For companies, an international presence is a key goal. Such an achievement is sought after by all businesses that wish to have a broad impact on their product or service. Having an international presence is much more than simply having office locations scattered across multiple countries. The process is meticulous and requires a number of aspects to be addressed properly and adequately. Thus, in this article, we are going to talk about some of the key factors for companies to consider when undertaking the process of international expansion.
Understanding the need for expansion
Since the process of expanding internationally is tedious, intricate, and highly complex, many might think that the risk is too high. However, it all boils down to the approach and attitude during the process. The need for expansion comes from continued success, which at times could make the need for expansion seem nearly incontestable. Expanding indicates that there are new markets available and in demand for the product or service offered. As such, in this scenario, the perfect setting for expansion is present and must be utilized to the fullest extent.
Let’s talk about the why
There are multiple reasons why companies should undertake the process of international expansion. While many can point out the financial benefits of expansions, let’s address some of the more overlooked aspects of why companies should expand internationally.
- Competitive advantage (Expanding internationally allows for a broader advantage over competitors operating in smaller markets)
- Expansion allows for diversification (Operating in multiple markets allows addressing those markets differently. Companies that operate in one market are subject to market changes that can affect their overall performance )
- Greater access to international talents and skillful employees (The requirements for employees become diverse as they come from multiple nations and hold different educational and professional backgrounds )
- Overall improved company reputation (Global recognition attracts new partnerships and clients that allow an increased number of professional endeavors)
- Cost savings (Manufacturing in countries with lower overall operational costs)
How can companies expand effectively?
There are multiple ways through which a company can expand its presence on an international level. Furthermore, it is worth noting that the process does not necessarily include direct involvement through the offering of products or services. Certain companies expand their impact through acquisitions, others prefer heavy use of marketing techniques, and some prefer the pathways of organic growth. The following list presents a number of effective expansions strategies that companies can utilize to achieve their goal of internationalization:
- Specifying the markets to enter
- Managing localization and translation
- Merging with other local companies
- Acquiring local companies
- Utilizing licensing arrangements
- Franchising
- Establishing distribution networks
The above-mentioned strategies entail focal components of paramount importance that when executed properly allow for a smooth transition into the status of an international company.
The linguistic aspect of internationalization
Entering a new market is never easy and is associated with a number of issues that require continuous care and attention. This is why addressing even the smallest of details is of key importance. When entering a new market, it is important to understand the culture of the target location. This is where the linguistic aspect comes into play and addresses the target customers in a way that is familiar and welcoming. Hence, hiring a professional translation company can significantly improve the initial contact with the potential customers of a new market. Moreover, incorporating professional translation services can also smooth out the channels of communication between employees that are part of an international company.
Key takeaways
Clearly, companies operating in multiple locations across the globe have certain advantages that allow them to either top the markets they operate in or be a fierce competitor within them. Expanding globally is not easy. However, the benefits associated with doing so are vast and make up for the struggles faced along the way. Going international refers to living up to the true meaning of the word and is achieved by addressing cultural differences specifically. Succeeding in doing so can substantially improve the overall performance of businesses once they have become international. All in all, expanding internationally has its challenges, benefits, and confusing points that all aid in growing a company’s character.
