Over the past 11+ years dealing with Brazilian, South American and European businesses trying to enter the Asia Pacific Market, we’ve seen similar practices and common mistakes in their strategies. Strategies with similar moves found on a very popular board game that we used to play growing up in Brazil called “War”, very similar to “Risk”, that consisted in dominating the world through conquering new countries.
The strategies names would vary from “Single Soldier Attack” to “Conquering the Market”. Where single soldier attacks players (companies) would send a lone soldier to explore and understand the markets, and sometimes they forget that was the primary reason to send the employee and soon enough companies would expect to have that soldier(s) to “win the country” alone.
The reasons to go international may vary and they are all valid. Richard Briggs lists the top 10 reasons: increase sales, improve profits, short-term security, long-term security, increase innovation, exclusivity, economies of scale, education, competitive strike and government incentives To know more click here.
Most companies may have already experienced new territories within their own countries – different cities and states – before trying to go to international markets in order to understand logistics and cultural differences.
However, you should ask a few questions before taking the business global or to a new market. The Harvard Business Review has studied a few questions that you should ask yourself: (Link) Are there potential benefits for our company? Do we have the necessary management skills? Will the costs outweigh the benefits? But don’t expect that there will not be a cost involved. There will always be a cost involved.
Now that we have grown up and we play real life RISK, we see some of the same patterns, the good and bad moves being used over and over again by companies with some similar background. We will discuss these strategies to understand how companies entering new markets (locally, regionally or globally) can and must improve to avoid common mistakes.
Our most exciting finding during these years is that companies with a strong military background have a completely different approach to internationalization than companies with none or minimal history of “wars”, but we will address this topic in a later article.
If you are using “wars” figuratively, better use inverted commas.
Next article we will discuss the “Single Soldier Attack”