If you want to launch your business abroad, you need to draw up an internationalisation plan, i.e, a business plan for your company's activities in international markets. The CANVAS is an excellent tool to focus on what is really important for successful internationalisation.

What is CANVAS?

The CANVAS answers the most important questions that must be answered in order to internationalise successfully:

• WHO? Customer segment (+), target countries.
• WHAT? Value proposition (+), segment-adjusted and validated solution.
• HOW? Key activities (+), key partners in each country, key resources.
• HOW MUCH? Customer cost and revenue structure (+). Profitability and financing.

The CANVAS is a graphical, interactive, convenient way to develop a business model.

It is a template or "canvas" that will help you visualise the different value areas and how they should relate to each other, so that your business idea can become a viable enterprise. In this way, your internationalisation process can achieve the desired results!!!

VALIDATION OF THE INITIAL CANVAS

You start with an initial CANVAS that simply is a set of hypothesis (+), things you have thought with your intuition. These are just conjectures of yours, more or less based on your experience, or more or less invented, but not really proven!!! So, as you test their validity, through customer interviews, experiments, questionnaires, etc. You will change it, and this is validation.

Experiments, yes, of course, you must check everything you are assuming could happen!!!

Internationalisation plan

You have validated that you have a value proposition that satisfies customers in other countries and that you can adapt your product to make it exportable.  You have a clear understanding of your resources, key activities and cost structure, and you have the necessary resources to finance your international activity.

The next question is: What to do? How to act?

It is clear that you cannot address every market in the world, nor can you take every action; the resources you have are limited and you must plan how to use them optimally. You have to prioritise markets, and choose the most appropriate actions. In a nutshell, you have to draw up an action plan to address and develop your presence in international markets: this is the company's internationalisation plan. The elaboration of a simplified internationalisation plan, such as the CANVAS, facilitates cohesion between all the people in the company involved in international work. It ensures that everyone is on the same "wavelength". By participating in the elaboration of the CANVAS, later on, in its implementation, evaluation, rectifications, etc. The employees involved can maintain coordination and avoid contradictory actions or strategies. The elaboration of the CANVAS will be an exercise that will allow the company to reflect on and analyse its capabilities, weaknesses, needs, etc.

In this way, you will be able to approach your internationalisation process, not in an improvised way, but with a solid foundation that will increase your chances of success. The CANVAS will not be fixed, immutable: it is likely to be readjusted during the course of its development. You will want to modify it based on the results obtained and the company's experience. However, it is advisable to have an initial tentative plan, which sets a course to follow. In many cases, you start internationalisation because of what we could call an "opportunity": a foreign buyer contacts the company interested in your product, because someone has recommended it to them, they have seen it on the Internet, etc. In this case you also have to make a plan not to move alone with the opportunities!!!!

Concretising the CANVAS:

WHY?

OBJECTIVES:

Your company should identify and set out in the plan what the objectives of your internationalisation process are.

• Is the objective to increase sales, turnover, with all that this entails: growth in profits, size, employment, etc.?
• Is the aim to increase competitiveness by reducing costs by establishing in other countries where production costs are lower?
• Is the objective to gain access to new technologies?
• Is the aim to be close to the demand, in order to know it better and to be able to adapt better to it?
• Or simply to circumvent trade barriers that hinder sales in that market?

There may be a single objective - the most common will be to export, to increase sales and turnover - or there may be several objectives at the same time.

FOR EXAMPLE:

Establish a presence in a market such as China's to be close to consumers and take advantage of lower costs, as well as to avoid tariff and other barriers.

WHO?

CUSTOMER SEGMENT (+):

The plan must identify the priority markets for the company. This is undoubtedly one of the key points of an internationalisation plan. It requires significant research work, consulting market studies, gathering information from the various sources available to the company. One company cannot address every market in the world.. As we indicated at the beginning, the resources a company has are limited. You have to allocate them in the most efficient way. And therefore you have to select markets.

WHAT?

Identifying customers means discovering the problem that your company solves. You must identify the type of product you want to sell or produce abroad. In particular, you should analyse and identify whether the product needs to undergo some modifications, in order to adapt to the characteristics of the market (or markets) in which you are going to sell it. (See+ TIP)

HOW?

KEY RESOURCES

The team that will be involved in the international work, with its responsibilities, division of tasks, etc. You must identify the talent profile you need for the international activity you plan. You must continue, see whether you have such staff or whether you need to hire new staff or external consultants. You should also consider whether your employees need any specific training. Once personnel have been identified, the company must organise its internationalisation departmentIt should be headed by a director, with a division of responsibilities among all its members.

KEY PARTNERS

The strategy for entering foreign markets, defining issues such as whether to sell through agents, directly, through importers or distributors, in the case of exporting. But the company also has to study whether it might be appropriate, some form of productive or commercial establishment. This decision to set up may come after a first stage in which exporting is the activity to be carried out.

CHANNEL

The business plan: the company must define what type of commercial activities are most suitable for it, and define a concrete plan for these activities.

FOR EXAMPLE:

If the company concludes that it is interesting to participate in fairs, it should identify the specific fairs in which it will participate. The same applies to participation in trade missions, organised by the (central or regional) administration, seminars, forums, etc.

Digital strategy

Digital marketing

This is a component that has acquired great importance in modern times. The digital strategy must include the actions that the company is going to develop on the Internet and social networks. This is a "horizontal" aspect, in the sense that it can affect several activities of the company. The internet can be a channel for recruiting talent, through networks such as LinkedIn (+). It can also be a commercial instrument, through which potential customers can be contacted. It can be a marketing tool, since, through the presence in social networks (+) consumer feedback can be received, which can be used to improve the product and adapt it better to consumers' tastes. The Internet can even be a channel (+) to sell directly, through E-commerce. It can be developed either from a company's own online shop or from the establishment of a company's own online shop on market places such as Alibaba or Amazon. A company's digital strategy will depend on several factors, the first of which is the type of product.

FOR EXAMPLE:

A winery can consider selling wine through its own online shop or through a shop in a market place. But for an engineering company or a construction company, the thought of selling directly from the Internet makes no sense. In any case, the key message is that the company, in the framework of its internationalisation plan, must have a digital strategy.

OTHER ASPECTS TO BE TAKEN INTO ACCOUNT:

The aim in drawing up the plan, if the primary objective is to export, is to identify those markets where the company's product may have the best chance of success.The costs and difficulties of doing business in these markets are also taken into account. It will be necessary to study the demand for the product in potential markets, the facilities for accessing these markets (if they have high trade barriers, such as tariffs, or if, on the contrary, the market is accessible because there is a free trade agreement with it). If the The main objective is to localise production in order to reduce costs, it will be necessary to take into account these costs but also other aspects, such as legal certainty, political risk, etc.

COMPETITIVE ADVANTAGE (+)

Another important aspect to analyse is that of competitors. It is normal for a foreign customer to have several potential suppliers. The plan should analyse what are the main competitors that the company will encounter in international markets, strengths and weaknesses of their products compared to their own, their commercial and marketing strategies, etc. In this way, the company can identify what their main weaknesses (+) relative to its competitors and prepare to reduce or offset them.

REVENUE

Charging your customer located in another country is a crucial issue that you need to be clear about.

WHAT IS YOUR PRICING STRATEGY?

This strategy, which may be differentiated by market, should be elaborated from different elements: the company's costs, prices on international markets for similar products offered by competitors. Also, to be considered, a margin for contingencies, the profit margin and, logically, a margin for negotiation (this is the typical area where there can be significant variations between markets, with different bargaining and negotiating cultures). (See+ TIP)

FORMS OF PAYMENT (+)

If a transaction involves a deferral of collection, there is always a risk of non-payment. This may be for reasons attributable to the company - that it is in financial difficulties - or for reasons attributable to the country in which it is based. If the country has balance of payments difficulties and a shortage of foreign exchange, the importing company cannot obtain foreign exchange with which to pay its debt to the exporter. 

CUSTOMER RELATIONS

Apart from exporting, investment abroad may also require financing. Here, too, there are a number of financing possibilities, both from the private and public sectors, that a company planning to invest abroad should be aware of. Likewise, there is insurance for investments abroad, which can cover a wide range of risks - including political risks such as expropriation, or damage to the company due to war or conflict.

This TIP on CANVAS (+) will help you a lot. Download this word document to make your CANVAS.

It is important to understand that Each country has its own cultural, social, economic and legal particularities that can affect how a foreign company's products and services are received. It is therefore essential that a entrepreneurs seeking to expand internationally adapt their business model to each country they wish to conquer.

For example, a fast food company that is successful in its home country may find it difficult to succeed in another country if it does not adapt its menu and the way food is served to the cultural and culinary preferences of the destination country. The destination country may have different legal requirements and health regulations, which could affect production processes and product packaging.

PRICE

In addition, prices of products and services may also vary significantly by country and region. A price that may be appropriate in one country may be too high or too low in another, which may affect the company's profit margin.

COMPETENCE

Another factor to consider is the competition in each market. A country's market may be saturated with companies offering similar products or services, which can make it difficult for a foreign company to stand out and succeed in that market.

IN SUMMARY

It is essential that entrepreneurs adapt their business model to each country they wish to conquer. This involves knowing the cultural, social, economic and legal particularities of each country and adjusting the business model accordingly. If an entrepreneur does not adapt, he or she may succeed in his or her home country but fail in another country due to a lack of adaptation to market needs and expectations.

Adapting the business model in each country is essential for the successful internationalisation of a company. It is important to bear in mind that the customers, market and culture of each country are different, which means that the business model that has worked in the country of origin may not be effective in other countries.

To adapt the business model, it is necessary to adjust and validate the customer segment. This involves identifying the needs and desires of customers in the target country, as well as their buying habits and purchasing power. In this way, it will be possible to offer a value proposition that fits their needs and expectations.

In addition, the value proposition must be adjusted and validated. The value proposition is the set of benefits that the company offers to its customers to satisfy their needs. It is important to adapt it to the characteristics of the market in which you want to operate, as customers may have different needs and desires. For example, if you sell clothes in a country where the climate is warm all year round, you may need to offer products with light fabrics and cool colours.

Another important aspect to adapt is the communication channel. In each country, customers may have different ways of communicating and accessing information. For example, in some countries, traditional media such as television and radio may be more effective than social media. Therefore, it is necessary to adapt the way you communicate with customers to reach them effectively.

It is also necessary to adapt the way of relating to the customer. Each culture has its own way of interacting and doing business. It is important to know the customs and the way of doing business in the country of destination in order to establish solid and lasting relationships with customers and suppliers.

IN SUMMARY

Adapting the business model in each country involves making a new market product adjustment. This involves identifying the needs and desires of customers, adjusting the value proposition, adapting the communication channel and the way of relating to the customer. If done correctly, this will increase the chances of success in the internationalisation of the company.

EXAMPLES OF ADJUSTMENTS TO EACH PART OF THE BUSINESS MODEL TO ADAPT TO ANOTHER COUNTRY:

CUSTOMER SEGMENT

Suppose a company selling agricultural machinery in Spain decides to expand into Latin American countries. In this case, it would have to adapt its customer segment to the specific needs and demands of farmers in each country.

For example, in Argentina the company would have to focus on small and medium-sized producers, while in Brazil it could focus on large farms.

VALUE PROPOSAL

A financial advisory services company operating in the United States wants to expand into Asian countries. In this case, it would have to adjust its value proposition to adapt to the different cultures and customer preferences in each country.

For example, in Japan it could offer advisory services for investments in the real estate market, while in China it could focus on investing in technology start-ups.

COMMUNICATION CHANNEL

A manufacturer of beauty products in Europe wants to expand into countries in the Middle East. In this case, it would have to adjust its communication channel to adapt to the different cultural and religious restrictions in each country.

For example, in Saudi Arabia it would have to respect dress codes and use communication channels that do not show images of women, while in Lebanon it could use a more liberal approach.

CUSTOMER RELATIONS

An online clothing retailer in South Korea wants to expand into European countries. In this case, it would have to adjust its customer relations to adapt to the different cultural and behavioural norms in each country.

For example, in Spain you might use a more informal and customer-focused approach, whereas in Germany you might be more professional and focused on product quality.

In a nutshell, Each country has its own culture, norms and consumer preferences, so it is necessary to adapt the business model in each case to ensure that it meets the specific needs and demands of customers in each market.

How can we use chatgpt to adapt the business model to another country?

ChatGPT can be a useful tool for adapting business models to other countries.

SOME WAYS IN WHICH CHATGPT CAN BE USED FOR THIS ARE:

1. Market research: seek information about the market in which you want to expand your business. AI can help you gather information about the culture, laws, regulations and trends of the market in question.
2. Identification of potential customers: analyse and understand your target customer segment in the target country. AI can help you identify consumer needs and wants, as well as cultural and linguistic preferences.
3. Adaptation of the value proposition: adjust and validate the value proposition of your business for the new market. AI can help you analyse customer needs and wants, and modify your product or service offering to meet those needs.
4. Choice of communication channel: identify the most effective communication channels to reach potential customers in the new market. AI can help you analyse customer preferences in terms of communication channels, as well as cultural communication practices in that market.
5. Validation of adjustments: to validate your adjustments to the business model for the new market. AI can help you evaluate the effectiveness of the modifications made and identify any potential problems or challenges in the new market.

In generalChatGPT can be a very useful tool to adapt your business model to a new market. It can help you analyse and understand the target market, identify potential customers, adapt the value proposition, choose the most effective communication channels and validate your adjustments for the new market.