With more than 95% of consumers worldwide living outside the United States, taking your brand global offers a host of benefits — from establishing a first-mover advantage to building a new customer base.

But global expansion also comes with several risks.

In fact, U.S. companies experience an average return on assets of negative 1% up to five years after going global, compared to an average ROA of plus 1% for companies that stay local, according to research by Harvard Business Review. Further, just 40% of global brands experience an ROA greater than 3%, while 53% of domestic ventures readily surpass the 3% mark.

So the first thing you need to determine is if going global is even worth it. Then, should you decide to move forward, ask yourself: What will it take to succeed? To help in that exercise, below are some major factors to consider.
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4 Critical Considerations for Building a Global Brand

1. Know Your Customer

Understanding your customer base is fundamental to establishing a successful global brand. Start by researching the behavioral patterns of local consumers. Reach out to local consulting firms for insights, or explore secondary resources like census data and research from other brands.

Rather than taking too broad an approach, focus on the people who are most likely to buy your products or services, and develop personas to market to them most effectively. Speak with your sales and customer service teams to find out who your customers and prospects are — and what they want.

Following the Buyer Persona Institute’s methodology for persona development, you can create personas framed around “the five rings of buying insights.”
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The 5 Rings of Buying Insights for Audience Personas

1. Priority initiatives: urgent pain points that lead buyers to look for a solution immediately
2. Success factors: desired customer outcomes from a purchase
3. Perceived barriers: concerns that may dissuade a prospective customer from purchasing
4. Decision criteria: questions and conditions that need to be met for a customer to purchase
5. The buyer’s journey: the process, resources and references buyers use as they reach purchasing decisions
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Armed with these insights, you can identify your company’s niche. Understanding your most likely customers will help you establish a foothold in a new market.
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2. Research the Local Market

Your next step is to explore external factors that shape the local business landscape. Learn the workings of the local market, using a PESTLE analysis.

A PESTLE analysis is a marketing tool that assesses external factors influencing business decisions. PESTLE stands for political, economic, social, technological, legal and environmental.
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Examples of Each Factor in the PESTLE Model

• Political: government policies, corporate taxation, global trade agreements and political stability
• Economic: exchange rates, economic growth, inflation rates, supply and demand, interest rates and the cost of living
• Social: demographics, social attitudes, lifestyle trends, and work-life balance
• Technological: technology infrastructure, automation, technological innovation and cyber security
• Legal: industry regulations, licenses, and permits, labor laws and intellectual property laws‍
• Environmental: natural disasters, environmental restrictions, sourcing of goods and services, carbon footprint and corporate social responsibility
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Start by identifying factors that may impact the performance of your business. Once you recognize them, you can anticipate and mitigate potential threats early on. You can also strategically adapt to fast-changing market and societal needs. Conduct analyses regularly to ensure you’re on the right path and ahead of shifting trends.

Once you have a picture of the influential factors in the industry, it’s time to research the local market and assess growth opportunities. Below are some questions you should answer as part of that exercise.
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Questions to Ask Before Entering a New Market

• What is the size of the current market?
• Does your product fit well into the local market?
• Who are your competitors, both local and global? And what are their strengths and weaknesses?
• Which brands dominate the market? Are foreign brands one of them?
• What marketing campaigns have worked so far?
• What marketing campaigns did not work in the past? How will you change to ensure future success?
• Do any particular elements of the PESTLE analysis influence the outcomes of your marketing efforts?

Through comprehensive research, you can establish a strategic global brand.
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3. Translate Your Brand Identity

A consistent identity helps build familiarity and maintain the integrity of your brand. It also contributes to financial outcomes. In fact, 68% of businesses say a consistent brand expression across channels leads to increased revenue, by up to 20%, according to research from Marq.

When going global, you need to translate your brand’s identity. This means remaining true to your brand’s central tenets — with appropriate adaptation for a certain market. Work with cultural experts, and conduct focus groups to ensure your brand identity remains recognizable but sensitive across borders and languages.

We all know the apocryphal story of the Chevy Nova, which, according to marketing legend, failed to sell in Latin America due to a translation of Nova into Spanish as “doesn’t go.” That the story, as it turns out, isn’t true doesn’t mean it can’t impart a valuable lesson. Companies need to think about all aspects of their brand to successfully launch in a foreign market.

This includes auditing non-verbal elements for cultural nuances. Brand colors, for example, may need to shift if their meanings vary across cultures. To illustrate this point, green symbolizes death in many South American cultures while representing fertility or wealth in the Middle East.

Start by identifying what defines your brand. Then, explore alternative ways to communicate your brand’s core values and attributes in a culturally appropriate way. Find the balance between maintaining the core of your brand and adapting to local cultures without compromising the integrity of your brand.
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4. Localize Your Approach

Imagine you’re visiting your friend’s home. You notice he takes off his shoes and places them along the wall. But you always wear your shoes in your house. In this situation, you can either keep your shoes on or ask your friend if he prefers you take them off.

Most people will choose the latter. Why? Because they want to be respectful.

Going global is the extension of that. When you expand your business into a new country, you should respect the local norms and practices and adjust your behavior accordingly.

“You will probably need to change every aspect of how you go to market so your brand feels like an insider versus an intruder,” says Andrew Ellenberg, president of Rise Integrated Marketing.

In other words, localization means tailoring the experience to local customers by making it relevant and accessible. Effective localization will improve customer experience and enhance engagement with your brand.
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Key Brand Elements You Should Consider Localizing
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Products 

Customize your products to meet the specific needs and preferences of local customers. Speak with your customer-facing teams, conduct focus groups and research your competitors' successes and failures. Only by understanding what customers want and how they perceive your offerings can you tailor your products to fit a new market.

Websites

Work on translating your brand’s website with native speakers. This is important, given that 76% of online shoppers in 29 countries prefer to purchase products when they receive information in their native language, according to CSA Research.

By communicating in local languages, you will not only reach non-English-speaking customers but you will also have more influence over their buying decisions. Making information accessible helps build brand stickiness.

Reviews

Consider translating reviews with the help of automated tools. CSA Research also finds that 73% of online customers want product reviews in their language, and 65% prefer content in their language. Ensure reviews are available in multiple languages.

You also should use local review websites. In some countries, U.S.-centric review sites, such as Google Customer Reviews and Yelp, are not popular among local consumers. Identify popular review sites in the country and encourage reviews from your new customers abroad by creating a page and sharing the link on a translated website.

You can establish a flexible and customer-centric global brand by researching customer demand, providing accessible information in users’ native language and publishing/translating user-generated content, such as reviews.
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Case Study: Starbucks in Australia vs. Starbucks in Japan

To better understand how the four considerations above lead to the success of your global brand, let’s dive into a case study of Starbucks in two different countries — Australia and Japan — with two very different outcomes.

For background, Starbucks opened its first coffee shop in Seattle in 1971. Today, the company has more than 35,000 stores in 80+ countries, and, as of October 2022, 51% of stores worldwide are located outside of North America.
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A Lesson in Market Misalignment: Starbucks in Australia

Starbucks debuted in Australia in 2000 and opened nearly 90 locations in its first seven years. Then, suddenly in 2008, the company closed more than 70% of its underperforming locations due to a reported $105 million loss.

So what went so wrong with Starbucks in Australia? Starbucks grew too quickly and failed to adjust its offerings to the characteristics of local consumers and the local market.

“When they launched, they launched too rapidly, and they didn’t give the Australian consumer the opportunity to really develop an appetite for the Starbucks brand,” says Thomas O'Connor, a principal research analyst specializing in consumer industries at Gartner.

This was a major misstep, considering that Australia’s coffee market is one of the biggest in the world. In fact, it is expected to total $10.3 billion in 2023-24.

In this highly competitive market, local cafes appeal to customers by providing a variety of specialty items like the flat white and Australian macchiato. Starbucks, on the other hand, offers sweeter drinks than most Australians prefer and at a higher price point than most other coffee shops. The global brand didn’t tailor its business model to fit the preferences of the Australian market.

Since the 2008 closures, however, Starbucks has slowly started to reopen stores. As of October 2023, Starbucks has 67 stores in Australia. But surprisingly, its target audience isn’t actually Aussies; it’s tourists visiting Australia.

As a result of finally finding its place in the market, Starbucks posted its first profit in Australia in 2023. Despite the failure to cater to locals, Starbucks’ distinct global brand identity helps its operation in Australia today.

Again, the lesson is to know your audience. And for Starbucks in Australia, this means international travelers rather than people who live there.
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A Lesson in Global Branding Success: Starbucks in Japan

By contrast, Starbucks in Japan has flourished. The company opened its first store in Japan in 1996 and operates over 1,700 stores as of January 2023.

Japanese consumers love Starbucks. The company ranks top in the category of favorite coffee franchises across Japan, according to a recent study.

The remarkable success is a result of the localization of products. More than 40% of respondents said the No. 1 reason they like Starbucks is that it regularly adds seasonal menu items.

For example, each spring, Starbucks offers cherry blossom drinks; in the fall, chestnut or Japanese sweet potato drinks; and during winter, Christmas-inspired drinks. In some cases, seasonal drinks even vary by location.

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The brand’s ability to cater to local tastes and cultural nuances has contributed to its success and growth as a beloved global brand.
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Prepare, Research & Adapt

Going global and succeeding at it are two different things. But with the right preparation, you can navigate the complexities of global markets, decode cultural nuances and offer products that meet consumer demand.

Commit to listening to your local consumers and the local market. Adjust your brand identity and your offerings in balance with keeping a consistent, recognizable brand. This will lead to organic and meaningful growth on the global stage.