Four obstacles to the success in internationalization

Monday, 9 july 2018 | Redacción CEU

When entrepreneurs make the decision to move their adventure abroad, they cannot rely on the simple replication or imitation of what has worked so far in their local market. Internationalization involves more than a change of language or taking into account two or three new variables. If entrepreneurs underestimate the obstacles that they can find in their way, their expedition is more likely to end up with a failure. What difficulties should they take into account when facing an internationalization process? How can they cope with these different obstacles?

The more detailed and thorough the preparation of a mission abroad is, the more likely it is to be successful. Although it has not been counted in the following enumeration, this is precisely the first obstacle that entrepreneurs have to overcome when taking the leap abroad: their own stubbornness  and reluctance to accept the magnitude of the challenge. The lack of planning in the internationalization is a mistake which is made more frequently than one might imagine.

It is necessary to dedicate some time to reflect before undertaking an ambitious project like this. This analysis requires taking into account the main obstacles that entrepreneurs may face on their way to face an internationalization process. Only this way will they be able to get to know how to react better to uncertainty and to ensure that they have the tools they need to begin this adventure.

What prevents success in internationalization?

• The financing limits

The bet of any company on a market abroad requires financing. This is one of the first aspects that  entrepreneurs must consider. It is important for them to be able to distinguish between their ability to finance the activities which are intrinsic to the company, such as commercialization or the marketing plan, and those that are linked to the process of internationalization. The latter will normally need an external financing.

There are different alternatives that can be sought to find this type of specialized financing: private investors, financial entities, public institutions and specific grants and subsidies. Any of these options usually demands a high level of guarantees. Once again, a detailed planning is key in this regard. On the other hand, the debts assumed by the company cannot compromise the viability of the business.

• The inability to know how to change

When entrepreneurs come to the decision to bet on markets abroad, they must understand that they have a long and demanding learning process ahead of them. Otherwise, their refusal to change might become their biggest obstacle. A process of internationalization implies changes like the  establishment of new centers of power, challenges in communication, the redesign of logistics, efforts in staff training and the adaptation to a different culture.

It is important for these changes to be addressed from a constructive perspective, if this is not the case the company will not be able to open up to the outside world. Impulsiveness, short-term mentality, obstinacy, lack of reaction to indicators and over-confidence on inertia are the main barriers to change.

When companies are not in their comfort zone, they are exposed to a certain level of stress. The small tensions that may arise, should be addressed in a rational and natural way, so that they can help companies grow. A good scheduling will help the team to face the challenge with greater serenity.