Companies want to expand internationally in this age of globalization. There are many benefits and perks to taking your brand abroad. Many companies fail on their international expansion journeys for many reasons, but the most important reason is that they are not as prepared.
Before you make the decision to go global, you should first ask yourself ” Are your ready for international expansion?” You don’t have to believe that your product/service can be expanded globally.
It is not easy to expand your business to another country. We would like to share some helpful tips with you for international business planning. These are steps that you can take to get your business to the global market.
What is international business?
Many times, the word “international business”, is used a lot nowadays. It is easy to understand, but it is not the same thing as its meaning. International business is not easy to define in one word or in its simplest form.
Globalization is another name for international business. Globalization refers to international trade.
International business occurs in various formats .
- It is the exchange of goods between countries. It could be exporting, importing, or trade.
- Foreign businesses can use the franchising, licensing type to make contractual agreements.
- Manufacturing, research and formation, as well as development and distribution of products on foreign markets.
We must be able to deal with the potential risks of doing business abroad.
While international business can be a great benefit for your company, there are also challenges we need to anticipate.
Why is it important to expand your business internationally?
Expansion internationally can bring many benefits to your company.
Increase brand awareness and revenue
Your business can use the international expansion to expand into new markets and attract new customers. This will increase your sales and revenue, as well as your brand awareness on a global scale. Your company will increase sales by exploring new markets.
You can reach new markets where certain products or services aren’t available and customers there cannot buy them. This allows you to access new consumers who are eager to purchase your product.
Reduce your dependence upon the current market
International expansion is a great way to reduce your dependence on the market you’re already in. Your market might be highly competitive and you may not have the ability to compete with other players. This market is not conducive to revenue growth.
Moving your business internationally will prove to be a great option. Instead of focusing too much on one plan, as if you had to put all your eggs in one basket. You can instead separate the resources that will make money and not be dependent on any one market.
Opportunities to collaborate with talented people and make use of external resources
International business expansion has another important advantage: you can access the expertise and technology of other countries in order to expand your business. This allows you to learn new technologies and improve your work processes. This will help your business grow as well as your sales.
You will also get the chance to collaborate with people who are experts in your field. You can benefit from their experience and skills to help you understand the workings of a country you just opened.
Be the first to move
Many companies are keen to expand internationally because they want to be ahead of their competition. They will enjoy all the benefits of being the first-mover.
Your brand will be known by consumers before the rest. It may be difficult for customers to shift their thinking and habits if they already have a few brands in mind. They will choose yours over your competitors’.
What are your challenges in expanding your business?
While international expansion can have many benefits, there are still some disadvantages that you need to consider if you wish to make your business grow internationally. You might encounter some unfavorable factors when expanding your business internationally.
Language and culture barriers
You must consider the cultural differences and languages when doing business in foreign countries. It is important to research the country in which you plan to invest in order to understand cultural differences and to know what you can do to adapt your product or service to fit their culture.
Common mistake: People only realize that their product is not suitable for their country. This leads to lost revenue.
This is why conducting market research before expanding your business is important if you want these disadvantages to be avoided.
International compliance and regulatory issues
Many free trade agreements today allow businesses to export their products from one country to another. It might be more difficult to expand in other countries.
There may be additional taxes or fees you will need to pay to allow your product to be sold in that country.
To avoid any mistakes in your business dealings with countries that are not part of the free trade agreements you should pay close attention to their laws and compliance.
Another issue you may encounter is currency exchange. While constant fluctuations in exchange rates can increase sales, they could also lead to decreased sales.
Your ability to trade can be affected by your currency. If you don’t want currency exchange to be an issue or disadvantage, it is important to pay attention to fluctuations frequently.
When a product similar to yours is available in their country, it can be difficult to convince them to trust your brand.
Customers are more likely to trust big brands than small companies. It is more difficult for smaller and medium-sized businesses to convince international customers that their brands can be trusted and are better than local competitors.
How to grow your business internationally
Before you start your international business, do your research
Research is the most important thing you can do to grow your business in a new area.
A marketing segment analysis can help you determine if your product or service is suitable for the market. Your product or service may be doing well in its current market but that does not necessarily mean it will do well internationally.
To be able to address different markets in different countries, a strategy plan is essential. To learn more about the market you want to expand into, there are some key plans you should discuss with your team.
The PEST Analysis Tool allows you to determine the macro factors which may impact your business.
PEST stands for Politics and Economics, Society and Technology. Before opening their shops, business owners have been using PEST analysis more often.
SWOT analysis has been a well-known tool that can be used to develop your company and create a plan. The four key elements of SWOT are Strengths and Weaknesses, Opportunities and Threats.
These elements will be divided into two groups: external and internal factors . The internal group will include both strengths and weaknesses.
Your strengths are your competitive advantages, and they make you stand out from the rest.
Otherwise, weaknesses are a sign of the problems your company faces. It is crucial to recognize these weaknesses as they can be detrimental to your business and prevent you from losing sales.
Threats and Opportunities are both external factors. These factors are not controllable as they can be influenced by changes in the market, economy, and political environment. You need to identify the positive and negative effects of these changes on your business. You can then prepare various plans to deal with the changes.
This analysis will allow you to determine the strengths and weaknesses, as well as the opportunities and threats in the market.
You can adapt to different cultures by studying the behavior of your customers
You should understand your customers’ attitudes in different countries after analyzing the demand for your product or service on the global market. You must adapt to other cultures.
Your business won’t succeed if your products or services are not of high quality. You must ensure that your business is unique to your local market in order to grow your international business.
McDonald’s is a great example of adaptation. McDonald’s has a strategy that is close to localization. This allows McDonald’s to adapt to the cultural needs of each country by offering a different menu. McDonald’s demonstrates respect for cultures by offering a variety of menu items.
In Indonesia, where the majority of the population are Muslims, McDonald’s substitutes pork for fish. Because Indonesians prefer rice to bread, McDonald’s serves rice with spicy dishes that are popular among locals.
McDonald’s India opened its first vegetarian outlet to cater to Indian customers.
Optimize Your SEO
Store owners must look beyond traditional brick and mortar stores to take advantage of the new technology and global opportunities. E-commerce stores can help you reach customers and expand your business internationally. SEO should be a priority to concentrate on.
Is it possible to ask yourself what SEO means? SEO acronyms Search Engine Optimization. SEO’s purpose is to bring as many people to your website as possible. You can increase traffic to your website by achieving a high ranking in search results pages of search engines like Google.
Customers are now more inclined to search on Google and other search engines in order to find the products they want. Your brand will be remembered if your website has a high ranking and is given as much attention as possible.
Customer support is the main focus
International customers will be more likely to come to your business once you have established it overseas. When you expand internationally, customer support will be crucial.
Not only will you serve your local clients, but also your international ones. They come from all parts of the world and each have a different time zone. You will gain their trust and satisfaction if you are able to answer their questions as quickly as possible.
To retain customers and grow your business, it is essential to provide excellent customer service. There are many types of customer service like telecommunications, email, live chat and social media.
Chatbots will give customers the feeling that they can be reached immediately by chatbots. It can also cause frustration for customers who want to talk with representatives of your company.
Chatbots may not be the best fit for every industry and business. Chatbots are not suitable for businesses that provide consultations.
Your local customers should be able to recognize your product and service
Localization is the process of adapting a product to a particular audience or geographical location. This may include translating a name, changing packaging, etc.
It is important to find out if your product needs localization. If it does, you will need to research to determine if your product requires localization.
You should also redirect customers from other countries to your website if they visit it. This makes your customers more familiar with your business.
The store switching module is a helpful tool if you’re using Magento, one of the most popular e-commerce platforms.
Check the regulations and compliance for the target market
You need to ensure your business can grow globally without any legal problems.
To ensure that you are compliant and certified in the industry you wish to work in, make sure you review the regulations. You also need to keep the regulations current to avoid financial loss and penalties.
The General Data Protection Regulation (or the acronym, the GDPR) will become active on May 25, 2018. It is designed to protect personal data privacy and allow control over personal information within the European Union. This rule must be followed by all e-shop owners selling EU products.
There are many hurdles that you need to overcome in order to grow your international business. While it can be difficult to expand your business internationally in this age of globalization, there are many benefits to having a well-planned strategy. Successful expansion is about recognizing the challenges your company will face.