The key to successfully entering global markets is an unconventional strategy
With its small and relaxed culture, New Zealand is a great place to test business ideas - and many New Zealanders do. Kiwi’s pioneering ‘No 8 wire’ problem-solving skills see New Zealand lead the world in business seedling startups. Furthermore, pioneering problem solving skills make Kiwis capable employees who are valued by employers throughout the world.
However gaining a footing in large markets occupied by big competitors requires something more than a great DIY capability. New Zealand’s size and isolation produces an environment ideal for business seedlings but NZ can’t duplicate the competitive environments found in larger markets. Businesses from small isolated countries lack big market experience and deep pockets, and this has to be compensated for by thoughtfully conceived market-entry strategies if there is to be any chance of success. In jungles, smaller plants have to resort to unconventional strategies to slowly take over larger conventional trees.
Just because a seedling flourishes in the greenhouse,
it doesn't mean it will thrive in the garden
A conventional strategy in bigger markets just places the small Kiwi business on the same playing field as bigger embedded firms with deep pockets. Like those from other small nations, Kiwi business people need to become smart at seeking out a unique and unfair advantage when entering global markets. To succeed in a highly regulated, highly competitive industry, Air New Zealand, for example has had the courage to use unconventional marketing thinking (unconventional for the huge global airline industry) to win international customer awards and generate above average industry performance.
A few Kiwi companies have become ‘World Class’. Their stories may be referred to as a ‘David versus Goliath’ situation, which when analyzed, offers good lessons about overcoming large challenges in new markets. Using the conventional battle thinking of the day, any boy taking on a fully armed giant face-to-face in unfamiliar territory would have faced certain defeat. The lesson? David, when facing Goliath, stepped forward only after he had conceived a plan that gave him an unfair advantage. Even before he stepped forward, he knew his unique (low-cost) slingshot skills could be exploited in a surprisingly unexpected way and understood that his unconventional plan increased his chances of success.
Business people from small isolated nations need to develop smart strategies to grow global businesses and they can do that by learning from those who place a high value on unconventional strategies. There are a few small countries that produce an above average number of successful global businesses. While they are less isolated than NZ, Scandinavian countries produce innovative small businesses supported by a strong business cluster environment. However the standout performer is from David’s part of the world. A significant number of Israel SME firms have entered the US, European and South African markets, found a suitable ‘sweet spot’ and enjoyed rapid business growth in niche segments.
Interestingly the CEO’s of these global Israeli firms attribute their success to lessons learned from military conflict that for them has become a way of life. (Case studies, HBR, May 2014). Israeli business people develop strategic and tactical thinking during their mandatory military service. While Kiwi business people may lack the opportunity to gain an appreciation of the critical value of military strategies, Kiwis should learn from successful strategy specialists; after all, some of these companies could be their direct competitors.
It’s difficult to counter unique, unconventional initiatives using conventional thinking. When a small business rolls out an unconventional strategy it appears that big business conventional anticompetitive tactics become less effective. Smart business people executing unconventional strategies rarely talk about their strategic plan for very good reasons, and it suits them that the media are more interested in what they have achieved rather than how they have done it. When companies create smart strategy first and then use Kiwi problem solving to execute the plan, the results can be world class. Kiwi company Xero is executing its well-conceived strategy to enter new markets and gain a footing despite the presence of large well-established competitors.
First the smart strategy, then smart execution. The path suggested here may appear counterintuitive to those with a pioneering mindset but not to many who have experienced global business growth. No matter how clever your product or business idea, Kiwis need to accept that they are probably less experienced at strategic planning than their competitors in the bigger market. Second, the ‘un’ part of ‘unconventional’ means that a unique tailored strategy needs to be considered. Copying what successful businesses do is an option, but that’s just the visible tip of the iceberg. Copying the way people think is more difficult. Third, finding someone who spends most of their time working strategically, and challenging conventional thinking is a great investment. Fourth, go and find out as much as possible about the new market place. Follow this order and a unique, unconventional plan will likely become uncovered.
When companies create smart strategy first and then
use Kiwi problem solving to execute the plan, the results can be world class
As Kiwis implement their unconventional strategic plan, their unique ‘Kiwi No8 wire’ problem solving skills will come to the fore and shine overcoming challenges that would stop those with no plan, or just a conventional plan, or who have not taken these steps.
In New Zealand, business strategy assistance is affordable. The business seedling journey towards thriving in the global market place can be extremely rewarding if global lessons are considered early on. The New Zealand government understands the importance of market-entry strategy and has made funding available to assist in the creation of credible strategic plans. Many NZ business owners qualify for funding.
Copyright © Kel Marsh 2014