Article

23.09.2020

Internationalisation: which strategy should you apply?

Conquering international markets is an indispensable growth lever for companies. Such a project can take different forms or follow different paths: from e-commerce to mergers and acquisitions.

International expansion can be an important growth factor for your company and an undeniable source of opportunities – both commercially and in terms of innovation or resilience. After a complete assessment of your current situation, an inevitable question follows: which strategy should you apply to realise your project? There's no magic formula or mapped-out path: in reality, you often adopt a wide-ranging approach based on various strategies. Nevertheless, we do see some broad outlines. And each has its own strengths and limitations. Whatever you decide, your choice should fit into an overall thinking and be in line with the current situation and the future of your business. The objective? Increasing your chances of success and keeping the risks under control as much as possible. 

1. Direct and indirect export

This is naturally one of the most widely used strategies for conquering foreign markets. You can sell your products abroad through one or more channels:

  • E-commerce: E-commerce is a fast and accessible solution to get 'far' with limited resources. Internet sales have grown very strongly in recent years but have a significant impact on the logistical workload. This includes not only technology and conformity, but also the commercial aspect. You are far from your target market and must deal with competitors from all over the world, while the internet knows no borders – and that's both an asset and an obstacle.
  • A local intermediary: A gamble without too many risks, because you make use of the power of local sales – your agent delivers the customer's orders locally and you transfer them. The only thing left to do is to decide how to distribute your products. In this regard, it's important that you make full use of your knowledge of the foreign market. Think, for example, of consumers' consumption habits and expectations. Although this approach does not require major investments (payments on commission), it isn't entirely without risk. The success of your project is entirely in the hands of your local contact, leaving you to count on that partner's reliability.
  • Commercial distribution: A similar approach to conquering the international market. This strategy can be implemented quickly and is the result of cooperation with independent distributors who are based in your target area. They buy the goods and then sell them, enabling you to benefit from their expertise and network. Unlike the intermediary, this distributor takes several tasks off your hands (invoicing, collection, marketing costs or import costs). Choosing the right partners and determining the terms of the contract is no easy task. After all, your project's success depends on it...
  • Transfer of patents or technology: This is a way to make your know-how or technology pay off, not your products. This transfer of skills gives a foreign entity the right to use your methods or innovation within the framework of a previously established contract (geographical area, duration, etc.). An opportunity to go international where you 'outsource' production, sales and distribution. Contract preparation is one of the stumbling blocks of this approach.

2. Local establishment 

Another model for internationalisation is to establish your business abroad. This means that you go local: you establish your entire value chain in another country, or you produce, distribute or sell your products there yourself. This geographical approach necessarily requires greater investment, but it also gives you more clout. This approach is also a way of reinforcing your resilience: the financial and commercial risks, as well as the pressure on your value chain, are spread over several areas. Over the years, a more flexible approach has also been introduced, allowing companies to move more flexibly in line with the international situation. Various options are also available here:

  • Subsidiary or branch: In both cases, it's a matter of establishing a firm and lasting foothold in the local market. However, the project requires a solid foundation and a long-term vision. You should also think carefully about the legal status: do you opt for a subsidiary or for a branch? Consequently, when making this decision, take into account various factors: the degree of autonomy, the desired degree of decentralisation or consultation, the legal and tax implications, whether or not to produce locally (to take advantage of cheaper raw materials, for example), the financial resources that you can mobilise, and so on. In any case, a perfect lever for applying the well-known formula 'think globally, act locally'.
  • International joint venture: This principle is based on the creation of synergies. Your company joins a company that already has a local presence and both companies complement each other. Each company benefits from the other's strengths while sharing the activity's risks, control and common costs. Such a joint venture or partnership often requires a customised legal structure. As you can see, a joint venture is not an easy marriage. It's therefore crucial that you find the right partner and come to an agreement with them concerning each party's input and responsibilities.
  • Merger or acquisition: This growth strategy offers a few advantages. What's the greatest advantage? A merger or acquisition is a method of consolidating and diversifying your business. It's also a 'quick' way to conquer a new market by exploiting the local company's competitive advantages (technological, commercial, etc.). Such a project naturally entails not only potential benefits, but also risks. For example, you may misjudge the sources of value creation or the risks, or have difficulty integrating.

As you can see, your international project's success depends on many factors. And, first and foremost, on your own strategic choices and your ability to develop a clear vision of exactly what you want to achieve. From the development of a commercial partner network to a sustainable local presence, there are many options that deserve not only thorough consideration, but also professional guidance.

 

Ready to do business internationally with confidence?
Contact us 
Article

16.09.2020

A full 'assessment' before you go abroad

We can no longer deny the benefits of internationalisation. But is your business ready for it? A thorough assessment to measure your project's success is therefore a must before you cross the border.

Just because your business is doing well in our country doesn't mean that you can just jump into the export market. An international breakthrough is an important strategic (and necessary) choice that requires extensive preparation. The first step is to take a detailed look at the state of affairs of your company. Because that way you can:

  1. Highlight your strengths and success factors: a specific skill, your expertise, your brand image, etc.;
  2. Identify your weaknesses: both internal (poor knowledge of the target market, need for funding, etc.) and external factors;
  3. Prepare your structure for 'new' demands: in terms of human resources and in financial, organisational, legal or commercial terms;
  4. Draw up your roadmap: make the necessary changes, maximise your assets and find the right solutions for your weaknesses.

 

A COMPLETE TOOLKIT

Such an assessment is not market research in the literal sense of the word, although some elements will eventually overlap or complement one another. The assessment should also enable you to gain insight into existing opportunities (competitive advantage, commercial trends, etc.) and threats (changes in legislation, major competition, etc.). To do that, you must be able to look at your foreign target group with the necessary distance.

There are many tools for this. Examples include the SWOT analysis, Porter's five forces model, the Boston Consulting Group matrix or the PESTEL analysis to measure the influence of macro-environmental factors. So, feel free to use those tools, but also remember the importance of step-by-step guidance.  

 

A MUCH-NEEDED SELF-ANALYSIS

Give attention to different elements. To achieve a relevant assessment, you must also find answers to a series of important questions:

  1. Create your 'identity card'
    Take an unbiased look at your organisation. What are your values, culture, references, image, etc.? How are you perceived by others? Does your positioning match your identity? Through these questions, you'll also gain insight into the reasons for your successes and failures on the international market. It's interesting to repeat the positive points and learn from your mistakes. 
  2. Analyze your position on the domestic market
    Take stock of your commercial position. Examine the evolution of your recent results and your weighting in your segment (market share, competition, degree of dependency, etc.). Find out what stage your products and services are in (launch, growth, saturation or decline). Next, you can consider your market's prospects and future: how will it evolve? A very important question at a time where the challenges of the sustainable transition are radically changing many sectors.
  3. Assess your products and services
    Each country has its own specific obligations and standards. So, ask yourself whether your products and services are 'compliant', both commercially and legally. Perhaps you need to adapt them? Or maybe your production or delivery method needs to change (e.g. to respect the cold chain and guarantee reasonable delivery times)? In other words, are you ready for the step from a commercial point of view?
  4. Lay bare your capabilities
    If you want to conquer foreign markets, you must be able to cope with that growth rate on an operational level as well. Can you increase or adapt your production capacity to the new demand? Are you ready for that in terms of supply and logistics? Also take into consideration the reliability of your partners and suppliers. And don't forget that your inventory will increase, and you must also have guarantees in that regard as well.
  5. Examine your financial situation carefully
    Going international means a big investment for your company. So, take a close look at your finances and see whether you have enough funds to bring the project to a successful conclusion. You need these resources, for example, to launch commercial initiatives locally (while waiting for the first revenues), to 'transform' your company in the necessary areas, to support your activity in your own country or to recruit additional staff.
  6. Carry out an analysis in the area of human resourcesTo export, you need qualified and skilled staff (production, sales teams, communication, after-sales service, R&D, etc.). You may also need to train staff or recruit new talent with international experience. Although internationalisation can be an extra motivation for your employees, it will also require additional efforts from them. So, don't lose sight of the 'human' factor either!

 

This complete audit of your structure gives you everything you need to make the right choices. Have you got the commercial strengths, the human and financial resources, the operational capabilities and the necessary experience to take the step? Do you need some extra support to adjust certain parameters? Or are you postponing the launch to find the right solutions for some weak spots? The adventure can begin once you're ready!

 

Ready to do business internationally with confidence?
Contact us 

A subscription to build customer loyalty, reinvent yourself in times of crisis and buy better: Emna Everard saw that as exactly the right way to launch and maintain her Brussels-based start-up.

Born into a family of dietitians, Emna Everard knows what it means to eat healthily. "At the age of 12, I was already deciphering packaging labels. My dream was to open a supermarket one day where you could shop with your eyes closed", she recalls.

And because Everard has entrepreneurship in her bones, that’s exactly what she did. In 2016, just before the end of her university studies, she launched the “healthiest online supermarket on the market”: Kazidomi. Her standards are high, both in terms of composition and taste. Kazidomi selects products carefully, enabling its customers to buy healthy, mainly organic, plant-based products with complete confidence.

The loyalty programme

Six months after its launch, Kazidomi’s growth is accelerating thanks to the launch of its loyalty programme. A 59 euro subscription offering 20–50% discounts on all food, cosmetics or care products available online. Profitability and savings guaranteed.

This was followed by a first fundraising of €50,000 in 2017. Kazidomi is growing, expanding the size of its stock and developing its marketing. Everard hired her first two employees. Sales grew rapidly and literally exploded during the COVID-19 pandemic. "Consumers suddenly had time to think about their health and well-being and were doing most of their shopping online," she adds.

How did you reinvent yourself?

The post-crisis period was a turning point. "Kazidomi had to reinvent itself. We wanted to have financial stability and avoid any dependence on external resources," continues Everard. Together with her teams, she looked at their cost structure, operational efficiency and marketing. After these reflections, the aim was no longer growth at any price, but the company's long-term viability and financial health, thanks to an intelligent reorganisation.

Two acquisitions would subsequently enable Kazidomi to boost its growth, creating significant synergies: "Smart Fooding" in August 2022 and "Bébé au Naturel" a few months later, a business specialising in healthy products for babies and their parents. "With Bébé au Naturel, we doubled the volume of orders sent out," adds Everard. "This has allowed us to get a better rate from our carriers and reduce costs."

A responsive and attentive bank

As the Brussels start-up’s bank, BNP Paribas Fortis granted it three loans for its launch, between 2016 and 2019. This support came naturally, with Kazidomi’s commitments in terms of Environmental, Social and Governance (ESG) objectives perfectly aligned with the bank’s strategy. "We joined the BNP Paribas Fortis Innovation Hub programme and our relationship manager – who knew the start-up environment extremely well – was immediately enthusiastic and very attentive. He believed in our project, followed it closely, advised us to participate in a series of events to meet other players whose background and profile would be of interest for us," explains the Entrepreneur of the Year 2019.

But the support didn't stop there. "In December 2022, it was thanks to BNP Paribas Fortis, among other things, that we were able to acquire “Bébé au Naturel”. Start-ups like Kazidomi need a high level of responsiveness from their bank. When there is a company to buy, or another opportunity, things have to move fast. Analysis of the file, provision of funds: BNP Paribas Fortis has always been responsive and enthusiastic and has supported us in 99% of our requests," says the CEO enthusiastically.

Eight years since launching, Kazidomi today has 4,000 products that it delivers across Europe. The Belgian start-up makes 90% of its sales on its website and 10% via external resellers, such as Delhaize.

Kazidomi has also launched its own brand “Kazidomi”, which has 200 products on offer. By working directly with producers, we can offer the best possible quality products at the best price.

https://www.kazidomi.com/en

Kazidomi is ready to change the world. Discover even more inspiring entrepreneurial stories.

Cosucra is investing in the decarbonisation of its production processes. Their focus is on using plant-based protein from chicory and peas for a healthy and less polluting diet.

Belgium’s Hainaut-based Cosucra has been operating since 1852. The company is quite small with 365 employees, but its activities have evolved over time. From the 1980s onwards, sugar beet processing gave way to chicory and yellow peas. Also, sugar was replaced by inulin and pea protein.

"Many families lack the time to put a fresh meal on the table every day. With our products, the industry can offer them easy, quick and nutritious meals," says Eric Bosly, CEO of Cosucra. "Nutritionists stress the importance of fibre and plant proteins for health, and such a diet has a positive impact on our carbon footprint."

New investors

To take their decarbonisation a step further, in 2023, the company launched a seven-year investment plan worth EUR 150 million. “We are keenly aware of the climate crisis, so we wanted to make this transition fast,” says Bosly. “That's why we brought three investors on board who share our values and are willing to commit in the longer term.”

Long-term relationship

Cosucra and BNP Paribas Fortis have a long-standing partnership. "The bank has supported us in expanding to Denmark and the United States. It's of great value to have the same contact person for setting up the financial structure of subsidiaries, opening accounts abroad, etc. We also meet regularly, which means we can count on the expertise of teams specialised in the food industry. Their macro vision complements that of our local account managers who know our business well."

Same market conditions

Cosucra’s efforts will result in a 55% reduction in CO2 emissions within three years. Yet, decarbonisation is just one of Bosly’s bold ambitions. "We are pushing for the same market conditions as animal proteins. Why, for example, is 20 per cent VAT levied on pea-based milk while for cow’s milk, this figure is under 6 per cent? Plant-based products are also more expensive because you can't achieve economies of scale due to the lower quantities required. If you consider all the “negative external effects” of animal products on human health and the environment, our sector deserves support until we reach a certain scale."

Change of mindset

The entrepreneur also laments how the retail sector uses meat as a decoy product, lowering its margins to offer consumers an attractive price. "In times of inflation, that price difference is all the more detrimental to us. This is why a change of mindset is essential. Nutritionists say that a weekly serving of just 200 to 250 grammes of meat is enough to get the nutritional benefits with no negative impact. But at the moment, most Belgians consume 200 grammes of meat per day."

Bosly also cites competition from imported agricultural products as an obstacle.

Cosucra is ready to change the world. Discover even more inspiring entrepreneurial stories.

"The European Green Deal aims to reduce inputs by half, leading to the ban of many herbicides, among other things. Farmers should be supported in this transition. And a company like Cosucra, which buys chicory and peas within a 200-kilometre radius, is not on an equal footing with strong Chinese competition."

Since 1796, Brepols has been producing diaries that allow you to better plan your time. The team is fully committed to people, the planet and prosperity.

"From Turnhout to a branch in Paris, our 110 employees create tools that help our customers manage their time better. And that benefits their work-life balance," says Finance Director Philippe Pissens. "Quality, craftsmanship and creativity are at the heart of our products. Brepols’ diaries, calendars and notebooks are not disposable products - they easily last a year. We also make business leather goods under the Maverick brand and and we have launched a brand-new collection of high-quality notebooks under the brand name "de KEMPEN". In addition, we distribute the famous Moleskine notebooks. Finally, there are our bookbinding activities," he says. Brepols’ main markets are the Benelux and France.

Financially on track

Since starting out in 1796, Brepols has seen many trends and developments come and go. The last few years have been marked by growth. This is thanks to the Financial Director, who came on board in 2000. With turnover of EUR 17.4 million in 2021, EUR 19.6 million in 2022 and EUR 20.8 million last year, the company is clearly on the right financial track. "These figures are not just a result of price increases. We are a strong company with a solvency of 70 per cent, which means that we only finance 30 per cent with external funds," he explains.

More than planting trees

"Since 2009, we have only used Forest Stewardship Council (FSC)-labelled paper. For every tree cut down, a new one replaces it. But there's always room for improvement. In 2022, we launched a project group comprising staff across the company. We call it P3, because we focus on people, the planet and prosperity."

The project group analysed the company’s strengths and weaknesses, with the employers’ organisation Voka acting as a sounding board. “We certainly didn't want to make the mistake of greenwashing,” says Pissens. Specifically, Brepols developed 18 action points, which means it already covers nine of the 17 Sustainable Development Goals. In addition to a charter, there is a code of conduct that suppliers must sign and respect. Other initiatives include focusing on local production, limiting residual waste, reducing energy consumption and developing a HR policy that takes diversity and inclusion into account. “The aim of this project group is to create internal and external support and communicate clearly with all our stakeholders.”

Fluid organisation

"Honesty and transparency towards our employees are top priority," Pissens continues. "We have intensive consultations with them, both formal and informal. We deliberately opt for a fluid organisational model, between the hierarchy and the self-managing teams, and there has been a high level of participation. This is crucial as a quarter of our employees will be retiring in the next three years. In this context, we also purchased cobots, which makes the work less physically demanding for our staff."

Clear communication

Pissens emphasises the importance of clear communication to all stakeholders, including its financial partners, such as BNP Paribas Fortis. "The bank has become key to our business operations. We provide our relationship manager with detailed figures and keep her up to date with our sustainable ambitions. Our contacts at BNP Paribas Fortis not only provide us with information about financial products; they also give us tips, such as measuring our energy consumption and the possibilities for subsidies to install solar panels, for example. We have an effective two-way communication. Our collaboration has grown into a real partnership. In our business, paying attention to Environmental, Social, Governance (ESG) aspects is the benchmark in every consultation," Pissens concludes.

Quote

"The bank has become a key figure in our business operations”
Philippe Pissens, Finance Director Brepols

Brepols is ready to change the world. Discover even more great stories from entrepreneurs.

Discover More

Contact
Close

Contact

We would like you to answer a few questions. This will help us answer your request faster and in a more appropriate manner. Thank you in advance.

You are self-employed, exercise a liberal profession, are starting up or managing a smaller local company. Then visit our website for professionals.

You are an individual? Then visit our website for individuals .

Is your company/organisation client at BNP Paribas Fortis?

My organisation is being served by a Relationship Manager :

Your message

Type the code shown in the image:

captcha
Check
The Bank processes your personal data in accordance with the terms of the Privacy Notice of BNP Paribas Fortis SA/NV.

Thank you

Your message has been sent.

We will respond as soon as possible.

Back to the current page›
Top