Flying high: avoiding the pitfalls of going global
Date Added: 16th January 2012 from KATABOLT
Taking a step offshore can make or break a company, but with the right help, the right planning and the right connections Kiwi’s really can fly.
New Zealand is a hotbed of entrepreneurs and innovative companies, but it’s too small to provide a market for most high-growth companies. To make it big, Kiwi companies have to step offshore, but few know what they’re doing before they head into the great abyss, says Christopher Boys, founder and director of KATABOLT, a consultancy designed to fast-track Kiwi companies into overseas markets. “Getting it wrong at best costs a company time and money they can ill afford; at worst it means the end of a dream.”
Too many Kiwi companies still rely on the old trade show or “just set up an offshore office and the world will come” mentality, says Boys, a former London IT commercial director and international angel investor. “But we know that doesn’t work for most companies. The world has changed. Internationally businesses have got a lot more slick about moving offshore, targeting their business and building up contacts before they even set foot in another market. Kiwi businesses have to step it up a notch if they want to compete.
KATABOLT has a network of more than 150 high level associates in markets as far afield as North America, Europe, Russia, Asia and Australia. It draws on the international connections made through Boys’ 20 years in international sales, his work as chair of KEA (the Kiwi Expatriates Association) Auckland, and KATABOLT’s partnership with the ICEHOUSE, Auckland’s business incubator and development centre. “There’s a big difference between getting a connection and knowing how to commercially engage a connection,” says Boys. “You have to know how to communicate with your chosen market, which market you’re after and what sort of market strategy you want. That takes time and research. But if you don’t do it and then you get introduced to these amazing connections offshore, they’ll soon realise you don’t really know what you’re doing and the opportunity will be lost.”
Alex Morcom, director of international consultancy and investment company Howard & Company says there’s many things a company has to consider when it decides to go offshore not least which market and why that market is truly the most cost effective one to target.
Once a target market’s been identified a company then has to consider how best to tackle that market: through distributors, directly or with a partner for example? The choices are many; the right decisions vital.
The most important thing, says Morcom, is to never lose sight of what it is you’re offering: what is your unique value proposition? Only then can you really start to research markets and work out what’s best for your company, he says.
The following is a summary of a detailed checklist Howard & Company uses with its own investee companies when they consider setting foot offshore:
- Target & plan - Think about the needs of different markets and invest your resources wisely for the most impact, and be realistic about how long it will take to enter a new market.
- Market research – Target low hanging fruit. Understand the size of your addressable market and what is driving demand. What pain will you solve and ensure you can articulate your value proposition clearly. And identify which partners or influencers can help you enter the market.
- Market reach – How will you reach and service customers? Evaluate the options of selling direct versus a channel/distribution model. Ensure you have the resource in place to make this happen. Build up networks. Seek advice to understand the legalities of doing business in the new market and plan what resources you’ll need to sustain growth.
- Early wins – Target referenceable customers first – they are a powerful endorsement.
- Marketing – Build an international image for your product right from the start. Use partners and networks to drive and maintain your message and build up your own supportive network of customers and potential customers.
- Guidance – Invest in good advisors and, when the time is right, consider appointing board directors with the right experience to help you make those international connections.
- Test your strategy – Make sure you haven’t missed anything. What is your value proposition? What is your real advantage? Be self critical. Watch market trends and listen to what your customers (new and old) tell you and adapt accordingly.
* This is the fourth article in a series of articles from KATABOLT for ExportNZ.
For more information
For further information on KATABOLT and how we can help please contact:
Sarah Boles
Phone: +64 9 889 0385
Mobile: +64 21 711 156
Email: sarah@katabolt.com
Article prepared by:
Lesley Springall
lesley@griffinsolutions.co.nz
Phone: +64 9 445 3541
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