Why take the risk to keep asking the “Should we be more global?” question at your company when it might not be well received? You might stir up the usual perceptions:
- “We already have our hands full domestically with what we are really good at.”
- “We still have a lot of domestic penetration and coverage to achieve.”
- “We do have a couple of international customers but they came to us without any proactive effort on our part. Plus, we sold to them on the domestic side and they did all of the heavy lifting.”
- “We don’t have the time or the budget to develop an international strategy right now.”
- “Remember that bad experience with that international deal where we got burned on currency and taxes? And the CFO said, “Watch my lips: No More International!”
- Our CEO says, “We are not going to ramp up and spend money on multilingual and multicultural salespeople, bilingual contracts and labels, and we are certainly not going to open an office in Beijing!”
Given these types of responses, why would you want to take risk and become the champion who keeps pushing the big global ball up that hill in your company?
Here’s why: It’s like the “Emperor’s New Clothes.” You don’t want to be the company that wakes up one day to discover the following—what your competitors learned a long time ago:
- Your customer base is growing rapidly OUTSIDE of the U.S. In fact, 95% of “consumers” are located in other countries, and it is estimated that 81% of the global economic growth in the next 5 years will occur OUTSIDE of the United States. (Source: World Economic Outlook, International Monetary Fund, 2015).
- The U.S. middle class is rapidly becoming a smaller percentage of the overall global middle class (i.e. that class of people who buy material goods, products, and services). In 2009, 18% of the middle class was located in North America, 36% in Europe and 28% in the Asia Pacific region. Within the next 14 years, it is estimated that the share of global middle class statistics will look vastly different: 7% in North America, 14% in Europe, and 66% in the Asia Pacific region. (Source: Karas and Gertz, “The New Global Middle Class”, 2010 cited in Brookings Metropolitan Policy Program, Global Cities Initiative, October 15, 2015).
- The global customer is “closer” to your business than ever before as a result of travel, technology, communications, trade agreements, and other connections that are bringing that global customer who is “out there” to your front door.
What should U.S. companies do now?
First, seek out specialists and experts in international business, and create your own resource network that your company can call upon to make business deals and global trade less complicated and more seamless.
In addition, take steps to protect the company in the key areas of intellectual property, import/export compliance, international tax considerations, the reallocation and relocation of personnel if needed, banking and finance, and corporate planning (e.g., whether to form an international subsidiary, joint venture, use a distributor, make direct sales, etc.).