The current downturn in the U.S. has made global ventures increasingly attractive -- and worth the learning curve.
The good news is that the learning curve can be accelerated. What I've discovered years ago when I first went global is this: We don't have to proceed alone.
Actually, it's smart, at least initially, not to even try. Instead, we can find simple, low-cost, convenient ways to partner with other businesses. Those alliances -- and there is an infinite number of ways to create and operate them -- have plenty of advantages.
The advantages to partnering include:
- Piggybacking on others' expertise, experience, systems [e.g. supply, manufacturing, distribution], and contacts.
- Reducing risk when entering markets.
- Positioning our business as larger than it is. Mass communicates credibility.
- Gaining influence from alignment with established brand names.
Success Story #1
It was the late 1980s. I saw opportunity in exporting foodstuffs. My initial step was to contact Mitsui and Company. I chose that potential partner because it was one of the largest Japanese trading companies worldwide. Also, it had an office here in Chicago. That office, I knew, did a significant amount of exporting to Japan. That made approaching it convenient.
My proposal was to piggyback some of my products with theirs. How I packaged my pitch was pointing out, first of all, that I had the suppliers and they had the distribution systems and the customers. Secondly, I emphasized that my gourmet line of food items would create value for their commodity beef products in the Japanese markets.
Obviously the proposition was mutually beneficial. Our strategic global alliance was successful for a number of years. During it I developed deep knowledge of that marketplace.
Success Story #2
This is a tale of one of our U.S. clients who was only doing business domestically. He took our advice about the opportunities inherent in international partnering. At the time, that client was selling a high volume of office supply parts to the U.S. branch of Brother International.
Brother, as you probably know from shopping in Staples, is a world-class manufacturer of mid-priced printers, fax machines, sewing machines, and typewriters. It also, we discovered, has an even larger "brother" called Global Brother. Why couldn't our client tap into that "brother's" worldwide distribution channel and go global quickly? It was obvious to us and the client that this could be attempted.
We coached our client on how to approach his contacts at Brother U.S.A. The proposal, we instructed him, had to be structured to describe the mutual benefit which could come from using Brother's distributions systems to market and sell our client's unique parts.
That first step led to a door opening. The door that opened was the chance to create bonds of trust with Global Brother through his contacts at the U.S facility. On that platform he was then able to explore with Global Brother what markets to enter first, how to enter them, what relationships to build within them and when to expand. His global operations grew into an enterprise more profitable than his domestic ones.
That same process of partnering, of course, can be applied to services, too -- not just products.
The bottom line on strategic global alliances is this:
Identify and document where working together vs. either company going it alone can be advantageous to all parties in the loop.
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About the Author: Global business expert Laurel Delaney is the founder of GlobeTrade.com. She also is the creator of "Borderbuster," an e-newsletter, and The Global Small Business Blog, all highly regarded for their global small business coverage.
Laurel is a member of the Small Business Trends Expert Network.