Understand the other
What to think of the unfortunate experience of McDonald's, which after opening about a dozen restaurants in Bolivia went bankrupt? It was the first time that the giant had to close all its restaurants in a country. Experts explain this resounding failure by a flagrant ignorance of the local market and the habits of its consumers.This is what Roberto Udler explains in a documentary entitled "Why did McDonald's go bankrupt in Bolivia?" To begin with, Roberto Udler underlines the excessive prices, around 25 Bolivian pesos for a hamburger, while Bolivians can find a quality menu for 7 Bolivians. Nor was the mentality of Bolivians taken into account, who are quite attached to the traditional products of their land and give great importance to the slow cooking mode, synonymous for them with quality food. Quite far from fast food then.
Furthermore, what works in one country does not necessarily work in another. For example, in Germany large hypermarkets are completely out of fashion, while in Brazil or Indonesia they are in vogue. E-commerce is perfect for Japan, but partially inappropriate for China for cultural and especially technological reasons. Understanding local cultural codes is therefore an essential stage in being able to prosper in foreign markets.
This is well understood by Thomas Savare, director of the global banknote printing specialist, Oberthur Fiduciaire, which prints banknotes from more than 70 countries and has obtained Euro Printer accreditation. "Part of intercultural business is to understand what makes your offer special, to understand why your client would be more interested in your products instead of those of your closest competition," explains the director of Oberthur Fiduciaire. Indeed, according to him, “intercultural differences matter more today (…) At Oberthur Fiduciaire, a large part of our business revolves around the printing of paper money. On these bills there is always an artistic design: drawings and engravings of monarchs, authors, architectural monuments, musicians, etc.These images are very important as they embody the history and identity of the nation that will use the banknotes ”. The general manager of the Central Bank of Colombia, José Darío Uribe, corroborates this dimension: the country's new banknotes were designed to pay tribute to the Nobel Prize winner for literature Gabriel García Márquez.
Therefore, to survive there is only one watchword: Adapt. Adapt its offer, its services and its promise to the client according to the customs of the country, is the key to success: telephone service hours, shipping costs free or not, return times, refund times, etc. Also think about adapting another fundamental point for the internationalization of your business: payment methods, which are very different depending on the countries. These allow you to significantly increase conversion rates. Internally, it may be convenient to adjust business practices, including dress code and communication. The head of the Oberthur Fiduciaire, for example, draws our attention to the “risk of confusion, in the sense that if you travel a lot there is a risk of getting confused between the ways of one country and the customs of another. Something that is not important in one country can be dramatic in another! ".
Create win-win alliances
Seeking marketing experts to advise you on the market is a good idea, you can even consider partnering with one or more local players, in order to avoid problems in the integration process. As the magnate Jorge Pérez, born in Cuba, immigrated to Argentina and who has operated more than fifteen joint-ventures between South America and the United States, points out: “In the United States, you are judged for what you achieve. In Latin America, you are judged by who your family is. " In the same interview with Forbes, Pérez insists on the development of a local and even regional network of contacts, in order to establish himself successfully abroad.
In this field the French excel again. In order to break through in markets as complex as those of Latin America, Jean Charles Naouri, at the helm of Casino, a leading distribution company, decided to partner with the Éxito group, the number 1 in the region, led by Carlos Mario Giraldo Moreno. The French leader proudly shows the high margins of his company in foreign markets such as Argentina. A win-win strategy: “as we had established in our strategic definition, today we are making the idea of having a multi-Latin Success Group a reality. We are passionate about the challenge of becoming the largest retailer in South America and we will work to achieve the proposed results and continue our expansion. The client will continue to be the center of the Organization in each country in which we operate ”,explains Carlos Mario Giraldo Moreno, who highlights the historical nature of this alliance.
Be cautious when arriving in a new area
In short, every cautious entrepreneur must take into account the laws in force in the country or countries where he wishes to establish himself. To do this, resorting to recognized professionals is again a good idea, since VAT rates may vary, putting margins at risk or forcing sales prices to rise dangerously to the public. Managing tariffs can also be a dangerous mission. For Jesús Rodríguez, president and CEO of Realsec, recognized for the success of its internationalization strategy, “knowing the local legislation of each country to observe its compliance and avoid unwanted risks” is one of the factors of success. He himself applied this precept to be able to take his business, specialized in digital signature technology, from Madrid to Mexico and San Francisco.
A valid reasoning for Ricardo Aquino, Managing Director of TMF Group Brazil, who accompanies companies in their internationalization processes, especially in Latin America, where companies particularly benefit from advice on the “administrative burden”, all the more so since laws evolve rapidly due to the relatively unstable regional political context. Having this type of advice is a way for companies to “concentrate on what they know how to do best”, Ricardo Aquino confides. An organization has to do enough when it launches into a new market. Last tip (although the list is still long): achieve a certification from local or international bodies, such as Trusted Shops.It is an ideal tool for customers and business partners to agree on their trust.
«Part of intercultural business is understanding what makes your offer special, understanding why your customer would be more interested in your products rather than competition's, closer by»
«Intercultural differences matter more nowadays (…) In Oberthur Fiduciaire, a large part of our business revolves around banknote printing. On these notes, there is always artistic design: drawings and engravings of monarchs, authors, architectural landmarks musicians and so on. And these images are very important because they embody the history and identity of the nation which will use the bills ».
«Risk of confusion, in the sense that, if you travel a lot, you may get mixed up between the ways of one country and the ways of another. Something that has absolutely no importance in one country will be dramatic in another! »
