BACK TO CONTENTS Working with the partner
Once you’ve selected a partner, you’ll need to invest some time and effort into building the working relationship with them. Don’t expect them to ‘get’ your business straightaway. You will need to develop your understanding of them and how they work.
Similarly, you will also need to develop your understanding of the market itself. For a clothing retailer for example, in India, men like button down shirts. So your product mix needs to cater for that. In North America, double cuffs on business shirts aren’t popular, whereas in the UK, they are.
The same applies to pricing. Your model might be to sell ‘four for £20’ in the UK, which might work really well. But in some markets, for example, they don’t like that model. They’d rather have 25% off.
So adjusting and localizing things to fi t the market is really important. You can’t just think that your concept is going to hit the market and take off. You will likely need to focus on the core part of your product offering. Some form of localisation is inevitable.
Choosing a partner who can advise you on this is important.
Looking to the future
It’s also important to not only look at the market now. With the world developing so fast, you have to have an eye for the future.
You may choose a market for physical entry now because it’s an emerging market with low internet penetration. But what happens in fi ve or ten years time when distribution networks get
better, internet penetration goes up and there’s a multi-channel opportunity? How do you manage that if you have a local franchise partner? Do you allow them to start building their own internet presence? Or is there a way that you can start thinking of agreements now where you can start to develop multi-channel propositions for the future?
So it’s very important to map out a strategy for the future early on.
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
YOU MAY CHOOSE A MARKET FOR PHYSICAL ENTRY NOW BECAUSE IT’S AN EMERGING MARKET WITH LOW INTERNET PENETRATION. BUT WHAT HAPPENS IN FIVE OR TEN YEARS’ TIME WHEN DISTRIBUTION NETWORKS GET BETTER, INTERNET PENETRATION GOES UP AND THERE’S A MULTI-CHANNEL OPPORTUNITY?
FOCUS 9
International division
As well as choosing the right partner, you’ve also got to set yourself up the right way internally. International growth takes more time and resources than you will initially expect. It depends to some extent on the size of the business, but to make it really work you’re likely to need a dedicated international division. That means having a team of people whose sole job is to develop the international business, work out the optimal roll out strategy, and be accountable for educating existing partners as well as bringing new ones on board.
An ad-hoc approach of making international the responsibility of, say, the UK Operations Director with the support of a Sales Director and some part-time IT support is unlikely to work.
There will be plenty of pitfalls along the way, but if you can identify and build the relationship with the right partner, you will be a long way down the road to success.
RETAIL EXPANSION
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