THIS POST IS AN ENGLISH TRANSLATION OF THE ARTICLE “IL CORAGGIO DI GUARDARE FUORI DAI CONFINI” PUBLISHED ON WALL STREET ITALIA MAGAZINE (ISSUE 6, JUNE 2022) BY MATTEO VITALI.
For a growing business to expand outside national borders is a treacherous but inevitable process. Help from international professional networks can be helpful.
International operation has always been one of the crucial steps in the growth of a business. From some points of view inevitable in order to make a quantum leap, from others insidious because it implies a real revolution within the company. We talked about this with Fulvio Italiano, Executive President of BDB Network, present in more than sixty countries, also in light of the complexities introduced by the current crisis scenario.
The sectors where we are experiencing the most difficulties – Italiano explained – are definitely the luxury sector, which has often focused its assets toward, Russian customers, and the energy – intensive industries in general, whose earning have been eroded significantly by the rising cost of raw materials. Overall, for 2022, we inevitably expect the international operation to shrink, especially for companies that have to start from scratch”. Companies that are already abroad, on the other hand, will continue to expand.
“For let us not forget that even now, but especially at the end of the conflict, great opportunities related to the reconstruction of areas under attack are emerging and will develop – underline Italiano -. For companies in the Belpaese it will be important to be present and active in support toward local productive realities and institutions.” From this point of view, the most interesting sectors are those related to infrastructure revitalization.
The steps in the international operation process described by Fulvio Italiano for an Italian company whishing to operate abroad are far from trivial. The first step is definitely the definition of the industrial project – he explains. Internationalizing first means having plan, a service or product offering that must be expendable in certain markets. This may also involve creating something completely new, dedicated to new international targets. The next step is to identify which markets are suitable for your offering. Identifying the geographic area (s) is essential.
The third step is to figure out how to structure the company before going abroad. Are there skills in the company that can follow the internationalization process? Is the digital identity and presence suitable for use from multiple countries? Are there logistical issues? Last step, of course, is to define a budget, and possibly figure out how to raise resources. Internationalizing basically means opening a new company in a high country. It takes a completely new business plan, that is sustainable in the medium and long term.
With all this done, the real business begins, landing in the new market. This requires having the right local partner, as well as a business and industry strategy such that the operation is not perceived as an invasion. The key in the last phase is always to ally with the local system, not challenge it.” Of course, in the course of the process described, there are moments of greater difficulty and aspects that more than others can put the project in crisis. In 99% of cases of failure, according to Italiano, the blocking factor is anxiety. Anxiety given by poor planning and scarcity of budget.
BDB Network statistics, based on 150/200 companies, tell us that already after the fourth month the entrepreneur shows signs of distress. Italiano resumes: “Companies that think they will break even in an extremely short time often abandon the project and collect a loss.
In this sense, a typical mistake is to expect that a brand that is very famous in Italy, merely because it’s Italian and has existed for 50 years in our country has the same incisiveness in a market where no one knows it. A further problem is generational.
The tendency here is to think that the internationalization project can or even should be the prerogative of the younger generation, that is, the entrepreneur’s children or grandchildren. However, the new recruits do not always have the skills, experience, incisiveness and corporate culture necessary to be able to carry out such a complex project”.
BDB Network, which specializes in providing support for business development, crisis resolution, marketing and communication, has put in place several initiatives to make up for the critical issues caused by the Russia – Ukraine conflict: “First, by virtue of our network of international contacts and presence on the ground, we were able to begin the Export for Peace initiative, through which we make tons and tons of raw materials from Ukraine available to help local companies that continue to produce.
This is also thanks to the fact that our offices in Kiev are operational and we are in constant contact with companies that have the courage to carry on. Contextually, we are working with the governing bodies and authorities to try to make our contribution to the reconstruction and planning processes both already underway and to be put in place at the end of the conflict. Finally, we have provided a service to all Italian and international companies that need grain. There are 800 tons of wheat ready to leave for Europe. Many of these are stopped at the port of Odessa. But there are not only those stocks, there is other grain that can be transported by land, with containers of 40 tons each”.