Internationalization: difficult but possible

I have to say that internationalization is something that I love, perhaps because I love traveling and meeting new people or maybe because I think that we have to look at today’s world in a broader perspective or, ultimately, for whatever reason, the subject fascinates me and even outside of work I am reader books and blogs on internationalization.

Well, I want to talk about a post I read recently in a blog which I think makes a good point on internationalization, although I would like to add my own contribution. The article argues that for a SME it is necessary to have a serious plan in order to grow abroad, a plan which many Spanish companies lack, they just start selling outside with the hope of solving that way their internal problems. It is also said that this lack of preparation, give in many markets a poor image to Spanish SMEs. In other words, the post says something like, “if you do not know how to do it do not mess”. For anyone interested, find here the link to the post I am mentioning.

Internationalization of SMEs: is it all or nothing?

Given the difficulty of developing a serious plan of internationalization, the answer is not doing nothing.

Although it is a good post, with a strong point, as the need for a serious approach to internationalize, I would like to clarify that the answer is not a do nothing plan. Like any company, SMEs need to grow and today that growth cannot exclude the internationalization because if companies do not have the capabilities to grow outside the local market, sooner or later they will decrease, losing market share to more efficient competitors.

But I’m not only in favour of internationalization because I believe that burying the head in the sand is not a viable plan, is because I think is also possible to internationalize, although it is not easy, I think it is possible. I would like to put a point of optimism.

Let´s take as an example a Spanish SME, that first, it has managed to survive the crisis, this alone prove an efficient management and second let´s assume that is a manufacturer of a reasonably good and competitive industrial product. Is the moment of the internationalization? in my opinion, absolutely yes. Even if they start from scratch they should include it in their growth plans to enlarge the potential market of the company, creating in that way, value for the shareholders. How to do it? That is really complex and different in each case but I just would like to share my experience in the form of three small suggestions.

The process and the idea behind it

The countries themselves do not buy products, are customers who buy.

First, I would suggest to stop thinking in countries and start thinking in customers. I remember once, on a business trip in Russia, one of my colleagues spoke of how little he sold to Russia and how difficult it was Russia and he was speaking of the country as if it were a person. The countries, in the abstract, do not buy products, do not sign orders or pay invoices, they are customers who do and I was amused imagining the Mother Russia buying tools, which is what we were selling.

To whom we want to sell to, what and how we will do it

In my experience the first thing to do is to find out who, exactly, we want to sell. A detailed list of names. Doing other things before this, it is usually a waste of time and money.

Once the potential customers are identified, I think it is essential to verify whether the product, so good and competitive in our local market, is equally attractive to potential new customers. Continuing with the example, it is not necessary to hire an expensive consultant to conduct a scientific research, just a tour of potential customers and comparing the products what these customers are buying with ours. This simple exercise saves a lot of money, believe me.

My third recommendation is, from experience and I am sorry to say this, where Spanish companies have bigger problems: the customer service. It is imperative that, in an SME, the entire organization make the effort to give our potential customer in France or Russia a better service, than they already receive from their local suppliers. Obviously I mean not just delivery times and percentage of back orders, of course are key, but also to send invoices in the right language, with the right currency, with the correct import duties and the correct weights to avoid being stopped in customs. We must try to make it easy for the potential customer, he has to lose the fear of the complexity created to him when buying from our SME instead of the usual local supplier.