Do you create local teams that are independent, can act fast and adapt well to the local culture etc. Or - do you do as much as possible from HQ and have as few people as possible on the ground locally?
The truth is, there isn't a simple answer to this question. Either methods can and do work.
I've had this discussion many times over the years and seen different ways of doing it first hand.
The way I see it there are a range of functions which are more suited to being centralised and a range which lend themselves to being more localised.
Finance for example, needs a centralised team. There may be local bookkeepers in each country but usually in finance you'd have as much as possible in one location. Reason; governance and control.
Same with tech. Having a multitude of tech solutions for similar problems means you end up with a spaghetti like mess of code to unpick down the line. Unless there's a business case to say otherwise, tech, design and product tend to stay centralised.
Sales, marketing and customer service are the areas which sometimes can be done centrally, sometimes they need a local presence. There's no "right" answer here because it depends entirely on context.
What I can suggest are 4 questions to ask which might help you decide...
1. Do you need an entrepreneurial mindset to launch in the territory?
If success requires a local entrepreneurial leader to build relationships locally, they will need to be empowered to move fast and independently. They'll need more sales, marketing and customer service resources that they can call on at will. Shackle their ability to move quickly and they will fail.
Later, once a local business is up and running you may choose to start standardising things across territories by sharing best practice but to start with it could make sense to just go hard and fast with an entrepreneurial approach and less standardisation.
2. Do local conditions change the proposition, revenue model or distribution channels used?
If you can use exactly the same methodology in several markets to succeed, much if what is done can be centralised and shared across territories. If it's a very local play with local relationships and local adaptations needed, the set up will be less centralised.
3. Does the business run on policy or principles?
Policy driven companies can be dogmatic and have very specific controlled ways of doing things. Success requires rolling out a template systematically to create a predictable experience for suppliers and customers. (e.g. a hotel booking website)
Other companies can achieve the same results by basing their decisions around a set of guiding principles and giving more autonomy to a local team. (e.g. a recruitment agency).
The difference between these two approaches can be thought of as a "Catholic" versus "Buddist" approach. Great examples can be found in the recently published "Scaling Up Excellence - Getting to More Without Settling For Less" by Robert Sutton and Stanford colleague Huggy Rao.
4. What are the risks of giving up central control?
If a business has developed strategies to reduce risk (e.g. Health and safety risks reduced through certain processes or controls), to allow a local method to manage these risks may not make sense
Finally...
These 4 questions might be a good place to start.
Ultimately, it requires a real life test to decide. If market development approach proves successful and can be replicated time and time again, that's worth something.
As always, test, iterate, amplify or discard.
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