Fifty-two of the world’s top 100 economies are companies, according to a 2006 report by Share the World’s Resources, a nonprofit think tank with consultative status at the United Nations. These businesses did not become so successful overnight, and they did not rely on luck to make money. Focused, well-thought-out strategies play a huge role in firms’ domestic accomplishments, and even more so in their achievements abroad.
Identifying New Markets
A company cannot expand globally if it remains in its domestic market. Smart businesses must identify markets in which no competition exists. Take Honda’s story: Soichiro Honda, founder of the worldwide vehicle manufacturing company, decided to bring motorcycles to America in the 1960s. At that point, the motorcycle market had few players. Within five years of entering the United States market, Honda’s company had thousands of satisfied customers.
“To each their own” must be the guiding principle for companies planning to enter a foreign market. What appeals to one culture might not be pleasing in another society. For example, when Kentucky Fried Chicken opened branches in Japan, it offered the same foods as it did in North America. However, Japanese consumers had little interest in KFC. The company realized it needed to adapt its products to the Japanese market. To that end, KFC began selling smaller pieces of food and moved its stores into crowded areas. Japanese demand for KFC increased after the firm made these changes.
While companies need to customize their products for different markets, advertising must transcend borders. YouTube, blogs, Twitter, Facebook and other social media platforms allow users from all over the world to share content with each other. Businesses now must use advertising that has a global appeal. For the 2010 World Cup, Nike chose to air an ad across the world that told the story of soccer players from several different countries so viewers could relate.
A company can produce hundreds of successful products that thousands of people buy. However, if customers do not associate your business with your product and view your merchandise as interchangeable with the competition’s, you have a problem. Branding connects a firm’s goods or services with specific positive ideas, so consumers will want to buy your product. Royal Phillips Electronics, a Dutch conglomerate, decided to launch a branding effort in 2004. It decided to align its products with sense and simplicity. The next year, the value of the company’s global brand rose 14 percent.