Key Issues Facing U.S. Companies Expanding to a Global Reach
Have you ever wondered why so many large corporations keep a team of high powered attorneys, CPAs and tax specialists on staff? With so many issues facing today’s businesses looking to expand their reach to markets around the world, you should be prepared to hire specialists in almost every department. Here are a few of the issues you will face and a suggestion or two on how address potential obstacles in your path.
An Ever-Changing Tax Code
If you think it’s impossible working your way through domestic tax codes, just think how international tax laws, alongside those you are bound by here in the United States, can be overwhelming. Did you know that in an 11-year period, the U.S. tax code saw approximately 4,680 changes? Not only are individual taxpayers confused by these regular changes, but companies are also affected, often to greater degrees. If you are looking to expand your business abroad, the best solution is provided by schools like Northeastern University that offer an online master of science in taxation. Northeastern Online makes it possible to continue working while seeking an advanced degree, so by the time your company is ready to set up shop abroad, you’ll have the foundation to weed through the ongoing changes in our already confusing tax code.
Sales and Marketing Differentials Across Cultural Divides
Another of the biggest issues of reaching out to, and operating within, new markets could be explained in what many are calling the ‘cultural divide.’ What is acceptable in one country may not be acceptable in another, so marketing and sales strategies need to be redefined for the market you are entering. What is acceptable behavior in the United States may not be endorsed in other nations, so it is also important to have an international marketing specialist on the team. Most countries in the Western World have similar marketing practices, but when you move into the Middle East, for example, you can expect to find resistance to the type of language and graphics widely used in Western ads.
Staffing on Foreign Soil
While you may be tempted to send an elite team overseas to work the new branch, that may present many of the same challenges as mentioned above in the marketing arena. There are vast differences from culture to culture and so it may be wisest to hire locals to be the face the locals identify with. This would mean hiring sales teams that understand the language and culture. Some things simply don’t translate well. As an example, look at what happened when one of the earliest computer translation programs translated the biblical verse “The spirit is willing, but the flesh is weak” into Russian. The outcome was, “The vodka is good, but the meat is rotten” – totally different concepts. Although funny, it wouldn’t work when dealing with locals, especially if you are selling meat products!
These are just some of the issues and challenges you will face. The bottom line is that before launching an extension of your U.S. business on foreign soil, do the research. Employ specialists as team leaders but always remember to hire locals who can speak in language commonly understood within that culture. With this in mind, it’s time to start expanding!
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