Management are often wary of setting up overseas and it requires a significant change in mindset. Tending with finite resources and a resourceful approach to play safe.
Growth sectors do drive growth! But mature markets often have as exciting yet better rooted opportunities to grow through internationalising and professionalising the business. For example 36% of Uk firms limit their operations to domestic markets vs 25% in Germany. German firms added 3x as many jobs as their UK counterparts between 2007 – 2101. (Source Warwick Business School)
Its only worth going international if the move provides a tangible opportunity to add value and capture profit. Emerging markets are doing this very successfully in the UK and Europe.
The first step to internationalising a business is professionalising the companies board and information. You have to create a secure stable local market roots before you try to go overseas. The home market should be a reliable cash cow to fund overseas activity and or mishaps. Without a solid base you run a very high risk of undermining your core business.
Icebreakers’ focus is to grow the home business profit dramatically by leveraging other products and differentiated services into the existing customer base. From this point rather like a start up you have to quantify the cash requirement to fund the international expansion and “contain the expenditure” if it goes wrong.
In terms of targets its critical to recognise the need to adjust the business model to suit the business climate and recognise the local legal structure. Collaboration is key to maximising returns to stay ahead. Leveraging local capabilities is much less risky and far more likely to be successful. JV’s mitigate the “startup learning risks” incurred reinventing a wheel at a huge cost when that investment and capacity is often available free of investment through a potential partners existing means in that target country.