Internationalising Sri Lankan businesses

By MTI Consulting

The lowering of trade barriers and formation of regional economic blocks is both an opportunity and a threat. It is a threat in the form of new regional and global players entering the domain that you have dominated for long. It is an opportunity because it opens up similar reciprocal scenarios in regional and international markets that have had many tariff and non-tariff barriers in the past.

In order to take advantage of available opportunities and to ensure the ongoing success and viability of a business one needs to develop a global mindset, view the companies from a global perspective, and institute a global culture and value system throughout the organization.

The question then arises, that IF we decide to internationalize, HOW do we enter international markets? For many companies this can be a daunting task – given the miniscule size and insular nature of markets like Sri Lanka, especially when compared to a diverse range of international markets from rich-niche Qatar to high volume China.

Therefore, any company considering internationalizing its business should first assess its current readiness and fitness for internationalizing its business based on which appropriate strategies should be developed. Companies can follow this 8-step process for success.

The first step is the decision to internationalize or not for a company. This question can be answered by looking at some factors affecting the company: Most companies today suffer from the risk of over exposure to a single market and the volatility of the market they are present in warrants diversification into other markets, thereby reducing the risk of adverse impact on the company and its performance.

Another factor is, companies whose growth has been stagnating should be looking at going overseas. Also, companies may be facing stiff competition from local players, and one way of reducing the impact on the performance of the company is taking the value chain of the company out of a single market through measures such as external procurements in order to reduce costs and improve efficiency.

The second step then is to decide what can to be taken overseas from the whole gamut of competencies and key success factors that the company possesses. Some of the generic competencies will be tested for taking the business across borders like Processes, Management, Biz Model, Product, Brands, Technology, etc.

The third step is to identify what regions / countries the company has to enter. It starts with identifying the regions / markets available for the company and then do an opportunity assessment researching four key areas Macro Scan – this involves macro factors about the economy, growth, FDI, technological trends etc. Industry Scan – this involves size of the industry, segments, trends, drivers etc.

Competitor Scan – this involves nature of competition, competitive advantages, key players and offerings etc. And Consumer Scan – this involves researching the consumer needs, wants, perceptions, purchase process, willingness to buy etc. The next stage is to evaluate the opportunity of all markets and select the range of best suited markets for the company based on evaluation criteria – developed specifically for the situation a company is in and drawing broadly from the generic criteria available. After the markets are finalized, an entry strategy has to be developed for each of the markets and a generic strategy should be identified for a company where it is considering multiple market entries.

The strategy should detail objectives for each of the market entries and link it to the corporate strategy of internationalization.
Arrive at Entry Options available and the best fit option to be selected. Develop the best fit Value Proposition by defining the product, pricing, branding, communication, distribution and more for individual markets. Also develop Structure, Staff & Systems to support the strategy. Finally develop a Launch schedule of market entries and the related activities with responsibilities and timelines.

Post this, a plan has to be developed for the launch of operations including a Marcom Plan for demand generation & a Roll-out Plan. Once the operation is under way, the company should track the performance of the operation using Reviews on implementation and performance tracking reviews on periodic basis and any Course corrections or changes needed to strategy or plans should come out of reviews – to help achieve the goals and objectives. MTI Consulting with a regional network spanning Sri Lanka, India, Pakistan, Bangladesh, Dubai and Bahrain, helps companies with international market entry and strengthening existing international operations.