export – Lee Iwan

Expansion into international markets and working with other cultures can created unforeseen headaches and avoidable problems for companies who enter foreign markets without sufficient cultural information and know how.

Many companies of all sizes have encountered communication and cultural problems in international projects. Many times these problems occur due to oversight, or the impact of a culture and customs on the business were not taken seriously.

Virtually all organizations seeking to export or participate in international markets face steep learning curves about culture, customs and manners. Mistakes are made, at times very costly mistakes.

Making the wrong decisions, miscommunications, offending decision-makers or neglecting the fine points of initial negotiations can often bring a prompt end to an overseas business opportunity or deal.

The lesson to be learned is to invest some time and money to prepare, to understand your international markets and the culture where you will be doing business.

It’s not enough to understand your brand and current customers. Never underestimate any cultural factor, and never assume that your model, project or way of life will be embraced fully and without reservations.

We tend to read the following terms and think they refer to any company doing business in another country.

* Multinational
* International
* Transnational
* Global

Andrew Hines over at BNET has brief and clear definitions of each of these terms, Get your international business terms right.

Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country.

* International companies are importers and exporters, they have no investment outside of their home country.

* Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market.

* Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency.

* Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market.

Andrew’s advice is: if in doubt about the right term to use, try the generic term “international business”.

Difference between a global, transnational, international and multinational company

Original post June 18, 2007

Lee Iwan

Tag: export

Cultural misunderstanding – the deal breaker

Difference between a global, transnational, international and multinational company