We made some new and up-to-date insights for businesses looking to grow in Asia for 2020. Check it out here.
When does a company become multinational? The answer is right there on the terminology used. Regardless of the form it takes, whether multinational company, multinational corporation, international corporation, or transnational corporation, it only refers to one thing – a company or organization offering goods and services that operate in one or more countries. More often than not, the companies (branches) scattered all around the globe are managed from one country, the “home base”. A few examples of multinational companies include Microsoft, Google, McDonald’s, Apple, 3M, Accenture, and Coca-Cola. These companies have expanded and are continuously expanding, so much so that they have breached Asian countries already and are doing exceptionally well.
Why Expand Internationally?
The next appropriate question would be, “Why do such big companies expand to Asian countries?” I mean why not. It’s little secret that some people have misgivings about Asian countries. Nevertheless, you should realize that these companies have done their homework before expanding to Asian territories; thus, they know what they are getting into.
Feasibility studies are done to determine which countries fall under the emerging markets category. These countries have opened up their markets to accommodate international trade and finance. On the part of the multinational company, investing in the economies of these countries is a gamble because inasmuch as it can be profitable, various risks are involved. However, at the end of the day, the main objective of a multinational company expanding business in Asia is to earn profits. Fiscal dynamics change on a global scale, which is why companies such as the ones mentioned above considered expanding to emerging markets for potential business growth.
Expanding to New Territories
A company that’s expanding business in Asia for the first time might have reservations, and that’s understandable. Going beyond the scope of a company does seem like a daunting task, but it can be done with careful planning. In fact, a company can expand its business in Asia without spending too much.
How does a multinational company expand business in Asia without breaking the bank?
Here are a few tips:
Understand your potential market.
Keep in mind that by expanding business in Asia, you’re virtually bridging culture gap. The last thing you want is to come out as too condescending, so you need to understand local cultural characteristics.
Understand the needs of the local market.
Ask yourself if the product or service you’re offering is likely to sell. Remember that different motivating factors push customers to buy a product or avail of a service.
Check out local competition.
Invest with the mindset that competition exists for the product or service you’re trying to bring into the country. Knowing that you’re competing with local companies will help you measure your KPIs to understand how you stack up against the competition. Sharing the industry with other players is a good way for you to improve constantly.
Understand the business landscape.
What are the requirements to sell your product or service? Do you need to alter your approach in order to meet the conditions of the local market? Are there restrictions to pricing that you should know about? It will be best to know the marketing trends in Asia this 2016 before plunging into a new atmosphere.
Know your allies.
Before expanding business in Asia, it would be a good idea to identify your potential allies. These local entities can help you with your initial launch.
Explore the power of the Internet.
If you want to build a reputation as a legitimate player in the multinational field, take advantage of the Internet’s selling power. Use it to get a tight footing on your target market, as well as to build your image up. Know your social marketing goals and plan for the strategy you think will be best in targeting Asian prospects.
Employ a local specialist.
Through extensive research, you are sure to find someone who, for a reasonable fee, can assist you in building the list of local contacts that you will need for your business. That way, you won’t be wasting time and resources talking to the wrong people.
Remember, each market presents different challenges and opportunities. More than taking a long-term approach, it’s important to be adaptable and flexible because you’re venturing into the “unknown” and you need to be prepared. Keeping these tips in mind will help you expand your business in Asia and pass the process with flying colors.