global expansion

Global Expansion: How to Avoid Cultural Faux Pas

The moment you go international, you’re met with challenges involving staying on brand, relating to your message, your employees, and the new market’s culture. It’s not a step for the faint of heart. Issues related to cultural mismatches or haphazard research can be costly in any global expansion.

Going global changes everything.

Take Walmart’s infamous blunder in Germany, for example. The retailer opened 85 stores in Germany, expecting massive profits as it reached new customers. Instead, the company struggled with complex labor laws and business hour restrictions and got tangled up in regulatory red tape. Additionally, well-meaning Walmart baggers unnerved German customers because having someone else bag your purchases isn’t normal in that country. Walmart eventually closed its German stores, losing about $1 billion in the process.

While Walmart’s issues stemmed from cultural miscues, Starbucks struggled with accusations of overpriced and underwhelming coffee when it attempted to break into the Australian market. The coffee powerhouse struggled against independent chains, Gloria Jeans, and McDonald’s, losing $143 million over eight years before shuttering about 60 stores.

Starbucks executives cited poor real estate and low foot traffic for its failed debut in the Land Down Under. Competitors claimed the company didn’t do enough marketing, priced its beverages too high, and ignored Australian coffee tastes.

The Keys to Successful Global Expansion

Walmart’s and Starbucks’ global expansion efforts flopped because the companies failed to adjust for unique cultural preferences, or simply misjudged the international markets. When business leaders understand and embrace cultures of regions they enter, their messages can resonate with international employees, as well as customers.

Not every company flounders during a global expansion. Many people don’t realize Red Bull originated in Austria, and McDonald’s has used its knowledge of different market preferences to craft cuisine in countless countries. Global expansion can be a lucrative endeavor, but proper planning and execution are critical.

Here are six keys to success for international expansion:

Embrace Cultural Differences

Familiarize yourself with the cultures, customs, and traditions of regions where you want to expand. This will help you avoid offending employees or potential customers as you establish relationships.

For example, some cultures disapprove of public disagreements with workplace superiors. You might find team meetings involve an audience of employees smiling and nodding at every idea you toss out. Instead, you could meet with team members individually to home in on their suggestions to improve the company. You’ll have to adjust your management style to get the best results from your team.

Adjust Your Calendar

Because people don’t observe the same holidays and religious celebrations internationally, identify and understand the significance of local holidays wherever you expand. Likewise, your marketing calendars should be in sync with local traditions.

Chinese New Year influences travel in the Asia-Pacific region the same way religious holidays affect travel and purchasing behaviors in the Middle East. A lazy rehash of the same strategy in different countries won’t cut it.

Be Mindful of Time Zones

Transitioning to a global organization means working with employees who live in different time zones. A 2 p.m. meeting on March 1 in New York might seem just fine to you, but that same event would take place at 6 a.m. on March 2 in Sydney, Australia. Don’t expect to have a standard schedule in your work and personal life.

To accommodate all times zones, schedule multiple training sessions at different times. You can also alternate regularly occurring phone calls from early morning to late at night. That way, everyone will be mutually inconvenienced.

Use Tech to Bridge Distances

It’s great to be in the same room as the rest of your team, but flying in employees from all over the world for every meeting is impractical and expensive. Take advantage of different communication methods, including conference calls and video chat.

Conference calls are fantastic if you don’t need to see your team members’ expressions and body language during a meeting. You can also leverage screen-sharing applications such as Skype, Google Hangout, or Join.me to collaborate on projects in real-time.

Consider Hiring a Translator

Ideas and campaigns hatched in one region sometimes don’t translate globally. Automated translation services can be helpful. But a person fluent in the language and familiar with the culture is the best way to ensure your message hits the mark.

Businesses expanding into regions where it’s important to understand the culture and business climate of two countries might hire a bicultural country manager. This person will know what you’re saying in one region, as well as how to best to translate that message into the other.

Choose Images Carefully

Images are powerful tools in campaigns, but be mindful of sensitive subjects. These might include alcohol, clothing styles and interactions between people. Know the themes you should avoid before you enter a particular market — offended people aren’t likely to buy from you.

Moreover, understand how foreign cultures use images. One legendary example of marketing gone awry involves Gerber confusing African audiences by placing an image of a child on jars of baby food. Product labels in some African countries feature images of what the product contains. Shoppers were rightfully a bit disturbed by a label unintentionally indicating the jars contained children. Use local experts to customize your content and ensure you don’t inadvertently confuse customers.

Global expansion isn’t something to fear, but it’s vital to look before you leap. To stay on brand and expand into new territory, your company’s messaging, employees and culture all must be aligned. Partnering with local experts, adjusting your business practices for international employees, and ensuring your message is clear to customers can help you achieve worldwide success.

 

 

Michael Innocentin

Michael Innocentin is vice president of e-commerce and digital for AccorHotels, a world-leading travel and lifestyle group and digital innovator. The company offers unique experiences in more than 4,000 hotels, resorts, and residences, and more than 2,500 of the finest private homes around the globe.

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