Expanding business internationally has become a necessity for companies wanting to grow and become highly successful. Tapping foreign markets, however, is not just limited to these large brands, as even smaller companies are testing the waters.
In 2020 Forbes pulled together a list of 25 privately owned companies that had grown globally, showing that international success is an achievable dream for all. Titled ‘Small Giants’, it included several small German start-ups venturing into the international markets in 2020.
Elsewhere, Germany had already earned the title of the 'most innovative economy' in the Bloomberg Innovation Index in 2020 with a cluster of small and medium-sized companies that were flourishing and supporting the country’s economy.
This shows that with excellent planning. and having a strategy in place, it is possible to expand your business internationally. Here are some useful tips for organizations that are contemplating this move and looking towards international shores.
Things to consider
The idea of expanding business internationally can be a lucrative one but that does not eliminate the risks it involves. If you are considering taking your business to foreign markets then here are a few things that you must keep in mind.
Understand the targeted market
Before you look to expand your business to new markets, first understand whether the target market is right for you. This means conducting a market study to check there are customers who would be interested in buying your product or service. For example, if you are selling farming tools, you have to ensure that the targeted market has farmers. Similarly, beach supplies would be better targeted on the coast. By initiating a market study, however, you can design products and services accordingly or easily divert those that are already ready to other markets.
Study the infrastructure
The next important thing on your agenda for international expansion has to be understand the infrastructure of the country. You will need to have all the support you can to start your business from scratch in a new place and make it flourish. This will includes finding reliable raw product sources, a good supply chain, manpower and much more.
Demographically, each nation works in a different way, meaning that it is important that you have a good understanding of the infrastructure and the kind of support you will find.
Build cultural awareness
Having cultural awareness is essential for all businesses in the modern world, particularly if you are planning to expand your business internationally. The local culture can influence many areas including the acceptance of your product, its marketing strategy, your negotiations and the management of the team.
If your business ethics and operations are culturally appropriate then you have a higher chance of gaining a stronger foothold in the market. For example, in the west, while managers provide structure, they also encourage team members to make independent decisions as well, while in eastern countries like Japan, not gaining management approval for all decisions is very rare.
Understating the culture of the market you plan to enter will give you an edge, helping you avoid any faux pas, while having a positive impact on your business dealings.
Have a global marketing strategy
If you are planning on expanding your business internationally then you have to work on a global marketing strategy. This means that instead of focusing on local markets, you need access to new, global markets.
The key focus of a global marketing strategy is understanding the customers, and importantly, their buying choices. If you know what product they need, and in what form they want it, then you can deliver it successfully.
Although all this requires a significant amount of work, it is important as your main goal is to identifying the best market for your product. You may make the best ice cream, but if you try to market it to a group that is lactose intolerant then you are bound to fail. Therefore, localization and understanding the target audience are definitely the key!
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