Whether it is for technology or consumer products, the global market is now the best place to grow sales and profits. To fully realize the potential of these opportunities, executives must undergo a paradigm shift, strategically analyze data and build alliances before the first dollar changes hands.
“To sustain growth and allow the next generation of Americans to have a better life, we have to rethink globalization, identify opportunities and be contributors to the global economy rather than consumers,” says Dr. Yi Jiang, associate director of MBA Programs for Global Innovation at California State University, East Bay.
Smart Business spoke with Jiang and Dr. Glen Taylor, director of MBA Programs for Global Innovation at California State University, East Bay, about the process of identifying and making the most of ripe opportunities in the global marketplace.
What prevents U.S. executives from capitalizing on the best global opportunities?
Taylor: U.S. executives need a different approach to analyze and select global opportunities because our country is no longer the dominant market in the world. Our loss of supremacy means that we need to learn how to do business in other countries that don’t always comply with our culture and business practices. We must put ourselves in their shoes and see things from their perspective.
Jiang: We’ve had a tendency to view globalization in simplified terms and think of other countries as a resource for outsourced services and cheap labor. But when executives apply a different perspective to the analysis process and develop innovative products and solutions, they stand the best chance of succeeding outside the U.S.
What’s the first step in the identification process?
Taylor: The first step is demographic analysis, but unless executives take a deep dive into the data, they may overlook emerging trends and target the wrong customers. For example, a superficial analysis of Chinese demographics reveals no net population growth, but an in-depth study shows that social change is under way and people are urbanizing at the fastest rate in the world, adding tens of millions of new global consumers each year. This creates unprecedented demand growth.
Jiang: Each country has regional and generational differences that create unique opportunities on the consumer side. U.S. executives must consider dynamic industry cycles and a county’s openness and resources before attempting to position each country in the holistic picture of global strategy.
What’s the next step?
Jiang: Travel to the country to experience the culture, validate your hypothesis, and establish strategic business partnerships and networks. You’ll need seamless collaboration to understand the cultural nuances and build a supply chain. Infusing yourself in the culture will help you identify additional opportunities, since the best ideas often come from prospective partners, suppliers and customers.
Taylor: Business relationships are like a marriage, so prospective partners must get to know each other before making a commitment. And your travels may yield additional opportunities, especially if you view things with an eye for the innovations being developed in other markets.
What else must executives do to succeed in the global marketplace?
Jiang: Remember that global opportunities and situations are fluid, so what seems like a great idea today may not work tomorrow. Conduct extensive scenario analyses so you are prepared to perform under a variety of circumstances, and keep your finger on the pulse of prospective customers by garnering feedback through open source social networking.
Taylor: The key is to search out opportunities in global markets to develop innovative products and services that build on our strengths while embracing new ideas from other countries.
Dr. Glen Taylor is director of the MBA Programs for Global Innovation at California State University, East Bay. Reach him at firstname.lastname@example.org.
Dr. Yi Jiang is associate director of the MBA Programs for Global Innovation at California State University, East Bay. Reach her at email@example.com.