There are three options open to any business. They can create a worldwide offer with no localisation, go for a regional launch, or introduce separate local offers. There is no right or wrong answer here: the decision will rest on a balance of factors: can you globalise your offer and achieve economies of scale, but at the same time localise enough of it to satisfy customers? Consider QXL.com, a leading European auction site, founded in 1997. QXL now operates in seven countries and its sites have more than 20m page views in a month, giving it a very broad European reach. QXL ran a parallel process, rapidly launching a focused core offer across Europe, while deepening the depth and breadth of its offer in each of the seven countries. A phased launch with a core offer also makes the scaling process easier:
Phased (but fast) launch across countries or regions: Attractive markets are those where you can rapidly scale your business. Perhaps the most famous attempt to take on the whole world at once is Boo.com, which was launched simultaneously across the US and Europe. Not everyone is that brave or stupid but even local launch business plans should demonstrate European potential – think big, even if you start small. Thinking big requires a European rollout plan, European finances and a competitive review across the whole of Europe, not just the local market. This analysis will lead you to a deep understanding of a relevant core offer that can both satisfy customers and be replicated across regions or countries easily. If you decide to phase the launch by region you can group countries together by language and cultural similarities.
Core offer development: the most attractive markets are those that will enable you to rapidly roll out your core offer. Most Internet offers start with an initial core offer that rapidly becomes deeper and broader. This core offer will be delivered to market in the fastest time possible to 'claim the space' and build business momentum. The first question any prospective partner will ask is 'do you have a Web site set up?' Having your site up and running will give partners the confidence that you can achieve your business goals. It will also give potential competitors an indication of the speed you are moving at and potentially warn them off. Also, if your business exit strategy is dependent on a trade purchase, then they are more likely to find you if you have a Web site up and running. Any core offer must satisfy these criteria.
Customer satisfaction: Always launch with an offer that will satisfy your customers. The key to success here is to understand your target customer and what their reasons for visiting your site are. At Goodhome. com, a US site selling furniture, decoration products and housewares, people visited the site for its 'home solutions'. The initial core offer was a restricted range of five different room styles shown in pictures similar to those in magazines. This meant that most site visitors would find at least one style they liked. The visiting customer could easily grasp the site's unique concept, that enabled them to buy everything they saw in the photograph. Goodhome also signposted future on-site developments by demonstrating the 3D functionality that the site would shortly offer. This market-based approach contrasts to the familiar 'under construction' pasted over most new sites.
Authority in what you do: Businesses increase customer satisfaction if their core offer has retail 'authority'. Authority is what you stand for and is probably the reason why people will visit you versus the competition. Amazon has authority in books, Dell in computers, and lastminute. com in weekend breaks. If you ever have a choice of developing depth or breadth in your offer, go for depth first. Depth builds authority and customer satisfaction. It is unwise to launch a shallow core offer in the rush to expand geographically. A shallow offer will disappoint your customers who will be lost to the competition. Many Internet businesses will lay claim to their space with a big PR campaign, but only open the site when they are ready to create a positive customer experience. Oneswoop, the European car trading business, launched a new PR campaign with each round of funding. By building a network of major established businesses and raising an enormous amount of money, Oneswoop gave people a reason to believe the business would be successful. Those who were inspired by the PR campaign to visit the site found a 'holding' site, which explained the concept, detailed the partnerships in place and enabled customers to register. Those who registered were updated with steady progress enabling the business to build a relationship with them. Only when a positive customer experience was assured was the site opened for business.
Replicability: The core offer should embrace a simple enough business model to enable fast replication in different countries. When letsbuyit.com first rolled out across Europe it began with a restricted number of suppliers of standard European products that could be delivered direct to customers. This enabled the firm to claim the space in a number of countries at the same time as it was developing deeper and broader localised offers. By contrast, a business plan which promises to cut out the inventory costs of retailers by, for example, doing deals with 150 suppliers may not be replicable. It is a very high-risk strategy to try to replicate complex core offers across geography in the exponential growth stages of an immature Internet business. The result is likely to be poor customer service and ultimate failure.
There are always some elements of a plan that may not be totally replicable. These may include local access to the Internet, local news offerings where they relate to cultural tastes and local fulfilment centres. Local management will usually be required to help navigate through alliances and legal issues.
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