Lure of the Global Market space
During the technology heydays of the late 90s to early 00s, investors went mad for companies that demonstrated significant revenue growth, regardless of whether these companies had ever shown a profit. The thinking was that with exponential revenue growth, eventually the profit would follow…and when it did arrive, it would be huge.
After the tech bubble burst, the focus shifted to profit as the key factor on which companies were assessed and valued. As a result businesses have focused on cutting costs, improving operating efficiencies and concentrating on their core business strengths for the past four or so years. They have been opportunistic about sustainable growth while being careful not to sacrifice profitability, all the while awaiting more certainty in the local and global economy to drive the return to revenue growth.
With the continued uncertainty that 2006 promises, businesses must take advantage of the opportunities that exist today rather than waiting and hoping for a brighter future and a return to global prosperity.
In this environment, the pendulum has swung back and investors are beginning to once again clamor for revenue growth…not at the expense of earnings this time, but with the appropriate balance between growing revenue and sacrificing a bit of today’s profit to drive future growth.
So how do companies accelerate revenue growth? The textbook options for growing a business immediately come to mind: to expand within the existing client base, to grow the client base, to identify new applications for existing product lines, or to grow the product line. A few quick projections make it clear that growing the client base to reach beyond the city, to the province, to the country and to the world make exponential revenue growth possible. If you sell 20 gadgets in Edmonton, the market opportunity across Canada may be 3,000 and globally, it may be 300,000.
Growing internationally requires a strong infrastructure and a well management financial base. In addition, several aspects of business need to be rethought in light of the idiosyncrasies of the global market place.
International success requires a different type of sales and marketing. Outside North America, developing relationships is perhaps the single most critical aspect of the sales cycle as opposed to the typical North American focus on technology, features or price.
Consideration must also be given to other aspects of the business. For a technology company, how will you support an international client base? Will you need to translate various documents, including marketing materials into other languages? How will you ensure that your message has relevance, and not an entirely unintended meaning, in an unfamiliar language? Even major corporations such as Coca-Cola and McDonalds have had to re-brand and repackage to account for regional differences in culture, language and taste.
As an Albertan, I find the lure of the global market space intriguing. Even more intriguing is the huge opportunity that exists five hours north of Edmonton in the development of the oil sands. Here, the key will be in how local companies are able to compete against global organizations that are all vying for a piece of the action. Success will require the same rigor and energy necessary to develop a global presence.