This one minute international business video discusses the top three mistakes companies make when they do global business.
Other faulty assumptions include:
Imported goods are often better.
Evidence of this is that Americans drink French water, drive European cars, wear Italian suits and buy Swiss watches. However, Japanese consumers may be concerned with how Japanese a product is. European firms may wonder about the factories that foreigners will cause to shut down. China makes its own computers and DVD players to stimulate the Chinese industry.
Money is the ultimate reward.
Many foreign business people are motivated by status, power and social responsibility. In Poland, it’s more prestigious to be a large employer than to be wealthy. The factory boss won’t fire his neighbors to make a few extra dollars.
The No. 1 assumption: “It worked in our market. It should work in theirs.”
It would be easy to write an entire column on this assumption.
We sell products in colors that are taboo.
We don’t recognize that there may be seven- or even 15-step distribution chains in some markets.
We have firms building to the wrong specifications. For example, we try to sell big refrigerators in countries that use small ones, or attempt to sell autos with steering wheels on the incorrect side. We market milkshakes with no milk in them, labor-saving devices where countries want to keep employment high and sports drinks in countries where there isn’t enough food to eat.
So, does your business model make sense for doing business overseas?