It is the time for SMEs to go global

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Writuparna Kakati | 24 Feb, 2009
Do you want to go global? Your business is located in this country, you have invested a lot in people and talent, and you have a competitive advantage in this market. So, why should you go global?

Small and medium businesses (SMEs) often think that the presence in the home country is enough. But is it enough? Eventually they will have to compete on the same field with global competitors and at the high-end of the value chain. So, they need to break out of the belief that going global is unnecessary. At the initial stage of development, it is okay. But as a business grows up, it needs to prepare itself to take the plunge into global business.

How can you sell your product to six billion people on the planet? The first stage is having a product or service that works both at home and abroad. Products or services need to be modified in a way that suit tastes, regulations and customers' requirements in the international market. To do that they can start the process observing other domestic or international companies which have honed specific industries to create their identity on the global map. For example, a manufacturer in consumer electronics and automobiles can observe the expertise of the Japanese companies in the field.

Another important factor for global market preparedness is to modify the company workforce. Here, we can again consider the example of Japan: the country started making a place for itself in the international market only after the companies in the country began hiring a considerable number of foreign talent. In contrast, Chinese companies still face a dearth of superior talent at the top managerial level due to their unwillingness to hire foreign employees.

As a businessman, you need to have some special skills to be successful in the global business environment. What are these skills? How they can be acquired? These are some most important questions for a business entrepreneur, no matter whether the business is small, medium or big. Specific technical and functional skills are necessary for business entrepreneurs before entering the global market.

There is no mathematical theory about operating your business in the international market. But you may find the following 'rules' very helpful while shifting your focus from local to global-

Company wide commitment: It is a must for business success at the global market. Make every employee from all departments feel that they are a part of the mission. Divide responsibilities carefully and strategize responsibilities for different departments like sales, purchasing, production, advertising and shipping.

Market research: Market research is a very important factor in international business planning. It refers to the gathering, analyzing and interpreting of information about customers, target market, market niches and competition, and the industry in general. As international business involves a lot of complexities, it is advisable to do in-depth market research before entering into an overseas market. Taking assistance from a reliable market research firm often proves very beneficial in overseas market research.

Collect information: Keep yourself well informed about the industry. Try to delve deep to understand the preferences and attitudes of customers, competitors operating in the industry, customs and political influences, etc. Try to have a total picture of the industry. It will help you to define and evaluate your overseas business strategies. Otherwise, some other players will live your dream in the future.

Take moderate risk: Modern day business is complex and it is not possible to be perfect always. You may not get the whole picture, you may lack some information and there may be unclarity around objectives. But you need to take small steps forward in any situation. You have to able to differentiate between stupidity and bravery, and take moderate risks keeping up speed and acting swiftly.

Create strategies: Business leaders must be able to create strategies, put them into plans and act accordingly. You need to identify opportunities and threats, strengths and weaknesses, select focus areas and think long-term. The competition in the global market is getting stronger everyday and learning the methods for shaping strategies is very important. Plans without actions cannot succeed.

Execute leadership: What is leadership? It is a process by which a person influences others to accomplish an objectives. Leadership attributes such as values, ethics, knowledge, and skills help leaders to carry out this process. In business, leadership helps to motivate employees, help them understand the company's overall business strategy and how they contribute to achieving the desired objectives.

Be a visionary: You must be able to create visions in a global environment to pave your success at the global market. Be positive and make a future plan. You must see yourself in a positive situation in the future. A vision should carry a statement - it must be a dream for future that is the sum of current facts, hopes and opportunities. An entrepreneur also needs the ability to create a strategy and plans that support his vision.

It take serious investment of time and money for going global. Small and medium companies have to mange adequate financial resources to spread its operations abroad. In addition, effort in market research, advertising and promotion, logistics management is required to turn a small business into a world-class operation. Plus, export companies also need to have in-depth knowledge of international payment methods and different country-specific regulations.

SMEs should stop thinking that their presence in the home country is enough. Due to decreasing trade barriers, the world of business has been changing fast into a single global market full of fierce competition. Therefore, businesses need to acclimatise themselves to the global mindset, and they must do it fast as globalisation is here and now.