When launching a new company, one of the first decisions you’ll face is whether to first target a global market or a regional one, but have you ever realized that a third option exists, a multi-local strategy? See, 20th century globalization prompted trade barriers and boundaries to increasingly recede following the end of WWII. Since then, the movement of goods, money, people and information has become more fluid today than it ever was before. In our modern digital economy, the privilege of attacking a global audience is no longer granted exclusively to large enterprises with deep pockets. Nowadays, SMEs and startups, regardless of their location, can become global players. In fact, we even see startups targeting a worldwide audience from day 1, otherwise known as “global from the start”. So now that it’s almost 2017, isn’t it the obvious move for your business to “go global” as well? Not so fast.
A brief history lesson
First, let’s take a look back and see what we can learn from the past. At the start of modern business, industrialisation and taylorism dominated. These early corporations called for a ‘standardization’ of their products and services in order to reduce costs without sacrificing quality and, thus, increasing profit margins. This actually worked very well and many of today’s big players were born during this era – Coca Cola, General Electric, and Ford to name a few. With the ‘Americanization’ of the western world through the dominance of Hollywood movies, music, and TV Shows, amongst other trends, a cultural homogenization process began. On one hand, this allowed the old strategy to thrive, but on the other, demand began to grow for more personalized content, products and services as people felt like they were losing their cultural identity.
This kickstarted the so-called ‘glocalization’ strategy which can basically be seen as a balancing act between both worlds, global and local. Companies such as Unilever, McDonald’s and Dell mastered this art by following the now famous mantra “think globally, act locally” and positioning their global brands with country-specific caveats. Remember Vincent Vega schooling Jules why the McDonald’s Quarter Pounder is called the Royale with Cheese in Paris? That famous scene from Pulp Fiction showcases a great example of glocalization.
Are global and local mutually exclusive?
However, today we face a new trend. As highlighted in one of the best TED Talk’s out there, “Don’t ask where I’m from, Ask where I’m a local” by Taiye Selasi, the idea of having one general and dominating culture, origin and value-set is increasingly obsolete. In the EU, many people, especially millennials, would not simply state that they are French, German, or Polish, they would also say they are European. Today, hundreds of millions of people study, work, travel and live abroad. They might have parents from different countries, speak multiple languages and even think of “home” as several different places. As a result, the question of going global or local doesn’t make much sense anymore. Whether you target every country or only one country, you will need to act and position your brand with multi-local mindset either way.
The challenge of going multi-local
The difficult part of being multi-local is that while you might do a good job in your home countries (remember, you can have more than one home), once you expand into new markets it becomes increasingly complicated to replicate your business model. In a way, it’s similar to the Champions League in football – in your own home stadium you’re familiar with every inch of the field, you’re accustomed to the climate, acclimated to the time zone, used to the local food, and you can sleep in your own comfortable bed.
Not to mention you usually have the screaming fans at your back, not in your face. However, when it comes to away games you need to travel, overcome language barriers, stay in unfamiliar hotels, and you might not even understand what food you’re ordering before heading into a stadium full of people rooting for you to fail. Needless to say, when you have home field advantage it’s much easier to succeed. When you go abroad, you’ll need to make adjustments.
The easiest approach and the one most likely to succeed is to get help from your current network. You may already have contacts in the market that you’re targeting so you can hire someone that you trust. However, chances are fairly high that you won’t have contacts in every corner in the world. In these cases, you’ll need to source local talent to support your expansion strategy.
Selling, marketing and recruiting is varies greatly from city to city and across cultures. On top of that, you must navigate a maze legal pitfalls and comply with regulations that are changing constantly, especially in Europe. Sure, you could try and learn all these characteristics and rules for yourself, but even if you somehow studied and understood these factors for all of your focus markets, you’d always be playing catch up. It’s like playing every football match with only 9 players. In the end, hiring external help is inevitable, but finding the “right” help is the real challenge.
So how can you find someone trustworthy to support your company’s growth? There are a few options: gamble, partner-up, or do-it-yourself. Each choice has its perks, but neither is without its flaws.
Roll the dice
The first logical solution seems easy and simple, but it’s probably not what you want to hear. You will have to gamble. Since you have little or no idea about the market, you will have to roll the dice if you want to hire a local partner. However, there are no guarantees. It’s like buying a car for the first time without having a clue about the negotiation process. A nasty salesperson may convince you to purchase a lemon at triple the market rate!
Every time you talk to a headhunter, request a quote from a marketing agency, or meet with a lawyer, you’re rolling the dice. When it comes to blindly choosing service providers, sometimes you eat the bear, and well, sometimes the bear eats you.
The second option is to contact the local chamber of commerce or government-sponsored business services and see if they can recommend anyone in your target market. They will definitely want to help you, but they’re usually quite slow as the public sector isn’t exactly known for their efficiency. Relocation services can be helpful for non-business related needs (ie: housing, mobile phones, car rentals, office space, etc), but they lack the specialization necessary to assist with your particular commercial requirements.
Assuming you have a great business that is ready to expand right now, you won’t want to waste any time and risk losing ground to the competition. Thus, the public administration option is usually a non-starter, literally.
Finally, you can simply do the research yourself and take on the challenge of learning the new market from scratch. On the plus side, you may get to work with some fantastic people and you’ll retain all that acquired market research. However, hiring full-time employees during the transition stage can be an expensive endeavor. For starters, the people that will execute your market entry are unlikely to be the same profiles necessary to scale the business once it’s up and running. Furthermore, the wrong hire can lead to breaches in security or irreparable damage to your brand. Not only can you burn your bridges before they’re built, but you sacrifice your comparative advantage.
Warren Buffet may be willing to mow his own lawn, but it would be prudent for him to hire landscaper at $15 an hour while he earns $1,500,000 per hour making wise investment decisions for Berkshire Hathaway. In most cases, it’s more economically sound to hire trusted experts in the local market, while you focus on what you do best: growing your business.
What about Mercurr?
Luckily, there are millions of amazing entrepreneurs around the world who, at this very moment, are developing solutions to the most challenging problems we face in our day-to-day lives and professional projects. The same holds true for going multi-local. As we have just shown, paying the price for choosing the wrong partner or doing it yourself can have catastrophic effects on your expansion and negatively impact your bottom line.
That’s why we built Mercurr: the one-stop-shop for hiring qualified professionals in Sales, Marketing, PR, Talent Acquisition, and Legal & Accounting for every major market around the world. Best of all, it’s free for expanding businesses.
We’ll be covering this theme of going “multi-local” vs “going global” a lot as we feel it encompasses the best possible strategy for doing business abroad. If you want to learn more about our partner network of trusted service providers or join our platform, don’t hesitate to get in touch!
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