Is this the biggest risk to your business in 2020?
Are you in denial or are you reaping the rewards?
We live in a rapidly changing world and the rate of change is only getting quicker and quicker.
These changes bring business owners and investors both challenges and opportunities.
So how are you deciding what to focus on?
With information overload it can be tough.
Handle the big stuff first and don’t sweat the small stuff.
Focus and handle the mission critical things of any business like getting leads, converting to sales, keeping your customers, etc.
But take time to look up and around and see what’s happening outside your business and what’s coming your way…..often if you like it or not.
Follow the major trends and rise with the tide.
These are the BIG trends that will affect you regardless of your industry, your previous success or where you live in the world.
It’s like the aging population trend in the West.
People are going to happen with or without you.
It’s a simple mathematical equation of how many people are getting older and how many new babies are being born and there is nothing you can do about it.
There is another BIG trend that is going to happen with or with you.
The only question is if you see it is as a problem and put your head in the sand or if you see it as an opportunity and you take action to profit from it.
Is your glass half full or half empty?
The BIG trend is this. Drum roll please. International trade.
International trade. It’s already at historic peaks and rising further.
It’s never been easier for a foreign company to enter your market and it’s never been easier for you to enter a foreign market.
And businesses are Going Global. They are going in droves.
Global trade is at historic peaks in both dollar terms and as a % of GDP in US and the same is true in many of other countries.
Just consider some of these trends:
- China is already the largest eCommerce market in the world.
- USA merchandise trade as a share of global GDP has risen from 9% in 1960 to 160% in 2009.
- China’s middle-class grew 25% in 2010 and is forecast to grow 33% by 2020.
- China has already overtaken the United States to become the world’s top auto maker with annual sales rising 46.15% and output up 48.3 % year-on-year.
- India has displaced Japan to become the world’s third biggest economy in terms of purchasing power parity (PPP)
- Brazil has become the sixth-biggest economy in the world overtaking the UK.
- Brazil leads Latin American ecommerce growth, becoming amazon’s biggest foreign market.
- Ecommerce grown from 12.4% in 2010 to 20% in 2014
And if you don’t think foreign companies are entering your local market?
Take a closer look.
Just Google foreign direct investment FDI + your country name.
And then take a look at who actually owns your local brands. For example, it may say Kraft but then look at who owns Kraft. The Chinese alone have spent US$51.3 billion so far this year in buying foreign companies.
It’s not just for large companies. Take a look at who is advertising to your local clients online. It’s probably not your local competitor but instead a foreign competitor.
Over 20% of all eBay sales are through foreign sellers.
Governments have recognized that domestic demand will not be enough and exports and international trade will be the deciding factor between success and failure of the economies.
The stakes are high. National economies will fail or succeed based on their export success.
They have launched major initiatives to assemble their business owner troops to be battle ready in the Global Playground……..
…….or Global Battlefield depending upon your mindset.
The US President announced in 2010 to double sales in the next 5 years.
The UK Prime Minister has set out an ambitious strategy to double UK exports to US$1.5 trillion by 2020. They recently announced eight Trade Envoys and a new US$12m pilot Project to strengthen the capacity of overseas business groups.
What has caused this seismic shift in the world economy?
Three billion new customers
The death of distance and
The overthrow of trade barriers.
So should your company Go Global?
The journey is certainly not for everyone and you will need to go in with your eyes open but lets look at twelve reasons why you must definitely investigate it further so you can make an informed decision.
The 12 Essential Trends in 2020 for global business expansion.
Are you in denial or are you reaping the rewards?
1. Three billion consumers and rising.
With many domestic markets stagnating, customer acquisition costs spiraling upwards and customer loyalty plummeting serving only the domestic market will no longer cut it.
2. Never stop selling; Your 24.7.365 cash machine.
Don’t limit your income by the 9am-5pm Monday to Friday work week and keep selling 24 hours, 7 days a week, literally 365 days a week. Think about it, when its winding down in the UK and you are finishing up for the day, people are just waking up in NYC** wishing to spend their money. The power of e-commerce, m-commerce and cloud computing allow you to sell and collect payments in multiple currencies online whilst you sleep. Ching, ching. And what happens if your product/service is not sold online? No issue, you will be able to position yourself as the expert, add value and collect leads to follow up with in the morning.
3. Go after the low hanging fruit first.
In the global market some markets will be ‘easier’ than others. Why compete where the competition is high when there are easier markets? Why pay a fortune to acquire new customers when there are cheaper places? (Check out Google Adwords to see the variance and why hire where wages are high when there are even better people available for a lower cost somewhere else? Your business toolbox just got a lot bigger allowing you for practically the first time in history to buy in one market, hire in another and sell in yet another place. Why not take the low hanging fruit first? It’s sweeter too.
4. Hire an even better team…..and double your output
Even during recessions, CEO’s often say that their number one issue is lack of talent. There is talent pool playground has now got seriously bigger. The World.
Many services from accounting to design to customer service can be handled without regard to the location.
Furthermore, its now totally feasible to hire teams abroad to work remotely – this has not only lowered costs but can create a 24 hour business machine due to time zones differences effectively doubling your output in some instances.
5. Access better and often cheaper suppliers.
Not satisfied with your local provider. No problem. Call another provider the other side of the world and still receive it tomorrow by 9am. Technology and logistic advancements have made the world much, much smaller. Plus, its not only a cost factor, many ‘emerging’ nations have leapfrogged Western economies with more investment in technology, systems and customer service level too.
6. Trade Barriers are down and some Governments lining up to help you.
The elimination or reduction of tariffs and more than 600 Free Trade Agreements (FTA’s) have help lead an export boom. Today the average U.S. tariff rate is less than 4% – a 90% reduction. With FTA’s, when a foreign company now invests in a country it attains access not only to the market of that country but also the market of their FTA partners. So enter the US and you can access 600m people. Enter Australian and its 650m, Singapore and it’s 2 billion people.
7. The distance dragon has been slain by technology, airplanes and logistics.
The days of boarding steam ships to navigate the world are long gone. Today, technology allows you to do it without leaving your office.
Find and communicate with suppliers, talent and consumers quickly and easily online. Effectively communicate with your team via email, chat, video conferencing and manage your projects via simple cloud based tools.
Need something shipped from London to Hong Kong. No problem. The global aviation and logistics industry have revolutionized global freight to make it affordable, secure and quick.
And its not only goods that can move around the world cheaper and faster than ever before. It’s ideas too.
The distance dragon has been slain.
8. Don’t keep all your eggs in one basket. Diversify.
Economies go through cycles. Up and down. It’s natural and not all countries rise at the same time. Right now, much of the Western economies are stagnant whilst Asia, Latin America and Africa are rapidly growing year after year. Why not go where the growth is and move with the markets? Keeping your eggs in one basket is now risker than ever.
9. Profit from Exchange Rate movements.
Currencies gain and lose value against each other. If there is weakness on your local currency it makes your export prices cheaper. The opposite is also true so pay attention. Again, are you positioned to profit or lose from these swings?
10. Follow the Global power shift trend.
Global political and economic power also goes through cycles and shifts over time. The broad shift right now is from the West to the East. Why not set yourself up to profit from these global shifts?
11. Become even better in your domestic market.
Going Global will throw you new challenges. Conquering these will make more innovative, flexible and productive not only overseas but also in your domestic market. You will develop adaptability and feedback mechanisms that will strengthen the entire company.
12. Eat the Carrot or get hit by the Stick.
If you don’t go global, a foreign competitor will and in turn, gain a competitive advantage over you that will win over some of your customers, lose you sales and eat into your profits.
If you stand still you may perish.
If you wish to grow, then many companies are going to need to sell their products and services into economies that are growing faster than the economy of their home country.
Eating a fresh carrot sure is a lot nicer than being hit by a stick.
Bonus Reason……….See the World, broaden your horizons and be happy 🙂
Many people say that wish to travel more, see the world and learn about and experience foreign cultures. Going Global can open the door to such opportunities.