This is Part 2/2 of our series on the role of International Business Development executives. For Part 1, click here.
We recently met a company in the flower business. The company has developed a substance that makes certain plants and flowers glow in the dark in assorted colors. They did some basic research on the U.S. market and they understand the pricing, logistics, and supply chain needed. However, their business model has yet to be clarified – is this company in the flower business, selling glowing flowers? Or are they a chemical company, selling chemicals to flower growers? The need for their potential products exists, but the availability is in question because the product has not yet been defined. Until they clearly define the business model, it will be hard for anyone to help them effectively. This strategic decision will have a defining impact on the economic future of their development in the U.S.
As a logical step in business development, companies often attend trade shows or conferences in the U.S., only to realize how different the market for their products in the United States really is. This was the case for a manufacturer of sanitary wipe dispensers for men’s restrooms. The company exhibited at a trade show for sanitary products in Chicago. The initial goal was to target spas, health centers, and similar businesses. However, discussions with visitors seem to indicate that one of the ways to break into the market could be by working with producers of sanitary consumables, especially paper. This company needs to readjust its business development strategy, and eventually negotiate with one of these paper companies, who are the more viable customers.
Another company specializes in wood pieces in spiral designs that can be used in furniture, stairs, and balconies. As a first step, the CEO decided to attend the High-End Furniture Luxury Fair (“ICFF”). The ICFF is a show for finished furniture manufacturers. It turns out that based on our initial research, the company would be considered in the U.S. as a supplier of wood components to OEMs or furniture makers. That category distinction may not exist in Europe. We suggested that the company refocus their business development strategy specifically on supplying wood components. The need in the U.S. might be structured differently than it is in Europe, which means that the nature of new potential customers would need a new approach accordingly.
Working with all these different companies and many more, it seems to me that the role of an International Business Development executive is essentially to explore new opportunities wherever they are by doing the necessary groundwork to “find customers who have a need for a product or services at a price that is available in their market”. This executive’s challenge is to identify markets where the company’s mission can be fulfilled, through a business development strategy that considers all aspects of the unfamiliar environment. It is like being a shadow of the CEO in a new country.
From what I’ve learned working with our diverse clients, a business development executive turns the CEO’s vision into a reality in new markets. He must understand the mission and objectives of the company before using the five elements above and adapting them to the specific country’s market. That may sound obvious, but the sad reality is that most of companies tend to skip many steps in the preparation for market entry in a new country. Executives that I’ve seen succeed in new markets have spent considerable time balancing and adapting their strategy around customers, need, products and services, price, and availability to fit the targeted market.
For all these reasons, I believe that the role of a Business Development executive in any organization is different from Sales. I’d like to see Sales and Marketing departments work closely with Business Development during the strategic analysis process of a market, long before the company becomes directly involved in the market.
Use this FREE self-assessment to check if your company has everything it needs to go global.