Entrepreneur Carl Reader offers his thoughts on why companies must be willing to compromise when scaling their business into international markets
Google by its very design revolves around freedom of information, knowledge and discovery. However, the company is reportedly “working on a censored search engine” in order to re-enter China. This is said to have prompted 1,400 Google employees to sign a petition for an ethics review structure.
One of the unfortunate things about global expansion is the need to change. Any business looking to cross the channel or develop further afield will need to take into account the differences of their target nation when setting up.
Whilst Google has caused some level of controversy in its reported move to China – and for understandable reasons – it’s perhaps highlighted one of the bigger internationalisation issues businesses face.
Most businesses will need to adapt in some way to take local legislation into account. It might be their commercial contracts have to be re-drafted under the jurisdiction of a foreign court or indeed that their overseas employees have different rights under the local employment law. They might be required to register for certain business activities and there might even be laws enforcing a certain percentage of local ownership.
Very few businesses have the power to lobby for changes of these laws, so they must be embraced as part of the growth. I’ve also come across some practical issues when advising clients on international growth, whether in relation to brands being imported to the UK or exported to other nations.
Language is obviously a challenge for non-English speaking nations, however, even brands crossing from the UK to the US and vice versa have to understand the difference in the style and tone of communication. Taking a step back from the differences in words, businesses also need to consider the differences in demographics and customer tastes.
I had advised a German bakery brand not only to adapt its marketing material and operations manuals into English but also take into account the difference in consumer tastes and the different culture around buying bread fresh from a bakery. This is before differences in the costs of premises, employment law for transient staff, funding of new locations and planning permission. Whilst they had a very strong business in their home nation, they were forced to question every assumption they make every day about how business is done, including a change to their brand and logo.
I can see exactly why Google’s China case caused such dispute. However, I’d also comment that many of the challenges faced by brands exporting can be overcome by the largest of brands. For example, a brand like McDonald’s could have a very strong lobbying team and would prove attractive to any nation it goes to. I can only hope that Google helps cause some change for good through its growth.