Today we published the business case report for our eCommerce globalization playbook (client access req’d). In it, we discuss how to think about international expansion and how to win over executives with your plans for global domination. However, as a savvy digital business leader, you must first think through:
Is an international offering right for your brand? Business leaders are often lured into thinking that a global footprint is better than a domestic-only one, and that selling overseas is the only path to long-term riches. This is a flawed assumption. Many successful omnichannel retailers have little or no international presence; even web-only players like Zappos serve a US audience exclusively. Other retailers had a hard time penetrating new global markets and ultimately pulled the plug on their offerings. Don’t assume that having a sizeable global footprint is inherently better than having a singular focus on your own market or dedicating resources to just a few international initiatives.
Have you thoroughly assessed all of the expansion options? Never have there been more international expansion options available to eCommerce leaders. As we’ve discussed, it’s common today for leaders to mix and match a variety of approaches to new markets, ranging from international shipping to marketplaces to localized sites. Most brands will not end up with just one of these options, but rather embrace different ones depending on the market. Make sure your global business plan outlines different ways to tackle new markets and presents varying investment levels, as your executive team may prefer to tiptoe rather than run into this unfamiliar territory.
Are you truly prepared for global expansion? Most business plans in support of international expansion will include detailed analysis on the potential size of the global prize. Strategic planning teams will have poured over market sizing forecasts and debated the percentage of the market their business can hope to claim. However, it is often internal rather than external factors that ultimately foil global expansion efforts. Don’t shortchange the “W” in your SWOT analysis—this part can be the most important predictor of your global success.
Does your business plan set you up for success? Finally, digital business leaders must ensure their business plans are based on international reality and not domestic assumptions. Chances are your domestic KPIs and your initial payback period will be a poor predictor of what you’re likely to encounter overseas. Take the time to understand where the fundamental differences lie and leverage your global partners to get a more accurate picture of the global opportunity.
How have you planned effectively for global expansion?