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Chapter 4. ARE YOU READY TO GO GLOBAL? > CALCULATE RETURN ON INVESTMENT (ROI)

CALCULATE RETURN ON INVESTMENT (ROI)

The markets that offer the greatest financial rewards are the most difficult to resist. Japan, with its high Internet penetration and affinity for online purchasing, exerts a strong pull on American companies, despite the technical and cultural challenges of reaching this market (discussed in “Hands-On: Chinese and Japanese”).

The best way to justify going into a new market is to weigh your investment against the potential return, typically expressed in revenue. ROI is often a tough number to come by, particularly with new markets in which you have little data to work with. Even if it’s just a best guess, you should have a revenue goal in mind, as it will help determine how much to invest in the localization process. You don’t want to spend a million dollars localizing a site for a country that, at best, is going to spend only $20,000 a year from your company.

Questions you should ask to determine ROI:

  • Does this market need our products and services?

  • If so, can they afford our products and services?

  • How will consumers pay us? (Some countries are more averse than others to using credit cards.)

  • How quickly is the market growing, and what’s the total revenue potential?

  • Can we deliver the products quickly and affordably?

  • Can we effectively support our products and services?

  • How expensive will it be to localize the web site?

  • How expensive will it be to maintain the web site?

  • Will we have to do anything special to our back-end computer systems, such as databases?

  • Are there liability and regulatory issues to navigate?

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