Global integration – Being successful requires more than being ‘ready in country’

Editor’s note: “International Business Corner” is a weekly column written by Joan Keston that provides information for people involved in or considering international operations. Keston is an international business consultant. Over the next several months she will be writing about important issues that international businesses face as they compete in the 21st century global business environment.

RALEIGH, N.C. - Once you are “ready in-country,” i.e., you have executed a well thought-out and adequate business plan, you must be ready as a company. (It may be difficult to write a business plan for international expansion that is as complete and comprehensive as one might be for domestic business, but it must be minimally adequate to assess the opportunity, and comprehensive in attempting to qualify and quantify all possible business concerns.)

The integration of your global business actually should be one of the areas addressed in your global expansion analysis. This global integration encompasses the integration of your foreign business efforts and results into your existing domestic business, and, where existing, the integration of all of your global businesses with each other and your existing domestic business.

The most important determinant in your global integration is that your company, at the highest executive management level, embraces and fully supports your international efforts. The decision to expand internationally will necessarily have incorporated an analysis, SWOT or otherwise, and the assessment of its economic potential.

The resulting economic benefit to your company will be understood in relation to the economic benefit of your domestic business and other growth opportunities, and attributed a level of importance to your company. However, whatever that opportunity signifies to your company, it must be fully supported as set forth in your business plan by the highest executive management level.

Business Strategy Integration

The basis of your business strategy integration will depend heavily on the international market research results. If you are addressing developing countries, that research is generally more complicated to perform and often less comprehensive and accurate then similar results in developed countries. Employing the correct individuals to do that research is critical.

The following areas of your business strategy must be integrated:

• Business Model: How you realize profits and incur costs must be integrated and coordinated, respecting universal and local elements.

• Business Objectives and Goals: Your metrics for revenue achievement, realization of profits and market penetration must be accepted and believed achievable by the executive team.

Operational Integration

All of your company’s operational processes, procedures and reporting functions must be changed to accommodate your international business. The international business must be at the same level of importance and focus to your company as your domestic business in terms of your processes, procedures and reporting functions. A determination must be made as to the geographic location of the performance of these functions, i.e., which ones are performed centrally and which ones are performed on site at the foreign locations. The requirements driving your processes, procedures and reporting functions must be coordinated, the domestic requirements with the foreign requirements and vice versa, and the resulting activities and impact of information must be integrated.

It is important to note that the mere fact of doing business internationally will increase the areas where processes, procedures and reporting functions are required or recommended. This will add several additional layers to your company’s compliance activities:

• Product/services development

• International marketing programs

• Sales and distribution channels

• Manufacturing requirements

• Management and organization

• Accounting and reporting

• Due diligence and compliance

About the Author: Joan Keston is the Managing Principal of Keston & Associates, Ltd., an international business consulting firm located in Raleigh, NC, and a Partner at Paladin and Associates, Inc. She has 25 twenty-five years of experience with mature as well as entrepreneurial companies, domestically and internationally, coupled with an executive managerial and legal background. Her firm facilitates international business transactions, and assists companies establish, grow and integrate their international operations. She can be reached at (919) 881-7764 and jkeston@kestonassociates.com.