International Business: Who is pursuing your best international business opportunities?
“If somebody out there in the world wants our product, let them call us.”
It may be difficult to believe that companies would hold that attitude about international opportunities but some do, insisting that international opportunities not just call or knock, but actually beat down company doors and let itself in before leaders will accommodate them and empower an executive to pursue such prospects.
In this increasingly interconnected world, headlines and articles consistently point to growing international business opportunities. Free trade is spreading from Korea and Egypt to the European Union and Georgia, thereby opening new fields of opportunity. The benefits of technology are also removing obstacles to international business.
According to Internet World Stats, 73.2 percent of Web users browse in a language other than English, and that international market is growing. In Latin American countries, for example, Forrester Research predicts online sales in Brazil will grow 178 percent (from $7.9 billion in 2010 to $22 billion in 2016), and Mexico will similarly see a 209 percent increase in online retail growth (from $1.1 billion in 2010 to $3.4 billion in 2016).
This trend is echoed in other parts of the world. Euromonitor expects e-commerce in the Middle East, for instance, to double from its current $1.1 billion per year to $2.2 billion in 2016. In China, Forrester Research predicts online sales will grow from $94.6 billion in 2012 to $159.4 billion in 2015.
Many such reports present a rather enticing view of the possibilities for online overseas expansion. Even formerly timid businesses that normally “play it safe” are approaching international growth more comfortably and view such expansion more as a necessity to reduce the risks associated with recent economic downturns. Since diversification is one of the most basic principles of risk reduction, companies are endeavoring to expand and invest in multiple foreign markets.
As businesses recognize international opportunities, they then must determine how aggressively to pursue success in these markets. If international expansion presents a company’s biggest opportunity, author and researcher Jim Collins makes a good argument for putting a company’s best resources – particularly its best people – on such an opportunity.
Collins’ popular book, “Good to Great: Why Some Companies Make the Leap and Other Don’t,” is the result of some 15,000 hours of research to extract what caused 11 companies to transition from good results to great results, beating the market by at least three times over a 15-year period. The researchers contrasted these good-to-great companies with 11 comparison companies in the same industries with similar resources and opportunities that failed to “make the leap.”
One principle Collins and his team learned was that companies making the transition “put (their) best people on (their) biggest opportunities, not on (their) biggest problems.” Although there are many things we are better off not learning from peddlers of cancer-causing cigarettes, Collins noted a very instructive comparison between good-to-great company Philip Morris International and comparison company RJ Reynolds.
In stark contrast, Philip Morris CEO Joseph Cullman decided to prioritize international opportunities in the 1960s and placed his top executive and future successor, George Weissman, in charge of growing foreign exports. Weissman was plucked from overseeing the company’s huge domestic business, which made up 99 percent of revenues, and moved to the small export division, which made up less than 1 percent of sales at the time. On its surface, the move may have seemed like a demotion or punishment to some, but Weissman performed as Cullman only could have dreamed.