Here are examples of the worst international business strategies we’ve seen.

• Follow the client — How many times do we talk to firms that decide to enter a market because their client is doing so? What happens if you lose the client? Does that mean you are stuck in Turkey with no other business? While making clients unhappy is unpleasant, and losing clients even worse, it’s better to commit to a market than just a client.

• Since we speak English, let’s start with an English-speaking country — Are we just too lazy to learn another language? Do we want to cut out a better market opportunity in an English-speaking one? It’s far better to go where the prospects are the greatest, regardless of the language spoken (most of your counterparts have some working knowledge of English anyway).

• Assume Canada is just like the United States — The first thing one may notice in Canada is that the cereal boxes are in two languages. You might hear wacky terms, such as “province” instead of “state.” Canadians prefer long-term business relations. Canada is one of the most U.S.-friendly countries out there, but is still a different culture.

• Sell out of our bag — When you limit your offerings to one or two items, you’ll fail if they new market rejects them. You must be willing to modify what you have, and adapt pricing, promotion and distribution strategies as well.

• Send the wrong people — The correct people must understand the game they’re entering. They must have enough rank and support to educate a firm and modify strategy. They must be able to deal with a country’s hierarchies and structures. They must be patient, and willing to learn. Yet they must be credible business people to accomplish company objectives. When you need a graybeard to enter a market, you send a graybeard.

• Pick the biggest market — Again, the biggest market may not be the best opportunity. You may not be able to compete with entrenched players there. The market may not have a “fair play” atmosphere. For example, Germany’s beer market is fragmented. While they may drink more beer per capita than anyone else, the Germans’ alliance is to small, local breweries.

• Sell first, research later — This can be disastrous on business trips, as you have only one chance to make a first impression. It also shows the people you are dealing with that you haven’t done your homework, and hence, aren’t committed to their market.

• Hand over the intellectual property — IP is a corporate asset, and has a value. Selling the IP makes sense only if you aren’t worried about creating a new competitor. Many firms overseas pose as buyers to get IP from their competitors. If local law mandates that your IP becomes part of a market entry strategy, then choose your partners slowly and carefully.

• Switching partners when there’s a problem — This is always difficult. It seems that in every industry, everyone knows everyone. And foreign firms and joint ventures are very visible.

If we really take our time to get to know our partners, and provide them the proper support, then there shouldn’t be a need to keep changing those relationships. And many others who know of your failed marriage may not want to work with you anyway.

• The three-team approach — U.S. firms like to send in a research team, a negotiation team and an implementation team. This strategy is flawed for many reasons: Relationship-building is a key activity to international deals, there’s no champion in-house to follow the progress and communicate effectively to the company, and it simply confuses many Asian companies. It also shows no personal commitment by any of the players.

• Find a partner who does what we do — So if the U.S. firm makes dial tones, and the Ukrainian firm makes dial tones, then adoption of the U.S. technology means all the Ukrainians lose their jobs? Better to find a partner that complements (not directly competes with) our services.

• Assume we have Europe covered because we have a person there — Europe has about 1 billion residents. And one person with a briefcase will cover it?

• Use our in-house people who know our business — They may know your business well, but do they know your new market? Do they know the players? Do they know the nuances of international market entry? Do they know how to negotiate in foreign countries? Will they educate your firm properly as to the problems they encounter and how to fix them?

• Make no investment — This is the worst of all. Firms must invest people, time, education and often money to get into a market. Firms must realize that our counterparts overseas often see us as exploiters, who know nothing of their country or culture.

Avoiding these strategies increases your chances of succeeding as you enter a new country’s market.

Technorati Tags: international business, international advice, international strategy, marketing strategy

Many firms are rushing to get their products and services overseas ‹ giving rise to charlatans who try to take advantage of the situation. Trading companies and consultants materialize that seem to be able to fix anything for you overseas.
Here are some telltale signs of fakes and frauds:

“I know everyone in China”
China has quite a few people. While the international English-speaking business community is astonishingly small, the idea that the entire country is ³covered² is preposterous. It¹s amazing how many firms fall for it.

“I have a brother in Russia”
Does this mean your brother knows how to do what we need done in Russia? And does it mean that if you have a local relative, we¹re guaranteed success? How do we verify this?

Referring to a “partner” when they mean a “supplier”
Many times, consultants will tell you all about the “partners” they have in Asia, when they’re really referring to a factory to which they’ve given work. Always ask for a definition of “partner.”

“I’m doing you a favor by taking you on as a client”
This is insulting.
All businesses need clients, and without them, there is no business. Why was this person pitching you if they didn’t want you as a client?

“My wife is from India; she can handle the negotiations”
Is your wife a seasoned international negotiator? If ethnicity and skin color alone make one an international business expert, why not hire the foreign-born waiter who served you lunch?

“I know the international market”
There is no such thing. Anyone using this terminology is expressing ignorance. Do they mean Ghana or Bulgaria? There are hundreds of international marketplaces; grouping them together just doesn¹t make sense.

Taking you into introductions too quickly
There’s an enormous relationship aspect to doing business in almost every country. Hence, the client and vendor must trust each other, as the vendor is risking the loss of long-term overseas relationships.

The one-trip promise
If anyone really can sell into a foreign market with only one sales trip, then give me their phone number. In 25 years, I’ve never seen it happen. Promising it to a client is implausible.

Working in all countries
According to the United Nations, there are 192 countries, plus 61 territories, on the planet. Hence, the notion of one “go to person” for all of these is ludicrous. While many vendors can be connected in many countries, it’s impossible to be connected in all of them.

Working in all disciplines
“International” is an adjective. Expertise has to be quantified into some type of functional discipline, whether it¹s finance, human resources, law, marketing, technology etc. You wouldn¹t send a production supervisor to market in your home country, so why would you do it overseas? Some of us can have more than one area of expertise, just not all of them.

Stating that their technical skills will transfer abroad
Selling in France is very different than selling in Chicago. Managing people in Kansas has almost no similarity to managing Czechs. People who claim their skills are interchangeable with overseas needs obviously have never worked overseas.

“My buddy at the Korean restaurant can get us into Korea.”
If your buddy is an international market entry specialist, than what is he doing serving bulgogi (Korean barbecued beef) and cleaning up with a bus bucket? How could anyone make that leap?

No grasp at all of culture
Business is about people. If you want to work with people from other cultures, then you must understand them. When culture is glossed over or downplayed, one has to doubt the success of the vendor.

Meyer the buyer
If you have a vendor that¹s been purchasing coffee mugs in Taiwan for 20 years, then use him to purchase more coffee mugs. Don’t hire him to market your product (he¹s a buyer, not a seller) or solve complex overseas issues.

Not willing to prepare and educate you
International business involves education, expectations management, coaching of executives and management of negotiations. A true intermediary will insist on doing these activities mentioned. The best client is one who understands exactly what will happen, and why it’s happening.

Trying to keep too much “mud” in the relationship
Again, when the parties don’t get to know each other, it’s a recipe for disaster. The true intermediary in international business needs to feed back market intelligence, let you know their foreign counterparts and be as transparent as possible.

It’s too good to be true
If it seems too good to be true, then it probably is. The same wisdom holds true for your domestic endeavors. When a vendor can do absolutely everything and has no limitations, then it’s a fairy tale.

Bill Decker, managing director of Partners International, which consults with firms on global business and creates partnerships in foreign countries, can be reached at Bill@partnersinternational.com.

Technorati Tags: International business, spotting frauds, business frauds, international advice

Needed for international market entry:

negotiators
researchers
translators
localisers
implimentors
strategists
finace experts
tax experts
shipping experts
HR experts
cultural trainers

Lemonade Radio is the newest training and entertaining business tool. Hear our experts talk about timeless business and marketing secrets, right at your desktop.

Many of our episodes are free!

Technorati Tags: New site, funny radio, business radio, funny talk radio, marketing secrets, entertaining buisness advice

Announcing www.awfuldeals.com

This site is about the awful business deals we see people do, and we see people about to do. All of our users have lived through awful deals, and need a place to write about them, critique them, and read the awful deals of others.
Register now for awful deals. We don’t charge, because we are awful business people.

Technorati Tags: New site, awful deals, bad business deals, bad business, gag gifts, comments on business

About the time the Soviet Union broke up (1992) every American of Russian heritage decided that they would trade with Russia. Of course, no one seemed to have any money to purchase products, so they offered a “barter deal” or a “consignment deal” The idea of consignment is that the US ships the goods to Russia. Russian distributors sell the goods in Russia, and then send the money back to the USA to pay for them.

When I told one Russian doctor (who wanted to do a deal like this) how ridiculous this was, he responded that he had a brother in Russia, and therefore I wouldn’t get ripped off. I have a brother in San Francisco. It doesn’t guarantee I won’t lose my shirt there!

Technorati Tags: Russia, barter, bartering, consignment, International business, business in Russia

The closing of American factories and the rising trade deficit with China isn’t enough. The latest spate of recalls from Chinese toy factories has led to a new era of “China Bashing.” You may remember that a similar term, “Japan Bashing,” was used in the 1980s. Someone needed to be blamed for the high trade deficit with Japan.

The mud slinging included referring to Japan’s government/business cooperation as an evil government conspiracy. Westerners complained that Japanese markets were “closed.”

The Japanese currency was blamed. Economists raced to revalue the yen, so that Japanese goods would be expensive in the West, thus less desirable.

Once the United States learned that semiconductors and microchips were being sold in the American market below Japanese manufacturing costs, antidumping measures were enacted.

However, don’t companies make a choice between market share and profit share? Why should it be illegal under U.S. laws to try to build a market?

Didn’t Bill Gates give away so much software that he then built the largest software company in the world?

Our Japan bashing culminated when a trade mission went to Japan and demanded open markets from CEOs there. During that meeting, Chrysler Motors CEO Lee Iacocca insisted the Japanese buy more U.S.-made autos. When Toyota’s CEO said U.S. manufacturers wouldn’t put the steering wheel on the correct side for the Japanese drivers (Japanese drive on the left side of the road), Iacocca said, “If you order more, then we’ll make them the way you want them made.” Of course, this made no sense to Japanese automakers, who spent 20 years researching the U.S. car market, and who still spend more than their U.S. competitors in that same research.

We’re now seeing the same arguments used to explain China¹s rise as the world¹s factory.

We’re hearing that the government controls everything. To large extents, this is true. However, the Chinese government is selling off its SOEs (state owned enterprises) rapidly to Western firms.

We’re hearing that the yuan needs revaluation. Critics of China say the Chinese market is closed. (Every market is closed unless you learn how to operate within it.) The China bashers have been fueled by recent news about lead paint (and other toxic poisons) being found in Chinese-made toys, pet food, vitamins and clothing.

There are U.S. consumer goods companies that are putting “China-Free” stickers on their products, to show there are no Chinese materials in the product.
But we need to ask ourselves some tough questions:

Are we really subcontracting to factories abroad, and then just walking away and saying, “Tell us when our shipment is on the boat?” We wouldn’t do that in our own domestic market. U.S. factories are closely scrutinized for health and safety violations, OSHA compliance, contamination, best business practices, fire escape plans and flooding, to name a few areas of interest.

U.S. companies have to spend money to be in compliance with all of these issues. They’re not doing it out of the goodness of their hearts. Going green is something we should have done 50 years ago. Let¹s not forget we sacrificed everything to make more products, cheaper and more commonly available.

So why is it shocking to us to find business practices abroad that we think are less scrupulous than ours? We’re also guilty of sending products that we find unfit to other (usually Third World) markets.

When products expire in stores (foods, baby products, chemicals, drugs) they’re supposed to be removed from shelves and incinerated. We can’t really delude ourselves into thinking that happens 100 percent of the time, especially when those products tend to turn up in Africa, South America and parts of Asia.

The latest quality scandal coming from China creates tremendous opportunities for clever professionals.

Public relations is a very small industry in China. Our large PR firms can and should be selling their services in China. Several of them already do.

Safety consulting will be a growing field. With our factories so highly regulated, every one of them should be in the consulting business. In addition to safety, they also can train Chinese factories about supply chain management, environmental protection products and services, RFID and other package/shipment tracking technologies, and quality control and other statistical testing techniques.

The weak dollar provides commodity export opportunities right now. Chinese are buying items such as wheat, cement and oil. We should be the ones selling it.

The greatest opportunity is to reform our way of thinking. Not all Chinese factories use lead paint, nor do they employ prisoners or children. The sooner we start calling these businesses by name, instead of blanketing them as “China,” the sooner we can fix the problems and appear more market-savvy.

The Colorado Rockies are in the World Series. It’s a time of joy for Rockies’ fans and all of Colorado.

While we all can and should enjoy the celebration of our local heroes, think about how other cultures and countries might perceive our enthusiasm. Such knowledge is useful to the international negotiator, as it will help you to connect better with your foreign business associates.

Europeans jest that the United States is the only country in the world that refers to a national sporting championship as “The World Series.” Simply being aware of this will help American business people bond with their European counterparts. And if you’re the first to point out this cultural nuance, you’ll get kudos from the people on the other side of the table. “The Super Bowl” is a much less ethnocentric term.

American ethnocentrism often is greeted with contempt and dismissal. In the minds of Europeans, no one country could possibly be as fabulous and incredible as the United States likes to present itself.

In business, Americans like to pepper their marketing lingo with ethnocentrism and extremes. “World’s greatest car,” “king of all beers,” “the number one golf club (which doesn’t mean best-selling)” “the purest, the best, the most amazing … ”

But when Europeans and Asians hear this language, they often dismiss it as American extremism and exaggeration. The lesson? If you down play many of these extremes, it will ingratiate you further with your foreign counterparts. They’ll see you as less excessive and more realistic.

If you look at how some of our overseas competitors advertise their products, you will see slogans (translated) such as: “The Driver’s Car,” (Germany); “One day, you won’t drink a beer, you’ll drink a Grolsch” (The Netherlands); “It’s simply just a good wine” (France); and “when you are friends, you have Meiji milk” (Japan). Notice how much subtler these slogans are when compared to: the biggest, the best, and the greatest.

We are slaves to our history and culture. Thus we’re often tainted with our own successes and interpretations when we head into overseas negotiations. Our counterparts are prepared for us to ramble on and on about our successes, and how brilliant our management is.
There are ways to avoid falling into this trap. One way to differentiate yourself is to use such phrases as:
• “This is our way of handling this situation. What is your way?”
• “This is why our customers buy from us. Why do yours buy from you?”

Framing your dialogue this way once again will distinguish you from the “world’s greatest business people” who head overseas.

Another example of American ethnocentrism is how we describe a business or business unit. Companies often use dollar figures to demonstrate success: “We did $100 million in Asia last year.”

Europeans would rather hear how many people you have employed in Europe in the last year. “We are 125 people now” would be the Swedish way of presenting success. Additionally, if one has to bring up sales figures, it’s better to do it in the local currency, as many business deals outside the United States are transacted in Euros.

“Wall Street sneezes and Europe gets a cold” goes the old expression. This is true. The U.S. financial markets have a large influence on currency fluctuations and market capitalizations abroad. However, that doesn’t mean that if American business is bad, then all business is bad. Remember that one of the reasons Europe and Asia react to Wall Street is due to the foreign investment in the U.S. market.

Be aware there’s a lot of international investment in the U.S. stock market, and the same is true for stock markets in London, Frankfurt, Tokyo, Warsaw, etc.

American humor will rescue you in a difficult situation. Americans love to joke about things they don’t understand. We make fun of every country, and we make fun of ourselves. While the humor itself will rarely translate, this genre of poking fun at oneself is an advantage overseas, especially since the American mentality is the subject of many jokes. Being able to joke about one’s own culture, and not be offended at the thoughts of others, are necessary tools for any business person.

Add a genuine inquisitiveness about the country or culture you’re visiting, and you will measure up to — or even exceed — many of your competitors, be they foreign or domestic.