Business owners often find themselves in confusion about whether to expand the business globally or not. The company’s expansion can unlock numerous benefits for your overall enterprise, including high market share, bulk discounts, greater brand awareness, goodwill, and a loyal customer base. These can lead to cost savings in numerous ways and improvements in overall operations.
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If you are planning to expand your business and take it to international markets, here is a list of four ways to take your business to global markets:
Exporting is hence the most common way of entering an international market. It is a relatively simple way of entering into a new foreign market and avoids the high initial expenses of sending up a subsidiary business of yours in that country. Companies usually go down this route of selling their goods internationally by contractual agreements with marketing agencies, intermediaries in the distribution channels, retailers, or all of these combined.
A product being sold in an international market will have to be marketed according to that market to create a positive impact and sell among customers. Exporting products comes with certain limitations like high transport costs, risk of environmental factors, and high barriers to entry in specific markets.
Political relations between the base country and the international market may result in sudden loss to your business, for example, if the government of the foreign market decides to impose tariffs, customs, embargo, or any other form of taxation on goods from your country.
2. Enter a Joint Venture
When you are planning to or entering a foreign market, it is essential to have a thorough understanding of consumer behavior of that market, culture, restrictions, and overall trends.
Another strategy that can work great for your business is entering a joint acquisition or joint venture with an already established company in your industry running in your targeted international market. You can benefit from combined business strength and get easier access to suppliers and other departments involved in setting up your operations. This way, you will be able to expand your business to the fullest possible extent and provide customer service tailored to the preferences of the new market.
Changing your business from a sole proprietorship or a partnership to a corporation where shareholders purchase equity in your business is another excellent way of expanding internationally. Incorporating can protect your assets through limited liability. You can raise a lot of capital by selling shares, setting you up on the road to expanding to international markets.
4. Starting a Franchise
One of the best ways to expand internationally is by starting to franchise your business to individuals who are willing and able to afford it. Franchise businesses benefit both you (the franchisor) and the buyer (the franchisee) by providing the franchisee a controlled environment where they can use your brand name, brand identity, logo, and your product in return for the franchising fee and royalties to you.
As a result, your business can expand without the worry of requiring additional capital or setting up everything on your own.
The method through which you take your business operations to international markets is solely up to the objectives and vision of your business. The choice between exporting your goods or entering a new market through a joint project or franchise vs corporate can be made by looking closely into your targeted market and assessing the position of your industry in it.
You should also consider choices, including the availability of capital for expansion, political relations, and the existing brand image of your company, to make a practical choice.