The recent economic crisis has confronted companies with major challenges. Small and medium-sized businesses, in particular, seemed to have a customer base too reduced to maintain their business. In such a situation, there are two options: invest in developing new customers, or, invest in developing new and more attractive offerings.
The first option requires strong marketing and sales skills. The second option builds on strong innovation management capabilities to deliver new products, services, or business models. Of course, the best option is to have both broad high-potential customer base – ideally in different countries – and strong innovation management skills.
According to Annique Un, an associate professor of International Business and Strategy in the D’Amore-McKim School of Business at Northeastern University, innovation is an important topic for any organisation. Thus, exploiting innovation for international markets is a promising growth opportunity to counter the crisis.
The decision to go international requires a profound analysis of the chances to succeed. This includes the assessment to what degree the trends that the company is already monitoring also apply for the targeted international markets. It also requires deep customer intelligence for effective market segmentation.
Furthermore, a sober analysis has to take place whether the defined search fields and the core capabilities of the company will allow for a successful entry in the international market. Here, not only the local competitors are to be monitored but also potential international competitors.
The strategic decision to internationalise has an impact on the innovation processes. The company should assess to what degree the selected ideas can contribute to profitable growth in the international market. The same applies during the development of the idea into a new offering.
Innovative companies that currently focus on process innovation to reduce cost might consider first reaping the results from better cost competitiveness. This gives strength to re-enter the profitable growth path with innovative products, services or business models.
Financial strength is essential as different payment and pricing schemes might result in unexpected cash-flow issues. Well-planned innovation for international markets will pay off – and maybe will help to master the next crisis even better.