on the ground for several months before making any moves. Take your pick.



Hi, I'm Akhil Shahani, a serial entrepreneur who wants to help you succeed. If you like to work smart, check out http://www.SmartEntrepreneur.net . It's full of articles and resources to help you start and grow your business successfully. Please visit us & download our special "Freebie of The Month" at
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