Global Expansion and the Need for an Effective Distribution Channel Strategy


Successful companies have a fundamental understanding of what their customers want and how to provide solutions they will buy. They also understand where and how their customers want to buy. This success is ultimately dependent on the efficiency and scope of the company’s go-to-market strategies. Therefore, optimizing their distribution channel strategy is a crucial factor to companies achieving sustainable growth and competitiveness in both their domestic and foreign markets.

The rise of emergent market middle class and the resurgence of developing economies in the past two decades have accelerated globalization at an exponential rate. Tantalizing new opportunities in regions such as South East Asia and the Gulf Cooperation Council are complicated to achieve but impossible to ignore. Most companies are aware that global expansion carries risks but few truly appreciate the need for a comprehensive market entry strategy and the supplemental research. This is understandable; domestic success often breeds complacency and even undue confidence, the idea that “if it works here, it will work there” is not an uncommon one in the contemporary SME. Not uncommon but dangerous, understandable but avoidable. Many companies experience significant setbacks in growth and even bankruptcy following inefficient market entry.

Weaknesses and inefficiencies within a company’s distribution network can have detrimental consequences to both short-term financial results and long-term competitiveness. Additionally, poorly managed distributor relationships are an entirely preventable drain on supplier’s resources. These effects are significant within a domestic market but in a foreign market they can be disastrous. Potential consequences arising from ineffective market entry are poor-fit partners (often with exclusivity contracts); misaligned distributor objectives and cultural conflicts that disrupt channel partner relationships before they have a chance to succeed. This inevitably results in a failure to reach end-users allowing competitors the opportunity to establish significant market presence in your absence.

To achieve successful market expansion companies must engage in comprehensive market research to ascertain, not only the economic status and cultural preferences of the target market, but also to investigate the key players in their sector and the best-fit partners to sell their product and, ultimately grow their business. The factors to consider are numerous and diverse. Market maturity can guarantee stability and sustainability but may yield low margins through competitive pricing in a saturated market. Alternatively, emerging markets may yield greater margins at greater risk. Effective research applied to a methodical channel development strategy will reveal the intricate details of a target market, allowing suppliers to make truly informed decisions. When eventually a supplier is faced with choosing a distributor, they would do well to consider potential future market entry strategies. Larger distribution companies often have presence in multiple markets so a single long-term contract could yield multiple market entries facilitated by an ally that knows those markets well.

Market expansion is not just that, it is also a diversification of a company’s market portfolio. To maximize opportunity and dilute risk, companies should avoid over concentration in one region or sector and the eternal temptation of putting too many eggs in one basket!

International expansion of a company can be challenging but a comprehensive and methodical strategy that is founded in considering the
distribution channel needs of each market separately will yield success. For any company considering or currently initiating expansion and diversification, start now! Develop and apply a global distribution channel strategy to support more effective business strategies, increase profitability and drive sustainable growth.

5 Uses For Companies

4 Things to Consider When Choosing a Payroll System Installing a payroll system is one of the ways in which you can improve efficiency in your business. You can easily calculate your employees taxes as well as their wages using a payroll system. There are different payroll systems in the market that you can choose. You should consider the needs of your business to determine whether a particular payroll system will be right for you. Look for a system that will take care of your immediate and future needs. Here are some things to keep in mind when looking for a payroll system: Is the Company Reputable? Consider the reputation of the company you want to sign up with. Look for a provider that has an established track record. You do not want to buy a payroll system from a company that is not well known in the market. Your business should not be the one to test a new payroll system in the market. You cannot know the problems you may encounter with a new payroll in the market, which can negatively impact your company’s performance. The best option is to choose a payroll system that has been used by many businesses in the past and whose developer has a great reputation.
Programs – Getting Started & Next Steps
How Much Will You Pay for the Payroll System Consider your budget when looking for a payroll system. There are different payroll service companies in the market that are affordable. It is easy to find an affordable solution for your business when you do some research. Apart from cost, check whether you will be required to sign a contract. You are likely to find a payroll system whose provider will charge you monthly usage fees. It is highly unlikely that you will be required to sign a long-term contract by any payroll solution provider. However, there are a few that required annual commitments.
Understanding Companies
What Features Does the Solution Have? Keep in mind the features you would need in a payroll system to make your business more efficient. One of the basic features that a payroll should have is ability to pay your employees. Moreover, it should enable you handle taxations. Paid-off-time-management, garnishment payments, direct deposits and multiple wage rates are other capabilities you may be interested in. However, keep in mind that the more advanced features a system has, the higher its price is likely to be. Integration Options It is also good to find a payroll system that can be integrated with the business software applications used in your company. For instance, you may want a payroll that can be integrated with your current accounting system. You may also want a system that can be integrated with your customer relationship management (CRM) and enterprise resource planning (ERP) solutions.