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To find out if your business is on the verge of extinction read the article here. Then let me know.
Thursday, May 18, 2006
Is Your Business On The Verge of Extinction?
To find out if your business is on the verge of extinction read the article here. Then let me know.
Labels:
going global,
verge of extinction
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2 comments:
Another great article -- couldn't agree more with your perspective quoted in the piece.
I am curious whether you have had the same experinece I have had in terms of the sustainability (or lack thereof) of export positions. In a course I teach on epxort marlet entry, I suggest that, as part of their international business plan, companies consider going in whether this is going to be a short term opportunistic move or whether its a long term commitment to growing their business.
If they in fact succeed at building a market presence in the foreign market, I have found that the locals catch on and within a couple of years are seeking to more vigorously compete in that space, only with the advantage of an at-home cost structure. I've seen quite a few small businesses ride a wave of euphoria as their export market starts to take off only to see it suddenly reverse 3 or 4 years down the road. By then, they're playing catch up to find a jv partner or come up with some other way to get on the ground and compete with the locals to take back share in the market that they developed. If Going Global is intended to be a long term growth strategy, then part of the orignal plan should include an assessment of the sustainability of market position against local competition and a preliminary plan for an "Act II" to get on the ground when the battles with developing local competition heat up.
Any thoughts?
Craig ~ I could post a very elaborate answer to your complex question but the short answer is this: Small businesses tend to experiment with going global and when the business is there, they continue to nurture it to generate additional revenues and profits for their business. Many do not enter the global arena with a thoughtfully crafted global business strategy.
If you have a chance, I suggest you look up a great paper authored by Walter Kuemmerle and entitled, "The Entrepreneur's Path to Global Expansion." It's right in line with your thinking but goes into detail about how "entrepreneurs need to structure their ventures to anticipate and mitigate the tensions that can arise from the ongoing need to match perceived opportunities to available resources." Kuemmerle's paper was published in MIT Sloan Management Review, Winter 2005.
Thanks for weighing in. Let me know what you think of Kuemmerle's paper once you have had a chance to read it.
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