I have some catching up to do -- blogwise. The first order of business is to get back to a post on China Law Blog from last month entitled "The China Ready Company -- The Basics". In the post Dan Harris does his usual astute job distilling the critical points from an article on China for American business people -- in this case a piece from Upsize Magazine by Kent Kedl, founder of Technomic Asia.
In the underlying article, Kedl advises almost any company to get into China, even if it's "kicking and screaming". He dispenses some essential advice, however, to make sure that a company does it correctly. First, he insists that the market analysis that leads a company into China must go beyond the number of people who live there. As quoted in China Law Blog, Kedl bemoans the company that "went in thinking 1.3 billion people is a market. It's not. It's a population."
Both Harris and Kedl make the important point that, while large companies might have the wherewithal to lose millions experimenting with the best way to implement an international strategy, small and medium size companies "have one shot". As Dan Harris puts it, if done incorrectly, small companies can "lose their entire business, not just their new foreign operation. . . [They] have far less room for error."
The second critical piece of advice in the post is that there are more than one way to go international. There is a wide range of vehicles for entering international markets including sales through export facilitators or existing U.S. distributors with international channels, independent sales agents, sales reps and other employees on the ground, partnerships or joint ventures with local distributors abroad, and wholly owned foreign manufacturing and distribution operations. Foreign operations may also open up different alternatives for technology deployment that don't exist in a company's domestic market. As Kedl points out, "a company might have an old technology sitting on a shelf that is obsolete here but not necessarily there."
All of this leads to Kedl's third piece of advice -- "Don't latch onto one particular tool and call it a 
strategy." At the risk of being repetitive, it's worth repeating Kedl's descriptive analogy as to why this is so critical. Regarding a client who had latched onto the idea that he wanted to do a joint venture in China without first doing the analysis as to how his particular business might best enter the market,Kedl concludes "that's like my saying, 'Where are you going on vacation?' and you say, 'I'm driving a Buick." Sounds pretty dumb when you put it that way.
So the reason I wanted to do a post keying off of the China Law Blog post (aside from the fact that parroting Dan's material can't help but to make one sound more insightful than they otherwise would be), is that while Kedl focuses on the right way to enter the Chinese market, there is in his advice the nugget of a more broadly applicable set of rules for any company thinking of going global. I would summarize those three simple rules as follows:
- Do the market analysis and due diligence up front in order to select the international market which is most likely to be a success for your company's product or service;
- Once you've decided what market you should enter, go about it in a way which is most likely to achieve your sales diversification and growth objectives in the most profitable way possible; and
- Let your international market entry and development tactics be driven by your overall corporate strategy for sales growth and profitability -- not the other way around as seems to happen so often.
After all, if in the end your foray into international markets does not make your overall business more successful, then it is unlikely that your international ventures will be deemed a success. Whether your first inclination is China or India or Mexico or the EU, abide by these three simple rules and you will greatly increase your odds of finding success abroad.
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