What to Consider When Expanding your Business Overseas

06/06/2023

For companies looking to expand their business, one way to do so is by selling and promoting their offerings in a foreign country. It opens opportunities for your business to sell to a new audience, which will, in turn, increase overall revenue. But it doesn’t mean it’s easy. Marketing to another country comes with its own unique challenges, ones that you may not initially realize when starting the process. But it’s important to make sure your business is prepared before you start marketing in other countries. Why? Because even big corporations have messed up. A translation error can either be small and inconsequential, or it could be a grave mistake. For example, KFC entered China in the 1980s with the phrase “eat your fingers off” instead of “finger-lickin’ good”. Fortunately for them, it didn’t scare too many customers off. And it continues to be a popular chain in the country.

But mistakes like that could end up being detrimental in the future. KFC just ended up being one of the luckier ones. It’s not enough to just know the language, distinct cultural differences will also greatly impact your marketing campaigns. Another example is when the baby food company, Gerber, entered Africa. In America, we’re used to seeing the cute baby on the label. But in Africa, their products usually use pictures of the actual product because not everyone can read there. To say people were confused and horrified was an understatement. So, localization experts are more than translators; they must also be aware of important cultural differences to avoid mistakes that could completely backfire.

PEST Analysis

We’ve talked about a SWOT analysis before, and while the two are linked, a PEST analysis is different. A PEST analysis looks at a potential new business and will influence your decision on whether you’ll enter a new country with your business. Before entering a foreign market, use a PEST analysis, which stands for Political factors, Economic factors, Socio-Cultural factors, and Technological factors. After considering these four factors, it’s easier to decide whether your company should enter a new country and it’s easier to determine how hard it’ll be to do so.

Questions to Consider Using the PEST Analysis Method

When conducting your PEST analysis, here are some important questions to ask yourself:

Political:

• Who are the most likely contenders for power? What are their views on business policy and how will that affect your business?
• How well-developed is the country?
• How widespread are corruption and organized crime and is it likely to change? How likely will that affect your organization?
• How does government approach corporate policy, corporate social responsibility, environmental issues, and customer protection legislation? Will it make an impact on your business and is it likely to change?

Economic:

• How stable is the current economy? Is it growing, stagnating, or declining?
• Are key exchange rates stable, or do they tend to vary significantly?
• What do customers’ levels of disposable income look like? Is it likely to change in the next few years?
• How does globalization affect the country’s economic state?

Socio-Cultural:

• What is the population’s growth rate? Is this likely to change?
• Are generational shifts in attitude likely to affect what you’re doing?
• What social attitudes and taboos could affect your business? Are there any recent changes that could affect this?
• How do religious beliefs and lifestyle choices affect the population?

Technological:

• Are there any new technologies that you could be using?
• Are there any new technologies on the horizon that could affect your business?
• How do infrastructure changes affect work patterns (ex: remote work, etc.)?

Here at PSPINC, we have experts to help your business expand products and product lines to Japan. With our history of localizing software between the U.S. and Japan, we successfully created ur SaaS (Software as a Service) product, C-Sagaseru, which was designed specifically for coaches in Japan to connect with their clients. Start localizing your content with us today. 

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