Is it time to go global? Or at least do a little business overseas? Or even more likely, to figure out just what the heck you are already doing overseas? Most likely your business falls into one of those categories. (Exceptions: local service businesses, such as restaurants, dry cleaners, etc.)
Chapter 8 of a great book about economics for business covers how business cycles may differ in various countries and how those cycles will impact your overseas operations. For example, a foreign recession hurts the American country trying to sell products in the foreign market, but it helps the business that is manufacturing its products in that market for import into the United States. Why? Because the foreign recession makes labor and real estate cheaper, lowering your production costs.
If you are ready to stick your corporate toe in the water, you have to figure out what you want to do: sell products or source products. Sourcing overseas was the big growth industry for many years, but it's not such a strong value any more. (For one reason, see my blog posts The End of the China Price and China's Export Machine: The China Price is Dead.) Many businesses are also trying to shorten their supply chain, and outsourcing of heavy products in a distant land lengthens the supply chain. (See my short blog post, Nimble Management in an Uncertain Economy.) If you do want to sniff out cheaper production locations, use a consultant or advisor who knows the territory. I was able to connect a business acquaintance with a consultant with great experience in China, and the consultant's advice turned out to be very valuable.
The greater trend in 2011 will be companies trying to sell into the rapidly growing foreign economies. There are tremendous opportunities there, but a foundation of solid research is necessary for success. That and the use of local talent. We do not yet live in a single global market; don't try to pretend that we do, at least, not if you want to be successful.
Read the entire series: 11 Business Challenges in 2011
Bill, what important advice to anyone wanting to do business globally and be successful. It is critical that you understand the people, the culture and the traditions of the country that you are dealing with. One slight misstep can cost you business. On the other hand, attention to detail in client relationships can increase your bottom line. So before you stick your toe in foreign waters, do your homework on the culture.
Posted by: Lydia Ramsey | January 26, 2011 at 09:45 AM
Thanks, Lydia.
For those of you who are unaware of her work, Lydia Ramsey has spent the past year coaching high tech workers in India and America on how to work more effectively. Her website is http://mannersthatsell.com/
Posted by: Bill Conerly | January 26, 2011 at 10:26 AM