Hi! Thanks for the question.
Here are some disadvantages of going global for small businesses.
- Quality of your product. Ex. Don’t’ sell cheap products or products
with lower quality than domestic ones.
- Flexibility and change in mindset. Ex. Be careful with cultural
taboos or sensitivities of your market.
- Language barriers. Ex. You will need to translate your brochures,
manuals, etc into to foreign language.
- Product acceptability. Ex. “If you intend to sell electronic
products, for example, you need to make sure that. they are suitable
for electrical current differentiations abroad.”
- Product names. Ex. “Check if your logo contains characters that may
not be considered acceptable (remember Nike's gaffe?).”
- Level of commitment. Ex. You must be patient since your first
shipments might take months to accomplish.
- Organizational structure. Ex. “Exporting to be successful needs an
organized set-up. You need to have mechanisms to seek out buyers and
importers for your products. You also need to ensure multinational
legal compliance (labeling, packaging, product safety and liability
laws, etc.).”
- Additional costs. Ex. Additional electric, high taxes or telephone
bills.
- Pricing. Ex. “Carefully consider the foreign exchange market and its
volatility. Given instability of your new market’s currency, your
products may be priced too high or too low.”
- Level of competition. Ex “The number of exporters providing the same
product to the same market is a good indication of the demand for your
business."
“Checklist for Going Global”
http://www.powerhomebiz.com/vol18/global.htm
- “Are the best human resources dispersed among various countries?”
Ex. The country you are going to operate must have adequate and
knowledgeable workers for your company.
- “Would foreign financing be easier or more suitable?”
Ex. The government must have a financing program that can help you in
your foreign operations.
- “Do target customers require a venture to be international?”
Ex. Your company must partner with a local company of your target
country in order to be competitive.
- “Will worldwide communication lead to quick responses from
competitors in other countries?”
Ex. For example you are in the Call Center industry and you decided to
set-up a state of the art facility in an Asian country. Could your
nearest competitor contact possible partner companies and set-up a
similar operation in a very short time?
- “Will worldwide sales be required to support the venture?”
Ex. Since your global venture will be new, will your present domestic
sales or your partner’s resources be enough to keep the global
business afloat in the short term.
- “Will domestic inertia be crippling if internationalization is
postponed?”
Ex. One example of this is if the market in your own country is
already saturated. You will need to reach out to overseas markets to
increase sales.
“Entrepreneurship”
http://hometown.aol.com/reosoft/classes/manresp/chap05.htm
- You must have people that understand both cultures. Ex. These people
must be able to bridge cultural gaps such as language, customs and
even art.
- Focus on one market at a time. Ex. Amaze Entertainment, the creator
of the Harry Potter and Lord of the Rings video games, are focusing
first on Japan by establishing a plan specifically geared to that
market.
- Adaptive Organizational Structure. Ex. “We felt that organizational
structure would be really important, so instead of simply creating an
international division or group under our corporate banner, we created
a new studio named and branded specifically for this market. We call
it BlackShip Studios and it has its own mission, identity and
subculture - even though it is still an integral part of Amaze
Entertainment.”
“One Market at a Time"
http://www.businessweek.com/smallbiz/content/apr2003/sb20030415_9021_sb026.htm
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