5 strategies for global expansion

By Verne Harnish, contributor


FORTUNE -- Eric Zuziak reckons that the Chinese middle class saved him from ruin. Before the real estate bust of the past four years, a company in Nanjing, the capital of Jiangsu province in China, noticed on Zuziak's website all the design awards his architectural firm, JZMK Partners, had won. It then hired Zuziak to design a residential community in Nanjing. Business from Costa Rica to Qatar soon followed. No worries about the real estate crash, says Zuziak, who now generates 85% of his $4 million in sales overseas. His secret? He and his Irvine, Calif.-based company work with market researchers to target countries such as China, of course, that have lots of consumers with money to burn. Here's what I think you should be doing to ramp up your own global business.

1. Set ambitious goals

Aim to generate 30% to 50% of revenue outside North America within three to five years. At Ammex, which sells disposable gloves, CEO Fred Crosetto recently created a five-year plan to expand in China and beyond. The firm, based in Kent, Wash., now employs 40 people in China, including a sales force. "China, India, and the markets outside of the U.S. are the future," he says.

2. Go multilingual

You can get by in many countries by speaking English, but you'll have an edge if you hire staff who speak the language. For instance, Zuziak of JZMK (see above) employed two Mandarin speakers when he broke into China; later, he hired a Chinese business development and project management consultant with a Ph.D. in architecture to serve as an intermediary for other gigs. "She was a representative of our clients on our first project," says Zuziak.

3. Focus narrow and deep

Instead of diversifying into new products, Crosetto of Ammex stays focused on peddling disposable gloves, aiming to dominate its niche. Beyond just providing his distributors with products, he helps them market aggressively with his "sales acceleration solution," a package of promotional tools, including brochures and a custom display for 24 types of gloves. "We supply it to all of our distributors free of charge," he says. He also offers them advice through a specialized marketing division.

4. Source globally

To keep his prices competitive enough to sell in China, Crosetto spends time looking for the best deals on gloves from factories there -- and in other Asian countries, like Thailand. He keeps personnel costs down by relying on a sales center in the Philippines to serve his U.S. clients. This helped him avoid laying off anyone on his U.S. team during the recession. Zuziak also utilizes a CAD drafting service in Argentina on certain projects to gain a competitive edge.

5. Follow the customer

My own firm made its international move nine years ago, when a customer dragged us to Kuala Lumpur, Malaysia, where we've been active ever since. To map your route overseas, contact your existing customers or partners and ask if they need your support internationally. It greatly reduces the risk of going global if you have revenue flowing on day one.

--Verne Harnish is the CEO of Gazelles Inc., a consulting firm.  To top of page

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