This year I collaborated with 10 companies on the project promoted by FarExport and the Vicenza Chamber of Commerce, “Exporting in together 7 Steps”, inspired by my book of the same name.
Some of these companies had the common characteristic of having been successful on the Italian market, but of not having been able to satisfactorily develop their exports. Their turnover in Italy was 90% or more, while the remainder was divided among many markets without having a significant market share in any of them. In other words, the business owner had managed to build a success story on the Italian market, but had failed to replicate it abroad.
Often at fault are the export managers who, according to the business owners, are not good enough. During my collaborations I have worked closely with them and can say that in most cases the fault is not theirs. The causes of the failure are to be found elsewhere. There is an initial mistake that is made when a company tries to replicate the Italian success model abroad.
Here are 3 examples:
- the best-selling product in Italy is often not the same one in the other markets, but the company continues to emphasize and invest in this product (for example the product is always in the foreground on the home page of their website).
- the company catalogue is ready with a timeline that is designed for the Italian market but is often too late for other markets.
- certifications that are good in Italy are not the same for many other markets. One company discovered this when the goods were already in customs in the USA, thereby paying high storage costs and eventually destroying the goods.
It was 1977 when Richard Normann – a well-known consultant on business development issues – proposed a model for interpreting successful entrepreneurial cases that is still relevant: the Business Idea. It defines it as a system of coherences between product, organization and market, which allow the company to dominate a niche market.
As the Business Idea model explains, success on the Italian market is explained by the system of coherences between the 3 elements: market, product and organization. In particular, the product and the organization have been modeled on the Italian market. However, if one of these 3 elements changes, in our case the market, the system no longer works and must be thoroughly rethought.
I talked about these themes in my post “Export Strategies for 2019’”