As a leader in a national market, many companies may look to expand globally. The transition to global is easier for some than others. Just because one product or service is in demand in America, does not mean that it will be the same in another country. Culture’s differ significantly, and it is important to recognize what tools are needed to be successful in a global market. If you are looking to expand globally, it is critical to learn from the challenges of other well-known businesses or corporations who have made the attempt and originally failed. That way you can avoid these issues and make an efficient transition. Below are 2 successful, well-known American companies that first struggled in the international market to help you understand the challenge of converting your business globally.
The “golden arches” are well-known just about everywhere around the globe… everywhere except the Caribbean. After many attempts, the stores initially closed due to lack of sales. According to World Press McDonald’s lacked sales in the area because of the slow economy. Because McDonald’s offers many cheap items on their menu, it would make sense that it would still thrive in a slow economy. One reason for their lack in sales could be the lack of interest in “American” food. McDonald’s failed to implement products that are more popular in the Caribbean, as they do for their other global locations. This would allow them to utilize B2B transactions and incorporate relationships with local businesses in the area. As mentioned prior, just because one service or demand is a demand in America (or other countries) does not mean that it will be in another country.
While ebay is successful in the United States, it has not been as successful in Japan. According to Forbes India, eBay launched in 2000 in a joint venture with NEC Corporation. It’s first mistake was that it launched recently after Yahoo! Yahoo! had a competitive advantage over eBay in two ways. It first introduced online auctions to Japan and Yahoo! did not charge commissions for transactions, while eBay did. Similarly, to McDonald’s, eBay failed to adjust its purchasing methods to local consumers. For example, Forbes India mentions that the practice of applying credit card information for making purchases was not popular in Japan at that time. From a B2B perspective, eBay could have utilized communication with other global businesses to provide them with more information before launching.
Why did They Fail?
From a business to business (B2B) perspective, there are many ways that businesses of any size (even large corporations) initially fail. When large businesses first move to other countries, it would make sense for them to utilize services in those foreign countries. That way they can refrain from shipping costs. To be successful in purchasing or selling, companies must utilize relationship building. Purchasing internationally typically utilizes a longer sales process and focuses primarily on relationship building when selling their product or service. As a buyer or salesperson, you should learn as much about that company and the individual’s culture as you can. The relationship with the buyer is an important priority for retaining sales in the future, so be mindful of your cultural differences. Know your audience and how to deliver your information to them. Keep in mind, across the globe, many individuals use body language and language differently. World Press mentioned that in order to be a successful company in a global market you must have “a strong local team and long-term strategy, and the ability to respond quickly to customer demands.”
In your own opinion, please comment what you think other American companies can do differently to succeed while transitioning globally in the future?