Each year, hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy. When developing a strategic plan to launch an international business program, growing companies and their advisors must always consider the potential barriers and adjustments they might need to make to their product and service offerings. These include the following:

Language Barriers. Although it may seem simple enough at the outset to translate the features of a given product or service into the local language, marketing the product or service may present unforeseen difficulties if the concept itself does not “translate” well. The target country’s standards for humor, accepted puns or jargon, or even subtle gestures may not be the same as your domestic country’s norms or idioms and may need to be adjusted accordingly.

Marketing Barriers. These types of barriers most frequently go to the deepest cultural levels. For example, whereas many overseas markets have developed a taste for “fast food” burgers and hot dogs, differences in culture may dictate that the speed aspect is less important. Many cultures demand the leisure to be able to relax on the premises after eating a meal rather than taking a meal to go. These cultural norms can, in turn, be affected by factors such as the cost and availability of retail space. Direct and subtle messages in advertising campaigns may need to be modified. The appeal of using a particular celebrity in a campaign may vary, and the channels for promotion may also need to be modified to meet the educational patterns and needs of the local consumer. Even marketing methodologies may need to be modified. In certain cultures, such as in the United States, coupons are widely accepted and used by people who are both rich and poor. In other cultures, coupons are not widely used or accepted. In some cultures, even the use of comparative advertising, which is now commonplace in the United States, could be viewed as offensive or destructive.

Legal Barriers. The company or its counsel must research tax laws, customs laws, import restrictions, corporate organization, and agency/liability laws. Domestic legislation needs to be examined as well for issues arising under labor law, immigration law, customs law, tax law, agency law, and other producer/distributor liability provisions.
Access to Raw Materials and Human Resources. Not all countries offer the same levels of access to critical raw materials and skilled labor that may be needed to offer the service or enjoy the product. The growing company may want to consider what changes in the product or service may be feasible to accommodate this resources challenge without sacrificing the core business format.

Governmental and Regulatory Barriers. The foreign government may or may not be receptive to foreign investment or expansion. A given country’s past history of expropriation, government restrictions, and limitations on currency repatriation may all prove to be decisive factors in determining whether the cost of market penetration is worth the benefits to be potentially derived.

Intellectual Property and Quality Control Concerns. Protection of trademarks, trade names, and service marks are vital for the ability of an emerging growth company to operate abroad. The company needs to have a strategy in place for both protecting its intellectual property rights and enforcing them if violations are discovered.
Dispute Resolution. The forum and governing law for the resolution of disputes must be chosen. On an international level, these issues become hotly negotiated due to the inconvenience and expense to the party who must come to the other’s forum.

Use of a Local Liaison. It is critical for the growing company to have a local liaison or representative in each foreign market. This local agent can assist the growing company in understanding cultural differences, interpreting translation problems, understanding local laws/regulations, and in explaining the differences in protocol, etiquette, and custom. It may be advised to offer employment and equity to these foreign nationals so that they have a vested interest in the success of your operations abroad.