Once a company expands domestically they often set their sights on international expansion, depending on the products or services that they sell. Many companies come to understand that doing business internationally is a whole different ball game and requires special considerations. Here are some of the considerations when looking to grow your business internationally.
Choose the Right Country to Expand to
Not all international markets are created equally. Some are more attractive from a socioeconomic way and are more lucrative to enter. Further, it is important to avoid markets with unstable currencies and uncertain laws which can disrupt business and create instability. Locate attractive markets and then expand from there to other desirable ones, avoiding those that pose significant risks.
Understand the International Market
It is important to acknowledge that international markets are often very different than domestic markets and the exact nature of the differences will vary by country and industry. Spend some time to learn the international market that you are entering, understand their cultural norms, and price your product in a way that is attractive to the local customers even if that means taking a significant reduction in the profit margin. Make sure the product or service that you are offering meets a need of an customer in an international market.
Making a First Impression
New companies to an international market are able to make a first impression on a new group of customers. Sometimes this results in surprising outcomes for a customer in a domestic product. Products that are cheaper in one market may be viewed as a luxury high end item in an international market. This distinction often comes from a first impression which can make the difference in how a product is viewed for the future of the company in the international market. Spend care to position your company accordingly in the new market as you may not get another chance to create a first impression.
Size Up the Local Competition and Understand Your Competitive Advantage
The best way to learn about an international market is to study the competition and to see how they are positioning themselves in the marketplace. It is a good idea to scout out both big and low-end competitors and to see where your products fit in terms of quality. From there you can develop a better idea of how to position your company in the international market.
Hire a Local Consultant
Your employees will only know so much about an international country and their laws and customs. It is a good idea to hire a local consultant to advise you on the local market, help you to identify distribution options for your products and services, and help you navigate the local laws. It is important for a local consultant to advise you as they best understand the international market.
International markets provide some large opportunities for companies looking to expand. There are many growth opportunities in these markets, but appropriate care needs to be taken to seize these opportunities effectively.