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2009-08-18

Prepare for your foreign establishment

Anders Bergström from Global Consulting would like to give us valuable information on preparing for a foreign establishment. Anders says that a good preparation reduces risks.

One must think through carefully and understand what it takes to go out on a global market. The inclusion of personnel in this work is important and you must review if the skills of the staff are high enough.

For example, are there language skills within the company?

The reasons that companies are taking this step can be many. Some do this process in order to save the company, others to develop an already successful business and to increase profitability.

Anders says that it is very important to choose the right
country with the greatest potential for the company. From this perspective you have to examine the country´s business culture.

What about corruption and willingness to pay?


When you have solved these issues you will reach the point that
is very difficult. One complicated factor is budgeting sales in the new country.

Anders gives an example, if you are a timber company that
sells 200 houses a year in its own market. Then, the estimation is often that they will sell 50 houses in the first year, and 100 in the second year.

But what happens if you sell 10 houses the first year, and 15 in the following year? What is the economic sustainability like then?

The second scenario is to sell 800 houses in the first year
and 1500 houses in the second. Can you then manage the production?

Then told Anders that we must start planning for bringing
home the profitability and taxes, but that is another story.

                                                                                          Cecilia Helland

More information

Global Consulting AB – Contact information here
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