Business expansion and the art of melding
It is important to match imagination and dreams with the reality on the ground when we expand our businesses overseas.
If you are a fan of the Star Trek universe, you would know what a mind meld is.
There was a venture that decided to venture to a more sophisticated but expensive locale, and after a short period of time, announced that it would pack up and head home.
Both sides cited different reasons, but by understanding the operating cultures and diversity of the two parties, it is fair to assume that it is down to a difference of cultures, and how local businesses need to be managed and run.
In a sophisticated locale, the rules are very different from a place where cost of business is much lower. To operate in a sophisticated location, rental costs, expenditure, marketing costs, manpower costs, and many other costs, all add up significantly. If you have made a profit in a location with low business and running costs, without the need to incur big marketing budgets, you may find yourself in a spot in a place that demand a lot more. This is expected.
It would be naive to imagine that we can expand into a different location, and force our own rules, our own expectations, and our past indicators from local parameters, onto a foreign location. There will be language differences. There will be significant cultural diversity. There will be cost differences, sometimes by very large margins. What may be profitable in one year in location, may require eight years to realize in another.
We have to ask some serious questions when we have dreams, big dreams.
Are we realistic when we expand our business to other locations? Do we listen well and meld with our peers in those locations rather than imagine one cookie cutter fits all? Do we have the guts and the deep pockets to be able to hold our ground for the long haul even if the going looks grim and tough?