International Diversification into Growth Markets - if you wait.....

Ed Marsh | Nov 29, 2011

Looking ahead - planning strategically

Wayne Gretzky, "The Great One," is credited with a quote - as applicable to business strategy as to hockey.  When asked the secret to his remarkable success he said:international diversification hinges on selecting growth markets of the future not today's headlines

"Skate to where the puck is going to be, not where it has been"

Isn't that what business strategy is about?  Understanding how to allocate resources today in preparation for opportunity tomorrow?  Certainly quarterly reporting pressures create a dynamic within American companies which tends to retard some of this strategic positioning and investment - but it is often as much a crutch for those hesitant to commit as a real impediment. 

Going where the growth is going to be

Everyone talks BRICs.  Are there opportunities in Brazil, Russia, India and China?  Certainly - although at Consilium we tend to give Russia and China a wide berth and encourage companies to "cut their exporting teeth" in locations other than Brazil and India.  (Read more about our general thoughts on markets here.)  Of course every company's situation is different, and product can affect these choices, but generally the markets are seductive and difficult. 

But if you aren't reflexively chasing BRICs, where do you go?  Speaking of "growth markets" the Chairman of Goldman Sachs Asset Management who invented the BRIC acronym believes: 

"You can't think of emerging markets the same way people did in the past....If you wait until they get as wealthy as the G7...(the) opportunity will have gone." (Jim O'Neill, Barron's 21 Nov, 11) 

Growth not Glamour

The key is market selection based on a variety of factors.  Starting with corporate strategic objectives and including a myriad of details regarding industry, product, target demographics, etc. a properly constructed international business development plan will focus on legitimate business opportunity rather than the latest Time magazine headline. 

Growth may not always be found in the "sexiest" markets - but if you are growing profitably then you'll have commensurate vacation opportunities.  Meticulous planning and a thorough understanding of macro and regional trends reveals the markets where growth will be found in the future and allows a company to properly invest and position itself to capture a profitable portion of the growth as it occurs. 

Consilium specializes in helping companies plan properly, select optimal markets and build profitable international sales.  Contact us for info on how we could help your company.

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