In today’s era, once companies attain local market success, they look toward international expansion to capitalize on the massive purchasing power of global markets. It allows them to expand their customer base, partner with industry giants, and improve product lines, all the while accelerating growth.
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When it comes to growth, companies are often tempted to consider global high-performers such as Shell, IBM, BMW, and GE as role models. The problem is that these global leaders are much easier to idolize than mimic. Nonetheless, businesses of all types can reap the benefits of the international marketplace by leveraging eCommerce tactics, franchising, strategic alliances, and whatnot. Undeniably, all this has started a worldwide movement called ‘going global’ where companies take steps towards globalizing through financial, economic, communication and trade integration.
Indeed, jumping into the international marketplace offers numerous opportunities but, at the same time, it requires extensive research, preparation, and training. Hence, keep these five steps in mind for successful global expansion while drafting your strategy.
1. Build a Competent Team for Global Expansion
Behind any successful business lies a proficient team, and this formula applies to start-ups as it does to international behemoths. Every year, several companies and businesses expand their horizon across borders. Still, the unfortunate truth is that many of them fail. So why do some businesses thrive and excel while most of them end up closing their business within a few years?
Well, the answer lies within their workforce. Yes, many factors affect the business’ ability to innovate and prosper internationally. But the most important is having a competent, trained, and qualified team. Therefore, organizations should develop a team of skilled professionals to steer their international expansion strategy. For this purpose, they can sponsor degree programs like MBA in global management to top-performing employees and train them to manage global operations or hire those with similar credentials.
But what is an MBA in Global Management, and how can businesses take advantage of it?
For starters, it provides the business with a dynamic team that works cohesively to execute the international plan. In addition, having a qualified team with a complementary skillset lowers the chances of failure. Not only this, employees with training in global management become great leaders, stay ahead of the curve, and take the business to the next level of success.
2. Set Goals and Objectives
It’s essential to have a solid foundation before jumping into the waters of international trade. Ensure your business has plenty of resources, a competent team, and a local customer base. Besides, juggling both your existing local business and overseas venture without setting a realistic goal will only spell losses.
Before you do anything, take some time out and lay down your objectives for diving into the international marketplace. Of course, every business aims to increase customers, but it should be more specific for global expansion. It may include:
- Creation and launching of new product lines
- Increasing customer conversion rates
- Becoming a market leader in international countries
- Achieving higher customer satisfaction
- Gaining more market share
- Exploring a new market and customer segments
- Getting more return on investment
Also, consider all measures and align your corporate objectives with the international industry standards.
3. Take A Deep Dive into International Markets
Although some companies reactively dive into the global markets after receiving a satisfactory overseas response. But this isn’t a good strategy. Instead, an effective plan is to conduct proper market research. So, it’s crucial to carry out an extensive analysis of the global market, demand for the product, buyer personas, and financial requirements.
Furthermore, conduct an international market audit that should be detail-oriented and comprehensive. It should answer all the queries while helping you scale your business operations in the global marketplace. Review every detail of the international market, including legal requirements. Although various tools are available to help with this purpose, don’t entirely rely on them. Do your homework before opting for these tools.
By answering these diagnostics questions, you will objectively identify your business’ status of preparedness for the international market.
4. Understand The Market and Competition
Before embracing globalization, a business must analyze the markets, customers, competition, and products. The most challenging part of your global expansion strategy is convincing foreign customers to choose your brand over the competitors – and this isn’t easy. Therefore, make sure your product or service stands out from the crowd.
Moreover, it’s crucial to understand the global market dynamics. Given these dynamics, some companies opt for a local company to gain knowledge of the local culture, customer needs, and legal requirements. Conduct gap analysis, SWOT analysis, and product value alignment. Yes, it’s essential to gather information about the new market, buyer personas, competition, and potential customers.
5. Plan Your Marketing Strategy
Companies nowadays have many choices and can even offer a new concept in the international market. Unquestionably, it’s essential to devise your marketing strategy before setting foot in new regions. For example, decide whether you want to continue with the same brand message or create an entirely different one. Moreover, some companies can continue with brand consistency and maintain their core image even in other countries.
Remember, a marketing strategy must include a distribution strategy as well. It provides the mode of entry into the global markets.
Business strategists and managers need an effective distribution plan. There are various options to reach the end customers:
- Sell directly to the end-user
- Hire in-country intermediaries
- Acquire an existing business
- Partner with local brands
- Sell through online eCommerce stores
- Open a physical shop in the international market, and whatnot
Indeed, global expansion is a challenging and exhilarating prospect for many businesses – and sometimes a stressful reality for others. Nevertheless, going global is a strategic tactic that channelizes and opens the next chapter for many organizations. It allows businesses to seize the opportunity and expand their global footprint. As a result, most companies transition from a successful local business into a thriving international organization.
It offers new marketplaces, high returns on investments, fresh revenue streams and revitalizes product development. But, in the end, global expansion is a marathon and not a sprint requiring constant adaption of policies and strategies to changing global conditions.