Is your company predominantly trading domestically? Don’t fit into the category of “born-global”? Not to worry – global trading is about attitude, not connections, or skills, or knowledge or, perhaps, even strategy.
That doesn’t mean you don’t need a good many of these to successfully trade globally. But attitude may be the most compelling thing you need.
The term “born-global” originated with Michael Rennie in 1993 when he studied the capability of organisations to trade, and compete, globally. An article by Stoyan Tanev which can found in the Technology Innovation Management Review goes on to explain further research that has taken place. However, the guts of the article is that there are specific characteristics to an organisation that is born-global, and most are about attitude, not how international your LinkedIn network is.
Here they are, see if you agree:
High activity in international markets from or near the founding
We can skip this for the purposes of this discussion – this is just timing. If you’re international from the start, you’re “born” global. If it comes later, you are said to “go” global. Who cares whether you get it together in the first year or two, or even after 20 years – being global is where a great opportunity could lie.
Limited financial and tangible resources
Who can’t relate to that? In my experience it doesn’t matter what size of organisation you are, you always need more resources. However, the research shows that born-global organisations tend to have fewer than most, especially small businesses. Necessity leads to them being leaner, more focussed, more efficient. So, if you’re a small business and would like a bit more budget to work with, that’s great, you’ve already got one of the eight attributes needed. And if we are skipping over number one because that’s just timing – which we are – then you have one of the seven needed so you’re already 14% of the way there!
Present across most industries
The born-global research originated from the technology sector but later research in 1997 found organisations in industries such as metal fabrication, furniture, processed food and consumer product. So, if you produce something, chances are you can go global with it. Great, now you’re 28% of the way there! And don’t stop reading if you’re in the services sector. I recently met an amazing organisation that has produced an extremely innovative and high-quality approach to training. It’s delivered in-person and surrounded by efficient use of technology. Without realising that there was a list of characteristics, they had them, were born-global and have been trading internationally from the start. Even direct services can be global.
Managers have a strong international outlook and international entrepreneurial orientation
Note that this statement uses words such as “outlook” and “entrepreneurial orientation”. It doesn’t say “international network”, “have travelled the world extensively since they were knee-high to a grasshopper”, “speak 10 languages”, or any of the other things that it’s so easy to see as required. Personally, I hadn’t been on a plane until I was in my 20s, speak only English (plus a decent American, Australian, New Zealand, etc.) but it didn’t stop me running a global licensing programme and founding a company that exported to every region of the world. Not because I’m a genius (I’m not) or amazing in any way, but because it didn’t occur to me that I couldn’t and, thank goodness, no one told me it wasn’t possible. There are numerous couriers that will help you ship to Timbuktu just as they will help you ship something down the road so it’s all possible. There might be one or two bits of admin and it will cost a bit more, but maybe that’s why they will be especially keen to help you with your international shipping! So, do you know where to find the phone number of an international courier firm or airline, for those in direct services? Great, 42% of the way to being global…
Emphasis on differentiation strategy
This turns out to be a characteristic of born-global organisations, but I’d argue that it’s a characteristic of most successful organisations. Are your products or services different from your competitors in some way? Then you already have something unique to take to potential customers and that doesn’t matter where they are. Still with me? You’re over half way there – 56%!
Emphasis on superior product quality
This goes hand-in-hand with the last point and again works domestically as much as it does internationally. If your product is the same as the next guy’s, you need some other differentiation such as price or speed of delivery. But if you have superior quality, people want that, will pay for it and potentially even wait for it, no matter where they are. We’re doing well here – most organisations I’ve met are now 70% of the way to having all the characteristics they need to be global.
Using the tech – or, leveraging advanced information and communications technology (ICT), to put it more formally
Easier and cheaper than it’s ever been and now a pre-requisite for a great many businesses. If you have email and a website I’d suggest you’re there already, but it would be a bit glib of me to suggest that it’s quite as simple as that. Online conferencing and, depending on your market, perhaps some localisation may be needed, but they can be simple and cost-effective so can’t really be considered a barrier. Got a website and email? Great 84% of the way there.
Using external, independent intermediaries for distribution in foreign markets
The research shows that most born-global organisations accomplish international expansions via direct sales and working with third parties. Well, we’ve already established that you know where those are because you have the phone number for a courier/airline booking service. But there are others that can help and provide the expertise you need considerably quicker and more cost-effectively than embarking on recruitment of an Export Manager, whom you almost certainly don’t need full-time anyway. And all considerably easier than establishing a presence there yourself.
A little of the above is somewhat glib, I acknowledge. But my point is that these characteristics can be adopted by virtually any organisation and many, such as product differentiation and quality, are embedded in organisations already. So, if you think international trade is an opportunity for your organisation, it probably is and, without realising it, you may also have most of the characteristics you need to exploit the opportunity. Decide to do it, engage the expertise you need, and enjoy the growth.
Talk to us today to find out how the range of services offered by International Trade Matters can unlock your global potential and accelerate export success.
Frances Fawcett is an International Trade Specialist for International Trade Matters Ltd