1 year? 3?

Ed Marsh | Oct 25, 2011

"Quarterly" Strategy - the oxymoron of American Business


US companies are trapped in a 12 month paradigm when it comes to expected returns! The one year period is typically dictated by bonus plans that make up a significant percent of executive compensation plans. Fortunately, for companies who seek domestic market growth, the one year period is not totally unreasonable. Companies with unique product or service offerings experience large percent growth spurts during the early years as they expand easily into new territories. Companies in a competitive landscape usually experience a slower acceptance curve in the market and often don’t see significant returns until the beginning of year two.

But payback expectations for most new domestic business ventures are still looked through a 36 month lens. At the end of three years, an organization’s returns are expected to equate to the sunk costs associated with the start-up.

 

International Paradigm


International business is precarious and often peppered with unexpected issues, especially during an organization’s first entry into an overseas market. This is why partnering with a global intelligence firm from the start can save companies countless hours and investment dollars. Public companies are notorious for raising international sales expectations to often unattainable levels. The explanation for this is shareholder pressure and the fact that they are usually larger and better positioned in their domestic arena.

In developing a strategic plan to take your product(s) overseas, it’s important to include milestones that are not measured in dollars. For example, adapting the product for a new market is a critical step. This could be changing the container to a common metric size, or removing features that have been deemed as unsafe in your target country. Packaging regulations will often include a myriad of challenges from language to ingredients to instructional manuals.

 

Activity and Pipeline Metrics


After you’re products have been revamped for international markets, you begin the process of registering them in-country. And, while all of these steps are being completed, your business development partner should be exploring primary sales channels and securing the right in-country agents and distributors to disseminate the product. This preparation process in most cases takes 12 months to complete, and depends heavily on the company’s selected market(s) and the adaptability of the product(s) and packaging for these new markets.