WHAT DOES IT TAKE TO SUCCEED?
Going international will take time and resources. It will require at least the same thought and preparation that would go into product development.
Most software companies have a comprehensive product development plan that takes them through a logical process:
- Concept – establish objectives
- Feasibility analysis – will it work?
- Design document- how are we going to develop the product?
- Programming – alpha and beta versions of the product
- Testing- measure the results against the objectives
- Product enhancement – improving the product to gain market share
Going international should involve the same level of planning and resource commitment. While developing a superior product is the goal of every company, developing a superior distribution network is the key to a successful international program. Everything else being equal, superior distribution will always beat a superior product, and there are many examples of well-known software companies that have become dominant players without having the best technology.
There are many methods for creating international sales, and a company has to decide what is best for them and their technology. Options can include: selling direct, engaging marketing partners, using local resellers, finding distribution partners, or establishing a relationship with existing software companies. While some methods tend to be more successful than others – a great deal depends on the type of technology being sold, the nature of the market where it’s going to be sold and, of course, the company itself.
Invariably, however, regardless of the method of entry, companies tend to underestimate the time, cost and/or internal resources needed to successfully implement whatever strategy they have chosen.
The internal preparation needed will depend greatly on the market-entry strategy. As an example, here are the top priority items for developing an international reseller channel.
- Clearly articulate in writing your opportunity from a reseller’s perspective (information about your company, your market profile and product)
- Come to conclusions on strategic considerations
- Initial target markets (what countries, what cities, how many countries, in which order)
- Realistic objectives for those markets (you can’t grant or deny market exclusivity without having this)
- Pricing and payment policies
- Support requirements (technical support, marketing support, training etc.)
- Hiring an international manager (resist the temptation to “over-hire” for this position)
- Technical issues (what needs to be done to the software to make it acceptable to a local market – keeping in mind, translation is not always needed)
- Reseller manual
- Reseller technical and sales training
- Letters of intent and contracts
It is easy to blame the failure of international business ventures on cultural differences. However, we have found that good, sound business practices usually transcend cultural differences. Be a good partner, and your international partners will help you succeed.
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