How to develop a global strategy

GCC companies are increasingly being forced to looking at opportunities outside their own countries. And the tendency is to look at opportunities within the GCC and Middle East and North Africa (Mena) region for obvious reasons.

Accessing international markets in most cases makes sense as it provides additional opportunities for growth and expansion. Always remember the ground rule - the further an operation from home base, the greater the risk. Careful planning and execution is key to a successful international growth strategy.

Stage one in this process is formally assessing the opportunity. That means hiring a consulting firm that has market assessment expertise and the ability to recommend and implement the strategy with you. Often firms will prioritise and select international markets purely on the basis of somebody contacting them on an unsolicited basis looking for a partnership or somebody from the office belonging to that country coming up with an idea to enter his home country.

Both are generally bad approaches, and they often start out by making you feel good about having a new dot on the map, but they remain dots on a map, and then soon turn into red dots on a map because of potential losses than can result from unplanned entry.

The second issue often is whether one should go on one's own or with a partner. Over the years of having been involved in multiple joint venture situations, I am a firm believer that most joint ventures will fail in the end. They may start out with some synergy/leverage in terms of market access, local knowledge, financial, or technology, but soon different agendas appear, and partners start to pull in different directions. If one is forced into an agreement, clearly agreeing at the start about the terms of disengagement/exit would be a good idea.

Localising one's products, markets, pricing, services, processes, organisation are all critical but obvious components to this process. Many multinationals have failed across the world because they underestimated the importance of this. Simply taking a US product and printing an Arabic carton is not enough localisation. Taking existing products and processes and localising them while at the same time retaining core strengths and leverage is vital. There are some components that need to reflect the culture and processes of the home office. Otherwise one will end up with five different companies, maybe even with different looking business cards. In a joint venture situation there is a need to protect one's own identity and knowledge.

Lastly the success of an international operation will depend on its people. Sponsorship needs to be at the board level and strong. A home office team needs to be assigned to deal with various aspects of getting the operation off the ground and they must be incentivised for doing a good job. Picking the right chief executive officer for the international operation will make or break it. Ensuring that he/she fully appreciates the culture, strategy and business of the home office is critical.

As it is often said "In Rome, do as the Romans do" is key to success. But ignoring to integrate correctly with the home office, will result in creating a situation where dots on a map will remain dots with no lines joining them. And success is all about building networks.

- The author is the managing director of Cedar Management Consulting International.