I’m willing to put my money on the line for a simple bet. Here it is: after six months, the best value you’ll get from your global business plan is the heat it gives off as you burn it in a barbecue. That’s right. You know that precious plan you’re holding to gain success in the global market? Well, it’s more useful as fire starter for your summer cookout. I guarantee it.
Let me explain where I’m coming from. I’ve spent time with more than a hundred global retailers, and each of them has told me one version or another of the same story—the plan you start with is just the first plan you’ll toss out. Time after time, business leaders have said to me, “We went in with a certain set of assumptions, and those assumptions were totally wrong.”
So what’s the first step to developing a successful global business plan? Well, try throwing away the one you have.
I understand that there can be objections to such a radical idea. Maybe your executive team and board will say that they need a business plan with a reasonable ROI to help gather the resources to develop the global business. And sure, this makes sense. I’ve seen this scenario play out in nearly every case I’ve studied and every company with which I’m personally familiar. Essentially, the stakeholder responsible for developing the plan plugs in the numbers that the executives want to see. This makes everyone happy, the project gets funded, and the business begins to expand into the global market.
I don’t know of a retailer that has gone down this road and hasn’t struggled through years of mistakes with a few small successes along the way. These businesses revisit their plan every now and again and laugh at the mistakes they’ve made on the journey. In hindsight, everyone realizes that the first plan was flawed from the start.
Samantha Kent, a global ecommerce professional who has helped Jack Threads and other retailers with their global execution, says, “Global retail is moving at lightning speed in every country we work in. So basically, multiply your domestic issues by every country you are in. Then ask if you are putting the same number of resources toward those countries, as you are your primary country. The answer is always no by a long shot- even though your global markets may represent 20-30% of your business.”
So what is the best approach? How can you get a clear understanding of the local consumer and expectations around delivery, currency, payments, translation, social media, SEO, marketplace strategy, legal, regulatory, and all of the other challenges you might face? What are other successful retailers doing?
The best retailers are moving to an iterative business model that helps develop an understanding of the market, evaluation of resource allocation, and revenue upside on an ongoing basis. They use the new language and understanding of iterative change and disruption to keep pace with the blazing fast pace of global retail.
The first step to this is to get executive buy-in so that your cross-departmental global team is all using the same terminology. Make sure that they are able to accept incremental models, and be sure that they are nimble enough to play with change at the rapid pace required for success.
We’ve found that the best tool for this is the business model canvass developed by Alexander Osterwalder. It allows for a visual representation of your business and centers around the core value proposition assumption for your local consumer.
Developing your business with this model will help evaluate vendors, understand consumers and catapult your business to the forefront of competitive retail in the countries you choose to work in. Another benefit to this model is the initial evaluation and discussion around the countries you would like to move into, and the fact that it helps to eliminate some early mistakes.
With a little forethought and help from those who have gone down the road to Globalization before, you won’t have to relegate your first plan to the ash heap. Instead, you might be able to avoid the mistakes others have made before and get a head start on the competition when it comes to successful global retail.