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Achieving Your Globalization Strategy Via The Web

By Katherine Pendill, Martin Berman, and Luis Rodiles, Hitachi ConsultingThere are a number of critical issues facing manufacturing companies in their globalization effort. Learn how the Web can create both a global and a local face to your customers and suppliers. Part 1 of a 2-part series.

Many of today’s industrial products companies are looking toward global expansion and international growth to increase revenues thanks to strong emerging markets and lower overhead costs overseas. However, with rising energy costs chipping away at offshore savings and struggles with the current world economy, the dream may seem hard to realize. But for those firms that view globalization as imperative while managing costs and revenues, Web sites can be a highly cost-effective way of enabling your globalization effort.

Your manufacturing organization may already have global operations -- but how can you use your Web site to begin, expand or shift focus to maximize revenue and margin opportunities? In the business-to-consumer (B2C) world, the Web is recognized as a channel, but in business-to-business (B2B), companies are only starting to explore the full channel potential of the corporate Web site, including:

• How it can help communicate with business partners and customers
• Support sales efforts
• Help after sales are closed

In the past, the first step often was to use a Web site as an informational site (often called “brochureware”). Web sites were also used as a data repository for information on lines of business, financial data, product lines, and supporting data such as drawings, specifications, and product manuals for use by customers, distributors, and other stakeholders.

Some manufacturing and industrial products companies are doing a better job than others with global Web sites. As an example, an international tire manufacturer’s promotional Web site for China and Korea received the Web Marketing Association's WebAward for Best Manufacturing Web site of 2008. This dynamic site has an impressive use of multimedia for marketing purposes and to provide product information. It is well-organized and provides direct links to the manufacturer’s home page and dealer locations for purchasing. The only downside is the wait time for the multimedia. Many companies still take this approach as the basic purpose of Web sites. But it’s just the first step.

Web strategy can be evolutionary throughout the entire Web site; modular in the case of a specific business unit or product line; or a combination of both, as long as the varied elements are harmonious. An organization can enter a new global market through a basic informational Web site and evolve in terms of more communication and transaction capability to higher levels of Web maturity (which we’ll discuss further in part 2 of our series).

Many industrial products firms originally embraced the Web in the hopes of utilizing the promised transparency that would save time and money, but the immature business models of the did not meet expectations. Thus many firms returned to “brochureware,” but a generation of decision-makers raised on using the Internet prefers to shop and communicate online.

A major European manufacturing and industrial products company, for example, has refined its functional purchasing portal. The company’s purchasing strategy is based on intensive cooperation with preferred suppliers. This process is supported through the implementation of electronic tools via its Corporate Supply Chain and Procurement portal. Available in both English and German, it guides users through essential information regarding procurement, including requirements for suppliers and an overview of the e-Procurement system. The site is easily navigable with a site map and clearly labeled resource links. The home page offers a user’s guide complete with screen shots and a step-by-step introduction of the various portal capabilities as well as a walk-through for registration.  A user administrator function allows access to user and organizational data on a supplier level. All useful functionality as a manufacturer’s Web site. However, there may be room for improvement in terms of form, space utilization, and link placement which currently requires users to scroll a great deal. 

What should a global manufacturer’s Web site entail? Some things to consider are:
• What products do you offer?
• Where are they offered?
• Who will you sell them to?
• How will you sell them?
• How will you provide information or support after a sale?

Services, providers, and functionality have evolved, and drawing upon lessons learned in the B2C sector, you can decide what will work best for you. Moreover, in these times of outsourcing, Software as a Service (SaaS), and cloud computing, you no longer have to “do it yourself.”

The Web is a window into your company -- What do you want customers/vendors/suppliers to see?

As in a traditional “brick and mortar” approach, a successful Web-enabled global market entry strategy must be sustained by understanding market specifics (e.g., consumer profile, competitive intensity, regulatory framework, etc.). But too often organizations do not do the proper homework when using the Web to move toward a new foreign market because the investment involved is much lower than in a more conventional approach, and thus perceived as a much lower risk.

The danger is that use of the Web site is seen more as a speculative play than as a strategic move. And even if the financial risk is low, the risk for brand equity can be high. In fact, a flawed Web-based operation can jeopardize a brand as effectively as a poor “brick and mortar” one. Messaging and branding have to be clear for investors, employees, both current and future, suppliers, and all stakeholders!

Additionally, with the rise in international business, issues such as language, international offices and workers, and eBusiness have become more prominent, and major firms are using Web sites to make it easier to do eBusiness. As an example, another major industrial Euro-American manufacturer is creating a portal aimed at manufacturers and is supplying a solution that can link suppliers/manufacturers back to the firm. The portal purports to provide an integrated, Web-based solution to improve plant management via on-line and process-based systems with plant-wide connectivity, Web-based visualization and some analysis, integrating third-party tools.

How much communication do you want with your customers/suppliers?

The rise of blogs, micro-blogs, user-generated content of all kinds has spurred many firms into creating some kind of two-way communication with customers. Some of this is valuable such as reviews, valuable input from “super-users” and customers, ongoing updates, and so on. But first you’ll need to ascertain if the people and processes are there to respond to questions or offer feedback. What about customer support or providing product information? We’ve learned from the B2C world that customers expect contact inside of 24 hours. Any longer than that and they assume you’re asleep at the wheel and will move on. Major B2C sites generally respond within four hours. Can you keep up with that?

Can they find what they’re looking for?

Frequently industrial products Web sites are hard to navigate -- especially when you factor in different products for different markets in different languages. What language do you want to use? What product do you want to use where? Search must be quick and comprehensive and deliver meaningful results.

That means clear site organization, good governance and a true focus on the user experience. What do your users want to find? Is the content relevant, fresh, and what they were looking for? In the B2C world, slow or failed searches are a major driver of abandoned shopping carts. In the B2B world, inadequate product information around such questions as availability, delivery and configuration can slow suppliers and vendors down, and if it’s a question of repair or a slowed production line, it’s critical.

eBusiness -- it’s not just eCommerce

Business on the Web translates into eCommerce for the great majority of people. But eBusiness is more than that -- it’s a channel to your customers, your employees, your partners, and to the world. For example, what if your customers could configure products themselves? Follow up on warranty or parts information? Find product manuals and schematics when they need them? How much money would this kind of self-service save you in terms of employee time and effort?

Your Web site can communicate with all of your stakeholders, and permit you to anticipate and adjust your actions to address an ever-changing environment. If you add eCommerce to collaborate with ongoing sales efforts, after sales service, and support, you’ll need to be sure to have the right people, systems and processes in place to deliver against the promises you make.

Katherine Pendill is a director, Consulting Services, in Hitachi Consulting’s Business Strategy Services team. Her background includes both industry and management consulting in the United States and European Union.
Martin Berman is a manager, Specialized Services, in Hitachi Consulting’s Technology Practice team in the United Kingdom. His background includes senior lecturer in Information Technology and Information Management, and consultancy and directorships in both the public and private sector.
Luis Rodiles is a director, Consulting Services, in Hitachi Consulting’s Portuguese practice. His background includes management consulting, industry, and private equity work for several European Union countries.
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