Global expansion can be quite profitable for your growing business. However, that does not mean you can enter any foreign market and simply carry out business the same way as you do domestically.
Here are 8 things you must consider before expanding your business globally.
1. Standardization of Products
The first thing you need to consider is the quality of your products and services. If you are planning to expand internationally, you will need to provide the high quality of goods and services to your foreign clientele.
Furthermore, every market has its own standards of quality and assurance that need to be met in order to create a strong position for yourself and your company. Along with the best quality of products, you also need to be able to maintain a certain amount of consistency in your standards of quality. The manufacturing process should be able to produce the same high-quality goods every single time as inconsistencies will make your reputation unreliable in a new market.
In order to ensure quality, rigorous testing of your product quality should be conducted to ensure that you can always perform up to your mark and live up to your name and customers’ expectations.
Adaptability and flexibility are a vital part of business operations. Every entrepreneur needs to be open to change and adaptation when it comes to business plans, products, and marketing strategies.
When you enter a new foreign market, you might face a lot of challenges that may demand drastic changes in order to allow your business to grow. Rigidness of a business owner can lead the company towards a sharp decline. Hence, be open to new ideas and suggestions as every market will have its own forms of producing and marketing goods.
You will need to adapt to the local culture and business trends and find a balance between the aims you want to achieve and the means of accomplishing them.
3. Language and Cultural Differences
Within local markets, expansion can be quite easily accomplished as there are no language and/or cultural barriers to overcome. However, for international markets, overcoming this obstacle can become very challenging if a properly organized plan is not followed.
To make your mark in a foreign market, you and your employees need to either learn the new language or find a representative who can guide you and promote your business accordingly. Having adequate information about the local market of the country where you wish to expand your business is also necessary as cultural differences can often hinder business growth.
For instance, there are many cultures where outright and bold marketing strategies can fail but subtle hints can work wonders for retail businesses. Hence, if you are selling a product that is forbidden in certain religions or culture, or if you are promoting your products in a certain way that is not considered appropriate by the locals, they will not be motivated to buy your goods and services.
You can only find out about these details from studying your targeted international markets and by conversing with local representatives who have a better grasp of the business trends prevalent in the area.
4. Market Considerations
In addition to monitoring your product quality, you also need to consider whether the product you are trying to sell has a demand in your targeted foreign market. There are two things that you need to discover:
Firstly, the suitability of the product in the market and its demand. Promoting your product in a market where there is no demand for it, will not be very profitable for your enterprise. Hence, you need to be careful when choosing your location for global expansion.
Secondly, availability of similar products locally at cheaper rates. If a country produces a good quality product in its local factories and is providing it to the people at cheaper rates, they will be less likely to opt for imported items. This means that you should analyze the products available in your target market. Is there a local product that is similar to the one you are offering? At what price is it being sold and what does your product have that will make people opt for it over the local variety? Plan your marketing strategy and set your cost of goods accordingly.
5. Dedication and Commitment
Global expansions can be tough to accomplish if you are not completely dedicated to the task at hand. You will need to take one step at a time and be clear about the aims you wish to achieve by exporting your products internationally.
You will also need to find local employees who are as dedicated to this cause as you are or perhaps you would prefer transferring your existing employees to a foreign office base. Whatever your choice may be, if you are not committed to your goal, you will have a hard time in achieving it.
6. Organizational Structure
Businesses cannot progress without proper organization and business plans. Your global expansion needs to have a clear and comprehensive strategy to implement. This includes finding buyers for your products, setting up a foreign branch office, hiring of local employees and representatives, checking the availability of raw materials if you are planning on producing locally, etc.
As a business owner, these decisions of strategizing the expansion fall onto your shoulders but if you require assistance, you can seek the counsel and help of your existing employees as well as local representatives within the new market.
7. Rules and Regulations
Every government has its own set of rules and regulations that companies need to follow when they are importing their goods into a foreign country. There are tax laws and legal considerations that must be taken care of before the expansion and production process can go underway.
Find good legal counsel in your country as well as your targeted international markets to help you with these formalities to provide your business with a smooth road to success.
8. Investments and Capital
Global expansion does not happen overnight, and it most certainly is not a cheap process. Time and money are needed to take your business to the next level across geographical borders. Thus, for an international expansion, you need to have enough capital to be able to successfully invest it in another country’s business market.
If you do not have an adequate amount of capital, find investors or shareholders who can provide you with the funds you need to go through with this expansion plan.
Ultimately, these considerations along with the right amount of time, money, dedication and local market awareness; can give new heights to your company as it grows on an international level with the help of your global expansion plans.
Going global doesn’t have to be a scary proposition. By considering and developing these twenty essential factors before going global, your organization can realize the full potential of globalization and capture dramatic revenue growth.