International growth (or export growth) is one of the most exciting and revenue-generating growth strategies. It requires certain homework to be done. Here are the elements of international growth planning:
- Foreign Market Research
Research your target country and market. The purpose of this research is to identify the presence and the number of your clients in that market. This is a key finding that is absolutely necessary to set financial targets and understand your return on investment in international growth. You need to focus your research on target countries’ economy, political environment, geography, demography, legislation and culture, and also on target market size, market trends, local and global competitors, local customers’ behavior, local industry legislation, local suppliers and distributors, and the infrastructure. The second important goal is to identify what are the requirements of your potential foreign clients to your product or service (both cultural and legal). Knowing that you can effectively adapt your product or service to clients’ needs and better reveal your advantage.
- Setting Targets
You already know how many clients you may have abroad. In order to set the target, you need to know the price, that you will set on your products, and realistically estimate the market share, that you will be acquiring over time. There are 3 principal strategies to come up with export price. Once all components are in place, multiply price to the number of products to the share of clients that you target. This is your target that you will compare with projected costs of international expansion in order to calculate ROI.
- Sales Plan
Whether this is B2B or B2C sales, there are standard ratios of sales planning that are applicable to both domestic and international sales. Those are calls-(emails, ads, visitors etc)-to-appointment and appointments-to-sale ratios. You can take your domestic sales statistics for planning purposes. Note that because selling abroad requires knowledge of foreign languages, customs and cultures of your clients from your sales team, you must reflect a learning curve in your plan.
- Production Plan
Once you know how many products you want to sell, you know how many ones you need to produce, that equals to the number you want to sell plus the inventory, appropriate for your industry. Based on this number and your productivity indicators you determine how many equipment, area and manpower you need to add to produce this amount of product. The same way you determine how much resources you need. Make sure to verify with your suppliers that they will handle the increase of your demand in resources.
If you are in the services industry you may apply a similar approach based on hours that you will spend performing services for foreign buyers (both domestically and abroad). Use this number to determine how many people, equipment and territory you need to add to achieve international goals.
- Marketing Plan
Put in writing everything that you learnt from foreign market research. State specific requirements for the product, including labeling, packaging and compliance requirements. Determine its price on the target markets. Identify the best marketing and sales channels for each market. Make sure all 13Ps are captured, see the detailed export marketing plan structure
- Action Plan
Now when you have carefully researched and planned all areas of growth, and have management commitment, start planning particular activities, such as finding partners or buyers, attending trade shows, purchasing production equipment etc. Develop goals, milestones, tasks and assign resources to implement them. Your performance indicators are your targets.