Data is everywhere you look; from the UPC code on your Starbucks coffee cup, down to the GPS in your phone. It has been dubbed by the Harvard Business Review as “The Sexiest Job of the 21st Century.” Experts now point to a 4300% increase in annual data generation by 2020. All of that data is creating quite the hassle for businesses though. This industry, and its implications on international business are so new that many companies do not know how to attack the problem. They know being able to analyze and come to conclusions from their massive amounts of data is important but many companies have not developed a strategy yet.
The framework for utilizing big data is in place and once companies figure out how to leverage it correctly, it is going to have rippling impacts on international business. How is it going to change international business? Currently, when companies decide to conduct business abroad, many studies, focus groups, and trips are taken to the business destination. These studies cost millions of dollars. With big data, a company already has data on its customers abroad based on what they bought previously and they're shopping habits; through online purchases or through purchases at other locations across the globe. With the data already collected, the cost of collecting the data is gone. All that is left is to analyze the data and draw conclusions from it. A large task indeed, but this data could make entering a new market and conducting international business easier than ever before.
A company in India is doing just that; analyzing the products you look at, which displays you check out, and each aisle you walk through with the use of video cameras. This data can be used to make better decisions about how to tailor the product to that specific market based on previous sales to areas around the new market or customers from that area who bought the product previously, but from a store in a different region. Big data will reduce the risk of entering a foreign market because companies will be able to make better informed decisions with the data and analysis they have conducted. With less of a risk to enter new markets, we could see international business expand faster than it is currently.
Many more implications of big data’s effects on international business will be discussed throughout this blog series. This is such a new industry that many outcomes are still to be seen, but looking into the future, we can see that this will have lasting impacts on how international business is conducted.