Cultural Considerations for Expanding Abroad: A Q&A with International Business Expert Anthony Gioeli

market expansion strategy cultural considerations

When it comes to forming a cross-border market expansion strategy, there are a number of factors to consider, one of the most important being cultural considerations related to the deal and region of expansion.

In the Q&A below, we present the expertise of Anthony Gioeli, Vice President of Sales and Marketing at KeyLemon, and his experiences in how to expand business cross-border.

Geographical Market Expansion Strategy

international business expert anthony gioeliAnthony Gioeli has over 25 years of experience managing fast-growth high technology companies, specializing in building and leading global organizations. He has served as president and chief executive of three US-based technology companies: CloudTC, Inc. and Atrua Technologies, Inc, which were acquired by foreign corporations, and AirPrime, Inc., which generated over 80% of its business overseas.

Anthony’s new book, International Business Expansion: A Step-by-Step Guide to Launch Your Company Into Other Countries, provides more in-depth information on what businesses should keep in mind when looking into geographical expansion.

In your book you suggest to “act global, not local.” What do you mean by that?

I have done a lot of business overseas these past 25 years, and I usually run into foreign executives who either are inflexible in their business style or try to imitate and act like a local person. You cannot be inflexible if you want long-term success, as you need to adapt to business practices in the local market. Doing business the way you do it at home can be perceived as selfish or rude and result in many stalemates at the negotiating table.

On the other hand, no one likes imitators, so if you try to act like you were born and raised in the market country, your customers and partners will see through you. Partners respect those who embrace the culture and learn the language, but not those who act as if they have lived in the country their whole lives.

Acting global means being accepting of and embracing the local culture but remembering that you are a foreigner visiting.

Acting global means being accepting of and embracing the local culture but remembering that you are a foreigner visiting. You mix local aspects of doing business with global aspects that you have accumulated over the years. When you act global, you are not seen as an American but a seasoned international executive that others want to do business with.

How much should a company adjust its internal processes to succeed in a different country?

Every company has its own core set of policies and procedures that should remain firm regardless of where the entity is doing business. However, outside of that small, core set, it is extremely important that companies be willing to adjust how they operate if they want to maximize their success in another country. Many customs around doing business differ from country to country, and you must be flexible and willing to learn if you want to succeed in another market. This can be anything, such as payment terms, support structure, employee policies, etc.

In International Business Expansion, you dedicate two chapters to localization and emphasize that some internal procedures will have to be adjusted to different countries. Did you typically make these changes prior to expansion, or did you adjust after expanding?

To be successful, you have to have the mindset that when you expand you will need to change some of your internal procedures. You must accept this before you start. However, the changes that you make are best left to be implemented once you expand. The main reason is that no matter how much you research how to do business in a given country, the actual way of doing business will always surprise you in certain ways. Once you are in the market, you will learn a lot about how things really differ and how best to change your practices. These could range from how you communicate to your internal sales force to how you engage customers or resellers in support. Be ready to make changes, but hold off making them until you are established and have input from your in-country team, partners and customers.

How important is it to speak the language of the market you plan to enter?

While speaking the local language is advantageous, it is by no means a necessity. English is the universal language for business everywhere in the world. In fact, some foreign-based multinational corporations, such as Sony, have English as their official language.

Nevertheless, learning some basics of the local language provides many benefits. Being able to say good morning, please, thank you and other common simple expressions shows a willingness to learn about and respect the new culture. This will pay dividends as you grow your business, not just with new customers but also with any local employees you hire. They will respect you more if they see you making the effort to adapt to their culture and language.

When looking to expand abroad, what was the hardest resource for you to secure, i.e. lawyer, forex companies, cultural experts, etc.?

Unless you are expanding into a very small market, most professional services are easy to find. Securing lawyers, accountants, bankers and merchant services is relatively easy. Either your domestic professional services companies can provide recommendations, or your country’s trade office in the new market can make introductions. Most firms are eager to bring on new clients, especially if they are a foreign entity.

The hardest resources to secure are those with expertise in your particular technology or market segment.

The hardest resources to secure are those with expertise in your particular technology or market segment. Many will want to do business with you, but because of cultural differences it’s difficult to assess who has the expertise you really need. To be successful, you need to spend more time doing your assessment and dig deeper than you would for someone within your country.

In your 25 years of global business experience, how have you seen the nature of cross-border business interactions shift in respect to technology?

Cross-border interactions have changed quite a bit over the last 25 years due to technology. Two decades ago, you could not complete a strategic deal without at least several trips for face-to-face meetings. Back then, most business discussions and all negotiations were conducted in person, and between those trips you would either have a few phone calls or send information via fax, but the actual ‘work’ was done in a meeting room. I recall all my Japanese contacts wanting me to send them very short faxes for clarification of items in between meetings, but they did not want to discuss any significant matters until we met again.

Today, people all over the world feel comfortable relying on technology. Whether it is email, texting, web conferencing, sharing files electronically, etc., most of the business discussions and negotiations are handled via technology. Face-to-face meetings are still important to secure major commitments, but a lot of the work is done in advance of these meetings. When you do meet in person, it is not to negotiate the major points, but to formalize the last remaining items.

Additionally, in some situations today you can complete major deals without even meeting face-to-face, and just rely on technology.

Featured image by Trey Ratcliff