Simplifying the Internationalization Process for SMEs

As globalisation continues to rise, we are seeing increasing importance for the subject of internationalization. Everyday in business press we see news of various firms going international in pursuit of additional revenue and global dominance. For many firms internationalization is fast becoming a matter of necessity for survival as opposed to a luxury.

So the question of how one would go about internationalization is very apt for the times. Having widely read on the subject, it became apparent to me that majority of the existing frameworks for internationalization are very broad frameworks. At conceptual level and within the academic world these models make perfect sense. But does it help a marketing manager sitting in his office thinking about how to go about internationalizing his / her firm. I would very much doubt it.

Like many others, I've had a go at developing a model that could be used for daily use by the SMEs. Naturally, I have borrowed high level concepts in various models / frameworks and have tried to simplify the process into a decision model that could guide a marketer to go about internationalizing their firm. Click on the model for a bigger clearer picture. 

At the heart of this model is a firms dilemma of balancing the resources spent on upgrading their capabilities and international expansion. As it can be seen this is a heavy action biased model and able to guide a marketer through each key decision.

Obviously, the simplistic view raises many questions on what exactly each stage mean and what would you do at each stage. It is my hope that a series of mini models / toolkits will help the understanding of the model and also maintain its simplicity and action bias. I will cover off each of the stages in the model in a series of blog posts. I'm going to cover off Organisational aims and market screening in this post.

Many organisations fail in their attempt to become international players for lack of clarity within the organisation. It is my view that a firm can become a true international player only if there is conviction within the whole organisation. Key to this are organisational aims covered off in the forms of mission & vision statements, and long term objectives. As simple as these may sound, they serve a purpose in bringing the whole organisation behind the internationalization efforts if covered off properly. I know many people have become cynical of the mission statements as they are doing lip service in their organisations. But I can give you hundreds of examples where carefully crafter mission and vision statements engaging the employees and driving them towards one common goal. Including internationalization ambitions within the mission & vision statement also signals a senior management commitment making it easier to obtain necessary resources.

Now that we are clear we want to become an international player, how do we go about market screening. Having looked at various frameworks, I suggest the following simple process.

As it can be seen above model is a self explanatory process. However, what I would like to add to this is many of us don't necessarily want to go through a scientific process in screening potential markets. For an example, one of my clients simply used a criteria where they looked at foreign markets that has the biggest diaspora of their local nationals. I know many others who simply look at which markets have people we know and we deal with. Whatever, the route you wish to take the idea is to narrow down a list of countries that we want to explore further as potential markets for our company.

I will talk about the other areas of market feasibility, entry modes, etc., in future posts. Hope you will find this an interesting model to use in your day to day work to guide the internationalization process.