Business Without Borders Buying Agendas

BUSINESS WITHOUT Y BORDERSL F A Strategic Guide toM Global Marketing A E T Donald A. DePalma John Wiley & Sons, Inc. Team-Fly® Copyright © 2002 by Donald A. DePalma. All rights reserved. Published by John Wiley & Sons, Inc., New York. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4744. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, (212) 850-6011, fax (212) 850- 6008, E-Mail: [email protected]. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional person should be sought. ISBN: 0-471-20469-2 Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1 CONTENTS Acknowledgments v Introduction: The Sun Never Sets on the Web vii Chapter 1: Discovering the Eighth Continent 1 Chapter 2: Great Expectations for Global Markets 27 Chapter 3: Navigating the Global Journey 47 Chapter 4: Deciding Which Markets Matter 77 Chapter 5: The Laws of the Eighth Continent 108 Chapter 6: Building the Foundation for New Online Markets 129 Chapter 7: Putting Your Value Proposition to Work on the Eighth Continent 155 Chapter 8: Organizing to Serve the Eighth Continent 183 Chapter 9: Outsourcing Work to Fellow Travelers 208 Chapter 10: Measuring the Return on Global Investment 230 Web Site Addresses 245 Notes 251 Index 261 ACKNOWLEDGMENTS dedicate this book to my parents, Guy and Meda DePalma, who let me I make my own decision about spending my entire life savings to visit the Soviet Union when I was just 16. Their sometimes amused (“Russia? In the winter?”) but strong support through subsequent sojourns abroad launched me on my own global journey. I’d also like to thank my family—Karen, Rachel, and Kevin—who endured the long hours and inconvenience as- sociated with research and writing this book. I’m indebted to Elisabeth Abeson, a globalization expert who read everything that I wrote, provided insightful feedback, and kept directing me back to the bigger issues. I’d also like to thank my other reviewers—Val Ziegler, Dana Tower, Joe Sawyer, Melissa Josephson, Tom Shapiro, and Renato Beninatto—all globalization and marketing specialists in their own right, who contributed thoughtful comments and insight. I owe another debt of gratitude to the globalization advocates and leaders at the companies that I interviewed for my case studies. They gave gen- erously of their time for interviews and follow-up inquiries, even as they were working hard to make their own global and ethnic marketing invest- ments pay off. As for the content of the book, many people provided information that I included in my model, but a few of them stand out. Louis Dejoie of McNees, Wallace & Nurick reviewed sections on international legal issues. Adam Asnes, Alex Pressman, and Yann Meersseman helped me make the tough problems of internationalization easier to digest. Andreas Randhahn coun- seled me on better graphic representations of information. Idiom Technol- ogies’ consulting and WorldWise teams, especially Mark Yunger, Louis Carvallo, Anne Ertlé, and Joel Pulliam, supplied background on issues ranging from localization to legal to vendor landscapes. Finally, I want to thank eMarketer for access to its eStats database, the best source that I’ve found for statistics of and relating to the Internet in all its forms. And while the contributions of all these people helped me write the book, ultimately the responsibility for what you read here falls on my shoulders. While you’re sure to find things that you don’t agree with, what I’d like you to walk away with is the importance of communicating effec- tively to your target markets, wherever they happen to be. With that as your goal, everything else—focused marketing, organizational structures, tech- nology, and budgets—will follow. Introduction The Sun Never Sets on the Web even days a week, 24 hours a day, hundreds of millions of people S around the world cross national borders without a second thought— and often without knowing that they have done anything unusual. This community scours the Internet for the ideas, products, and relationships that they might not be able to find easily—if at all—where they live. This borderless community of Internet users comprises a virtual Eighth Continent racing toward a population of a billion inhabitants. It exists wherever a computer, mobile phone, set-top box, or personal organizer touches the Internet. Until the Web pulled together this huge electronic society, its citizens were unreachable without massive investment in local staff and infrastructure in each and every country where a person wanted to do business. This borderless community confounds legislators and cultural purists worldwide who do not know what to make of the Web-based globalization phenomenon that threatens to make their geographic, political, economic, and cultural boundaries almost meaningless. It places new burdens on companies suddenly confronted with inquiries from far-off places. Your firm’s most visible online channel—the corporate headquarters’ Web site—exposes its values and products to the inhabitants of the Eighth Continent every minute of every day. These people challenge organizations to make geography irrelevant in the name of satisfying customers. For many of you within these organizations, the Web has made this international demand transparent for the first time because in the past, their interest was always filtered through the noisy channels of local staff, distributors, and suppliers. With the Web, the denizens of the Eighth Continent can bypass these middlemen and tell you directly what’s on their minds—and on their viii Business Without Borders buying agendas. This free-flowing communication imposes hefty new demands on companies that want to stretch beyond their domestic markets and become suppliers to the Eighth Continent. One of the most common mistakes among companies today is assuming that being on the Web makes you an instantly global success. Despite the Web’s potential in opening new channels, presence on the Web also may expose places where your company has nothing worthwhile to say or sell. Being on the Web may very well reveal that your products and services of- fer no value outside your domestic markets because your company, its organizational structure, and its products are profoundly local. Success on the Web demands that you have worked to globalize your company, its products, and its market. This book is dedicated to getting you to a su- perior level of globalization, making it possible to market your products worldwide. Most executives spend their days trying to increase revenue and improve customer satisfaction. This book addresses these issues from an international and domestic ethnic marketing perspective, dealing with the market entry, organizational, and technical issues that form the foundation of an international marketing strategy. Becoming a Business without Borders This book introduces the best practices of global leaders; it is about the globalization that you do not hear about when the evening news follows protesters in Seattle, Prague, and Genoa. I will not echo the op-ed page of major newspapers and rant about the homogenization of world culture or other things attributed to the global economy; rather, I will investigate the potential ways in which the Web can dramatically affect your business on a global scale. I will investigate the ways in which your company can lead with the Web to create a great experience for international customers, business partners, and employees. But even the best online strategy must touch every part of the company; a globally aware Web site backed by an isolationist business will fail. Since I first wrote about the borderless world of the Internet while a principal analyst at Forrester Research,1 I have consulted with companies as an independent strategist, as the representative of a software company, and as an executive advisor to industry organizations. My global inquiries have taken me through many conversations, interviews, and planning ses- sions with international business aspirants. Introduction ix • Each discussion started with a fervent commitment to doing some kind of business internationally over the Web, whether it was simply providing information, selling goods or services, or simplifying customer support. • Each interaction proceeded through a thicket of product, organizational, regulatory, and technical challenges created by doing business first on the Web, then on the global Web operating in other languages, with foreign currencies, and under the laws and regulations imposed by other governments and commercial systems. • Every consultation ultimately involved non-Web units of the company as we dissected corporate budgets, marketing plans, transaction pro- cessing systems, and all of the other operational underpinnings of a modern business. Successful firms viewed the Internet as an integral component of their communication and commerce mix. There are cases in which companies I consulted for decided not to go global, figuring in most cases that they were not ready to make the endur- ing organizational and budgetary commitments to new markets.

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