There is a moment in every company’s journey when your strategic region seems small for your business goals, which means that this could be the right moment for your company to expand globally. But, are you prepared for it? This new phase can become stressful and risky, with all the legal work and the procedures. From Luxe Talent, we recommend you to think of it as a marathon instead of a sprint. This way, you could guarantee successful outcomes.
Do you want to know how to survive the Retail game? Check this article!
1. Is your business ready to join the international league?
As the Entrepreneur recommends in their Global Expansion article, before you begin planning your expansion, you should ask yourself these questions:
- Why do you want to expand your business? If you are not thinking about long term growth, your capacities are limited and are willing to be patient, then maybe you are not ready for this next step. Also, it is good to consider your team’s opinion and commitment, because without, you are taking a risk.
- Which market do you want to expand to? You have to be clear where you want to go to determine how. Learn about the culture, their economic situation, and their behavior, since this can guide you to understand if your business will be successful there. For example, if your business sells sportswear and snow equipment, and you were thinking of expanding into Panama, it is not the best option after identifying that there is no snow, maybe Chile or Argentina could be better options.
- Are you confident in expanding to that region? If you are not comfortable with the market you are reaching then maybe you should question if it’s the correct one, and seek other options.
- Is there an opportunity to sell your product or service there? Will they buy it? It would be a risk if you invest in a new market without being aware of the local competitor and the interest from the potential customers on your product or service. If you are a fashion, cosmetics, or furniture company, you should know exactly which competitors you have and which is your value proposition that will make the difference.
- Are your potential clients aware and knowledgeable of your product or service? If your product is totally new for the region, you have to be aware that this process will take time and money, since you need to raise not only brand awareness but also of your product. You will need a very strong Marketing & PR team that knows what strategies to implement when it comes to promoting your brand and products. This will surely include recruiting new professionals who are fluent in the language of the market in question.
IKEA, a Swedish brand, has a campaign for the Spanish market in 2009 where they promoted taking a nap on their furniture. The brand adapted to the new market without losing its value.
Put the first research process in good hands. Have a finance, development, and research team that knows how to give you the right answers to your questions. This also involves good recruitment. It’s okay to question your decisions, maybe you are not choosing the best country to grow in. It is better to recognize the difficulties and mistakes at first than when you are fully invested.
2. Benefits of expanding your business:
The main goal of international expansion is to improve and grow your business. It actually has varied benefits when executed properly and with caution. However, we must see this as a long term transformation.
Here is a list of some advantages:
- By finding new markets and/ or niches, you are increasing the lifespan of your current products or services. For example, Miin Cosmetics keeping their heritage, and focusing on the Korean beauty niche.
The Miin Cosmetics’ store in Barcelona, Spain
- You stop relying on only one market, and it can reduce risks.
- If you sell seasonal products or services, expanding in other regions (i.g.USA and Australia) with the opposite climate cycle will enable you to be actively selling all year round.
- You can compete with foreign companies an even possibly become a leading business in their market. Zara, the fast-fashion Spanish brand, can be considered one of the leading fashion brands internationally, such as in Italy (104 stores), France (127 stores), and China (183 stores).
3. Ready, Set, Go!
After we have determined where we want our new market to be and that it is reliable to make the big move, we need to follow these 6 steps:
- Develop your international expansion strategies and campaign, which should include a business plan with your goals and needs.
- Research and study the market you are seeking to go into, including their regulations. Remember, every country works differently and you need to meet their protocol. Also, doing this study could help you get a better understanding of the demographics, and set an accurate and purchase price for the client.
- Define your business structure. This is the part when you determine how your business will function. To select the structure, you have to identify your goals and what you need, then you can choose the one that fits the best.
- Determine the distribution methods of your product. Think of how you will get your product into that region; it could be by opening a physical store, or by contacting external distributors. This could also be the phase in which you negotiate with middlemen and external services. Make sure that your brand has the same essence and feel worldwide.
- Seek for help. In some countries, the government assists local companies investing abroad. Seek for the requirements needed for funding and insurance, and if you meet them. Consider that you need enough capital for long term growth.
- Hiring and training abroad. Remember that people always first. You would never make a good expansion if you don’t have the right team next to you. If you are thinking about expanding, you may know that you are going to invest a large amount of money and there is no Plan B. An efficient alternative is to hire a Recruiting Consultancy to help you find the perfect team in no time. It doesn’t matter if you don’t know the salaries in this region or the language, a professional recruiting consultancy is going to give you always the best advice in the markets they are experts in.
Once you fulfill these 5 steps and make sure you meet the regulations and standards (remember that each country has different ones), you can begin to export your product into the new location. But think that people are the core of every company. Make sure that you have the right employees by your side. These people should know perfectly the peculiarities of the region you are investing in.
Successful expansion case study with Luxe Talent: the arrival of Christian Louboutin at Paseo de Gracia, Barcelona:
Christian Louboutin store in Passeig de Gràcia, 97
September 2017: The boutique’s opening is announced.
Louboutin had been working exclusively with Luxe Talent in France for many vacancies. In 2017, the brand determined that they were opening a new store in Barcelona, and since they didn’t have a store in the city yet, they wanted to make sure the process was done correctly with the assistance of experts. They reached out to Luxe Talent since they knew the quality and outcome of their work, and they also worked in the Spanish region. After contacting them, and explaining the needs and desires, Louboutin asked for a team of 6 vacancies (1 Store manager, 2 Assistant Store Managers, 4 Sales Assistant -Russian & Chinese Speaking).
November / December 2017: Seeking for the perfect candidates and interviews
Louboutin was very precise in the requirements & soft skills they were looking for: a true passion for the brand (being real brand ambassadors).
Luxe Talent aims to work as a partner with the brand (in this case Louboutin), which enables them to become an extension of the company when seeking their ideal team. The Luxe Talent team works efficiently and with transparency, to maintain the selection process clear with the client.
January 2018: Contracts
Once Luxe Talent had the ideal candidates for the expansion of the brand, meet the needs and expectations, and were approved by Louboutin, the incorporation process began.
February 2018: Boutique opening
A completely new team that represented Louboutin, opened the new store in Passeig de Gràcia, 97.
Nowadays: the same team recruited from the beginning is still working there!
Louboutin trusted in Luxe Talent and their skills to seek for the perfect team, and that’s what they did. The 6 retailers in the Barcelona store continue to work there for years. The team was happy and there were no rotations, and the company was reducing cost and happy with the outcome.
We understand that expanding your business is not an easy task, and it can become time-consuming. But, that is why we are here to assist you through the process. If your company is searching for a new opportunity abroad, do not hesitate to request our service. What we did for Louboutin, we can do it for you! ?