By Architect Ricardo Fernandez, Business Development Manager for the Americas.
In today’s interconnected world, corporate internationalization is no longer just an option—it's a necessity for any service company aiming to grow and compete on a global scale. However, this journey is fraught with challenges. Navigating diverse regulations, economic fluctuations, and cultural nuances are just a few of the hurdles that must be overcome.
So, how can internationalization become the key to driving growth and competitiveness for service companies in the global marketplace? What are the primary challenges and critical factors involved?
For architecture firms, the path to internationalization comes with unique obstacles.
The interplay between global trends and local realities—or the "glocal" approach—is essential. Thinking globally and acting locally forms the core of the corporate strategy for many successful companies.
Even as design, technology, and materials trends lean toward globalization, local realities cannot be ignored. Market conditions, resource availability, and cost differences play a significant role in determining the feasibility of implementing certain technologies and materials. Moreover, project budgets and investment requirements vary widely across economies and regulatory environments, adding another layer of complexity to the internationalization process.
Leveraging international experience doesn’t always mean applying what works in one location directly to another. This requires continuous learning. Architectural trends guide development, but not every country progresses at the same pace technologically. Government policies, cultural nuances, and local economies often lag behind global trends.
Consider the implementation of parking fees in shopping centers as an example of how local realities can challenge global trends. In Latin America, this solution emerged in response to critical infrastructure issues in densely populated capitals with poor transportation options. As vehicle ownership grew and shopping centers evolved into experiential destinations, the problem worsened, leading to a decline in user satisfaction. The simplest solution was to install barrier systems and charge for extended parking, offering free hours and allowing customers to offset extra parking costs with in-store purchases. While several countries adopted this solution quickly, in Latin America, concerns about its potential impact on foot traffic delayed its adoption, taking nearly a decade to implement.
Resistance to change is a significant barrier. There is often a belief that certain practices can only be implemented in more developed countries, despite the real opportunities that may exist elsewhere. The key takeaway is that globalization eventually reaches all corners. If a company doesn’t adapt, another will. It’s crucial to stay attuned to global trends and remain open to change.
The success of a company’s internationalization efforts relies heavily on the team supporting its executives abroad. Organizational culture and human resources are critical in this process. Leadership must be open-minded, flexible, quick to learn, and capable of turning mistakes into valuable market insights. There’s no single formula for internationalization, no definitive manual: the first step is to be open to the world and unafraid. If a company is strong and competitive, it will rise to the challenge and find the right way to enter new markets.
Once a CEO, company, or organization steps beyond its borders, it quickly realizes that the world isn’t as vast as it seems. This is true even in small countries like Uruguay, where everyone knows each other. Engaging with other markets reveals that this dynamic exists in many parts of the world, even in larger countries. With the aid of technology and the democratization of travel, we truly are the global village McLuhan envisioned. There are more things that unite us than divide us, and within those differences lie opportunities for those eager to grow and thrive as an organization.
In conclusion, internationalization is not just an opportunity; it's a necessity in today’s service industry. It allows companies to expand their horizons, learn from diverse cultures, and adapt to various economic and regulatory environments. It opens new markets and drives economic growth. While the journey can be challenging, the rewards of adopting a global perspective and executing locally far outweigh the difficulties.
Internationalization demands constant adaptation and learning. Each market has its own unique characteristics, and a company’s ability to integrate and thrive in a new environment hinges on its understanding and respect for those differences. In this way, internationalization drives not only expansion but also innovation and continuous improvement, enabling companies to evolve and stay competitive in an ever-changing global landscape.
Recommended reading:
"Blue Ocean Strategy". W. Chan Kim y Renée Mauborgne
"The Innovator's Dilemma". Clayton Christensen.
"The Lean Startup". Eric Ries.
"Kiss, Bow, or Shake Hands: The Bestselling Guide to Doing Business in More Than 60 Countries". Terri Morrison y Wayne A. Conaway.
"When Cultures Collide: Leading Across Cultures". Richard D. Lewis.
