November 14, 2013
We’ve been having a series of conversations with brands and retailers recently about how to effectively plan for global online expansion. While approaches vary, eBusiness leaders cite similar challenges. In particular, two hurdles to successful international expansion tend to come up repeatedly in conversations:
“Our ROI scenarios are unrealistic.” In a survey of eBusiness professionals in the B2C space, we asked how quickly they expected to see a return on their investments in new global online initiatives. Over three-quarters said either in less than one year or in one to two years. By contrast, leaders of successful global eBusinesses frequently highlight the fact that payback on new initiatives takes at least two years, with many citing three years and up. As a result of this disconnect, eBusiness professionals overseeing new global businesses often find themselves falling short of expectations and struggling to secure the funds needed to succeed. Today, the mismatch between ROI expectations and performance is one of the leading reasons why new global initiatives fail.
“We still struggle to get the right level of input from local teams.” The centralization/localization debate has tended to be a pendulum that swings from one side to the other. Companies in the past often over-centralized, leading to a top-down approach that didn’t take into account local consumers’ needs. To ensure local relevance, many businesses subsequently over-localized, giving ultimate control over the customer experience to local offices. This approach, however, often leads to inconsistent brand experiences and management challenges. Today’s global eBusiness leaders are struggling to find a happy medium: They aim to centralize certain functions to realize economies of scale yet ensure that input from local offices allows them to build effective country-specific offerings. Straddling this line is one of the biggest challenges eBusiness leaders face as they plan for a global future.
In our upcoming research, we’ll be looking at how businesses with global aspirations are creating strategic plans and road maps for their new international initiatives. We’d love to hear what issues are top of mind – and what hurdles you face – as you plan for your global future.