4 Things Tech Companies Need to Know Before Expanding Internationally

4 Things Tech Companies Need to Know Before Expanding Internationally

The tech sector is one that is particularly suited to expanding internationally. Generally, products created in this sector have a global appeal and so it is no wonder that they perform well in global markets. However, expanding internationally always poses challenges, regardless of the sector that you operate in or the strength of your product. If you are looking to operate in multiple countries, here are four things you should consider before you start:


  1. Which country are you expanding into?

  2. Are you aware of the different marketing approaches that are used in international markets? And have you considered how you can adapt your marketing and acquisition strategies to appeal to an international market?

  3. What cultural nuances are relevant to business dealings there?

  4. Is there a language barrier and what challenges might this present?

 

Choosing an International Market

Some tech companies have made the mistake of deciding to operate internationally without deciding on the specific countries that they are planning on expanding into. Figuring out which countries to prioritise stops you from spreading yourself too thin. It also allows you to make a targeted approach for specific markets. While some countries are often grouped together into single international markets, it’s important to recognise and consider their differences before trying to trade there.

Even within Europe, there are many differences between the countries and regions regarding the way of doing business. For example, the southern countries, such as Italy, Portugal, Spain and France, may have a more casual and laid-back attitude in business meetings and usually establish very personal relationships. In these countries body language plays a big role, as it communicates a lot of context. However, in Germany, Switzerland and Scandinavian countries, people are more formal, direct and all about the facts when it comes to doing business. They keep small talk to a minimum and prioritise punctuality, especially when it comes to meetings.

 

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Initial Research and Marketing

Examining the market that you are interested in expanding into is always a good idea. While the strength of your product, regardless of whether it’s software or hardware, may be in high demand in your current market; it might not appeal to some other markets. One suggestion is to look at expanding internationally into a region that you already receive enquiries from. Of course, it's also important to look into the regulatory requirements of each market for your industry in-depth before taking the plunge.

Another thing that can cause problems for tech companies when they try to operate internationally is trying to employ the same marketing strategies across different countries. Business News Daily has some excellent examples of companies that had disastrous results when applying the same marketing campaigns overseas in their article ‘Lost in Translation: 10 International Marketing Fails’. When marketing internationally, using detailed initial research into the local market can deliver a much higher return than trying to impose your domestic strategy. It's worth investing your time in drawing up a comprehensive go-to-market plan, as well as conducting competitor analysis, to ensure your expansion is set up for success. However, the most important thing is being willing to adapt and being flexible with the way you do business internationally.

 

Cultural Nuances

Learn cultural norms, business-related or not. If you’re doing business in another country, you should be aware of your body language. In some cultures, gestures like pointing fingers or crossing your legs might be seen as rude or it could just have a completely different meaning than it has for you. Passport to Trade 2.0 features country-specific business communication pages for a number of European countries. Business etiquette is important in any working relationship, so knowing what is expected and is considered mannerly in a particular country and culture can be really beneficial. Having local expertise within your team can also be invaluable to international expansion. Many companies have had to shift to incorporate remote working into their business structure this year, but it has historically been a great way to have employees based overseas without having to open an international office.

Language Barriers

Doing business in a non-English speaking country can be extremely different from doing so in an English-speaking country. While English is the most commonly used language for business communications, there are still several nuances to consider. The English language is full of inconsistencies that cause non-native speakers to struggle with speaking and understanding the language. While most business people are fluent in English, vocabulary limitations still exist. “Once it comes to specific business, legal or technical terms outside of their particular area of expertise,” Passport to Trade writes, “misunderstandings are common”. While both parties may think they are fully understood it is better to elaborate and avoid disputes further down the line. And when it comes to being clear, make sure nothing’s lost in translation when it comes to contracts. While not cheap, a good translation is usually a smart investment. It’s important to hire a specialist translator who can pick up ambiguities, identify the precise technical translation of a term based on past precedents, and be familiar with the jurisdiction’s corporate law.



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