Planning and preparation is critical for international expansion

The International Expansion summit last week with Debenhams, M&Co, Mothercare, other retailers and consultants in attendance made me reflect on the consistent message that international expansion, although potentially attractive, is not an easy route to follow.  Success requires thorough planning and preparation supplemented with a heavy dose of realism and pragmatism.  To develop a strategy to go international a detailed plan needs to be built to ensure your effort is focused on achieving your goals.

Strategy

Some key factors to consider in building the strategy for international expansion:

  • Be clear on what business model you plan to use: Franchise, License, owned
  • Clearly define your proposition: product, channels etc
  • Understand the implications of your choice of operating model:  Push or pull supply and the implied supply chain risks
  • Where do you want to operate: Which countries, their economic, political and social stability.  The potential commercial benefits and risks
  • Who do you want to operate with. The strength of partners, their experience in retail/ franchising, sales development plans, fit with your brand and values
  • What is the commercial opportunity?

Plan

Having built a strategy that considers and answers the above areas, a multiple series of actions need to begin, some with long lead times.  This will require an upfront investment of time and resources to prepare and get ready before you open your first location!

  • Find your partners
  • Legals – Heads of Terms, outline contracts, trademark registration
  • Plan financials – Costs for development, debt, security, trading terms, P&L, reporting and tracking
  • Plan your supply chain – Export requirement’s, FOB vs. Ex Works, Business interfaces, IT
  • Develop Buying & Merchandising
  • Retail operations – How will you deliver the brand locally
  • IT – What interfaces are required across your business
  • Shop Fit & Concept – How are your stores going to look
  • Multi-Channel – do you don’t you? Potential impacts for your partner? What model can you support?

All of these things need to be worked through which requires your best people from across the business and an investment of time and energy upfront.

Finally, your planning will be at risk if you don’t have local understanding of the market.  This was highlighted by Lee Braid from M&Co who shared with the conference the challenges of launching a kidswear brand known in the UK as URBAN to the Polish market where URBAN is the name of a far right extremist political group!

There really is no substitute for local knowledge and being on the ground.

For more views on International Expansion click here to read Matt Clark’s viewpoint

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