Competitive businesses often expand beyond their borders. Companies that have gone global successfully have realized tremendous benefits, including increasing brand awareness, diversifying the revenue stream and exposing the business to international methods.
However, expanding internationally can be a complex process. Here are some effective strategies to help you take your company global.
Consider Why You Want to Go Global
Before tackling the massive undertaking of going global, give some thought into your motivation to make your business international.
While going global may help a business increase their revenue and expand to international markets, it can also increase the complexity involved in your business, require you to expand your salesforce and impose additional risk to your business. The challenges of expanding globally are many but it may have a positive impact on your business.
Successfully going global can provide several benefits, among them:
- You can minimize risk by depending on only one market and diversify your revenue streams
- You can protect your business against the risk of decline or demand in domestic markets
- You can even out sales that are largely based on the seasonality of your business by selling in markets that have different sales cycles
- You can gain a fresh perspective about new cultures and tap into innovative technology
- You can extend the sales life of your existing products by selling them in new markets
Consider the particular circumstances surrounding your business and what makes it specifically good for global expansion.
You may have customers in other countries, more traffic from a certain country or a solution to a problem that another market experiences. You ultimately need to ensure that the demand for your product or service will be greater than the cost to expand to the new market.
What to Consider when Expanding a Business Internationally
It is critical that you conduct market research on your product or service well before investing in the infrastructure required to expand into international markets.
Consider the cultural implications of your product or service in the new country. Conduct market research into whether your product would likely sell in the targeted culture and if they are familiar with it.
Also, consider how people in other cultures do business. Research local traditions and holidays, as well as laws and customs regarding breaks, lunch breaks and the average business day.
Some strategies to help assimilate to the new culture include:
- Learn about the new country – Learn facts about the country and the location that you plan to market your business. This helps to show you are interested in the people. Develop a working knowledge of the language and culture.
- Visit the country – Do some international travel and see the new market in person. This will help tremendously with gaining a new perspective on the target market.
- Use an interpreter – If you are not fluent in the language, bring an interpreter with you when you visit potential clients or customers.
- Build a relationship with customers before selling – Make a connection with people before launching into a sales pitch. This will help you get to know your customer base.
- Don’t set time limits – When arranging business meetings, do not set an end time. Having more time open can help you negotiate from a stronger position.
Develop an International Business Expansion Strategy
An international business plan provides you with a roadmap on how you will accomplish the goal of going global. Evaluate your needs and set goals based on the new market.
Do not assume that you can use the same business model that you used in your domestic market.
Consider how your business would likely function in a different environment. Contemplate if laws in the new country could impact how you operate your business. Consider where competitors are located and how you will compete with them.
Develop a supply chain for your products. Research methods of distributing your products in the new country, such as opening company-owned foreign subsidiaries, working with distributors in the new country, using representatives or setting up joint ventures. For many companies, the most cost-effective solution could be to use an International PEO or a global employer of record.
Consider whether the infrastructure in the new market will provide you with the resources you will need to successfully launch your business there. Also, consider private or governmental access to financing.
Get Help to Expand Globally
Going global is a big undertaking that requires serious consideration and a clear plan. You may need help taking your business to the next level.
In addition to seeking assistance from mentors, lenders, and others who have expanded to new markets, it is important that you do your own research before launching into new markets. GlobalizationPedia provides insights into new markets and a wealth of information on expanding internationally.