After twenty-five years working in international enterprises, I have seen many ways of going about international expansion.  I have seen what works.  And, regrettably, I have seen where firms fail.  All too often, the failure is due not to lack of good product or service, but to a not having the information systems to deliver and manage those products.

 

In a few cases the company got both the systems and business strategy right for the times but failed to update their approach.   New events changed the cost structure or more nimble competitors arrived on the scene.

The Challenge of International Systems

Countless firms have tried and failed to internationalize their businesses.   Many of these failures are household names in their home markets, including Federal Express, ATT, and Credit Suisse.  These false starts are evident in every industry and in every size of business.  For each success story it is easy to find at least two failures.

Yet, operating in the same business environment with similar services, many firms become international powerhouses, while at others falter.  Even with less resources, less experience, or less reputation, these firms succeed where others fail.  Why? What can we surmise about the difficulties of going  international? 

Clearly part of the challenge is in finding the right service or product for the right price for the local market.  However, we see examples of failure and success even among firms with very similar products and services, so that is not the complete answer.  The people in charge of these new businesses are very important.  However, an international business can fail, even with talented business managers having many years of experience.

I believe how well the firm’s systems are design and managed has huge impact.  This is because systems play such an important role in the effectiveness of the staff and management of any new firm.  If the systems that are supporting the customers, staff, and management are difficult to change, costly to own and operate, or can’t give information for quick decisions, even the best management team has a big problem on its hands.