Going Global: How to Expand Your Business Internationally
In today’s global economy, the prospect of expanding to international markets is an enticing one for many businesses. When a company hits its stride and achieves record growth domestically, going global becomes an obvious option for breaking through to the next level of development. In fact, rResearch suggests that 96% of the world’s consumers live outside the U.S., and up to 87% of U.S. companies believe global expansion is necessary for long-term success.
Discerning how to expand a business internationally requires an understanding of business operations in a multicultural context, since international markets vary in their consumer preferences and regulatory frameworks. With the right mindset and strategies for success, understanding how to do business overseas is within your grasp. As you develop your identity as a leader and business owner, you’ll master how to enter an international market.
How to expand a business internationally: Benefits of going global
Mastering how to expand a business internationally results in your product’s introduction into new markets, thus increasing sales. Both Nike and IBM reportedly gained access to an additional 170 million consumers by launching operations in the Netherlands, and UPS recently followed suit by expanding into European markets. Expansion into new or growing markets allows a company to diversify its portfolio and assets, fortifying itself against instability. Companies can also use international markets for introducing novel products attractive to niche clientele. Businesses that operate internationally are able to sharpen their competitive advantage through access to international talent, brand awareness in a relative monopoly, attractiveness to foreign investors and decreased reliance on domestic markets, among other benefits.
The emergence of the global middle class is another strong reason to investigate doing business internationally. In asking how to expand a business internationally, it is important to understand that half the world is now middle class or wealthier. From an international perspective, being “middle class” equates to being able to purchase luxury products most Americans take for granted (think transportation, electricity and running water). So, with the middle class driving demand in the global economy, emerging middle-class global markets are increasingly attractive to Western businesses. If your product or service appeals to the rising middle class, you’re wise to inquire as how to do business overseas.
Keys for understanding how to do business overseas
Ask yourself: Does it make sense to investigate how to do business overseas, or would it be wise to consider focusing on consolidating your presence locally? Consult with your team as you determine your growth strategy. Have you put in the work to dominate local markets through masterful customer retention, branding and marketing strategies? Are you fiscally solvent enough to absorb the risks inherent to (international) growth? If any piece of your internal or external operations is shaky or missing, you’re not ready to expand globally. However, if your business has achieved stability in the local market and there is demand for your product abroad, your team is ready to learn how to enter an international market. Now is the time to create a business plan and strategy for entrance into global commerce.
Make a global business plan.
Refining your business plan is your first step in answering the question of how to expand a business internationally. This document evaluates your needs, goals, readiness and commitment to operating abroad. Conduct research on your foreign market, evaluating your advertising methods. You’ll also need to set forth your distribution methods, pricing and financing, accounting for the legal, social and economic particulars of the country or countries you want to enter. Making an international business plan will force you to consider all the issues you may encounter in learning how to do business overseas.
Strategies for international commerce.
Consider the issues of finance and distribution as you investigate the country or countries you want to enter. Financing is one of the more challenging aspects of setting up an international business. If your product has at least 50% domestically-produced content, you may be eligible for a guaranteed loan from the Export-Import Bank of the United States, an independent government agency that provides guaranteed capital loans and credit insurance for U.S. exporters. Distribution can also be challenging to obtain in foreign markets, where local firms enjoy closer relationships along the supply chain. To find a foreign distributor, contact trade groups, chambers of commerce or even foreign companies with a U.S. representative.
The importance of etiquette.
When you’re working on how to expand a business internationally, it’s imperative to acknowledge the etiquette necessary for sustainable international relations. Research the culture you’re entering so that you understand it inside and out – this is the only way to truly understand your customer in a multicultural context. As you refine your product for global marketing, remember that you’ll have to adapt your methods to truly add value for a new international clientele. Putting your customer at the center of all decisions is the pivotal component of understanding how to do business overseas.
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