Expanding a business across different markets across the globe can pose various challenges, as well as opportunities.
This article will look at the different ways your business could be affected, and the chances to grow, as you expand your business internationally.
As many businesses operate across multiple markets, it is important to take heed of any opportunities that come your way. But what opportunities could be presented, and how can you make the most of them to grow your business?
Perhaps the most obvious opportunity that presents itself when expanding internationally is new markets becoming available. International expansion opens doors to previously untapped markets, increasing the potential for sales and, ultimately, higher turnover and revenue.
These new markets may be easily accessible too, thanks to modern transport, as we deal with various changes across the world.
Helen Brown, Sales and Marketing Manager at Electrix, leading manufacturer and stockist of Stainless Steel Enclosures , said of selling to markets that are based outside of your operating country: “Despite being based in another continent, the transportation options that are available to us (as a daily international shipper) can often result in transit times from the UK to the US being faster than buying internally in the US.”
“In addition, because of the effects that Brexit has had on moving goods from the UK to Europe, shipping our electrical enclosures, wireway and trunking systems to the US can prove to be more efficient. This demonstrates the benefit of us being visible globally and helps to offset any challenges closer to home.”
International diversification is a technique whereby an organisation uses international expansion as an opportunity to manage risk and protect the business in changing markets.
By spreading operations across the globe, you are not only able to attract new customers in new markets, but also able to mitigate potential risks in individual countries.
Operating a business across alternative markets while differing the business in style and size in those markets, as well as spreading assets across markets, can help to offset the impact of any economical event or crisis.
An example would be a business operating in markets in Asia, as well as the UK; the Asian market would help to manage and reduce the overall impact to the company arising from something happening specifically in the UK.
Put simply, if sales are going down in your domestic market, you lean on profit from sales in other regions.
Operating in different markets can allow your business to attract some of the best talent the world has to offer, and means you can localise the business in those different markets.
Of course, as well as the opportunities that may become available when expanding across the world, the situation is also likely to present a number of challenges. What are those challenges, how could they affect business plans, and importantly how can businesses look to overcome them?
Different countries have different languages; although that isn’t going to be a surprise to any business looking to expand internationally. It is important, however, to consider the language of the market you are going to expand into.
This can be relevant to the brand messaging, and even the name of the company. Does the name translate well, does it not make sense, or worse, does it translate into something negative and even offensive in the market in question?
Language barriers can also cause communication problems in different countries. Consider the languages spoken in your business locations, and to give your expansion the best chance of success, look to employ local talent who have a knowledge of the area and the market.
If sending staff from a headquarters or main global office to locations around the globe, it can be worth considering the use of interpreters.
Not only is understanding and communicating effectively important for the brand image and reputation, a failure to tackle a language barrier could result in an expensive overseas trip becoming a costly waste of time.
Cultural differences are also something to consider, with working hours and even working days differentiating across the world.
Many Arab countries have traditionally had weekends on Thursdays and Fridays, and while this is in some cases changing for economic benefit, working days remain something to consider when expanding into new markets, both for business reasons and respecting culture.
It is also important to consider [MC2] the implications of working in different time zones, such as communication with clients and colleagues.
Managing teams across the world is another challenge of expansion, and as we have seen with language and cultural issues, these are obstacles that need to be overcome. Even once you have implemented a regional team, it is important to have strong communication between offices and teams.
Regular check ins with other teams and managers can keep employees engaged with the business, resulting in higher levels of productivity. It is also important not to leave global teams feeling isolated – employees can be up to 15 times more disengaged if they feel they are ignored at work. Utilise technology to effectively communicate regularly.
By making the decision to expand globally, you are opening your business up to a range of opportunities and challenges.
As a business, making the most of any opportunities and capitalising on them are key to making it a success – when done effectively it can be used to offset risk in the home market.
Challenges, if dealt with efficiently, should not derail the plans and expansion, and they can even become opportunities over time.