Going the international business way represents the movement toward borderless financial, trade, communications and economic integration. That said, are you ready for global business expansion? Read on to learn more about what it takes to make it works.
Concepts that relate to globalization go back to the Roman Empire. In recent times, Thomas L. Friedman popularized the same concept in his book The World Is Flat. The author argues that the pace of international trade, supply-chain systems and outsourcing is surging. Its impact on corporations, and businesses practices and logistics, is bound to develop further.
Significantly, for emerging and small businesses, global business expansion is a challenge. Shifting gears towards the world at large may prove to disrupt existing business-related activities. As a result, it is imperative that business leaders understand the full effect of globalization. This should be done with a view to determining if rewards outweigh risks.
When a business ‘goes global’, stakeholders across the length and breath of the company will have to take on new responsibilities. To execute daily tasks, in addition to the international initiative, this will be overwhelming. So, how to juggle between responsibilities well?
Due Diligence is a Must
The transition of any business, large or small, into a global business, is a dynamic and complicated process. Global business expansion requires an in-depth understanding of key targeted markets, local market trends, competitive businesses, etc. The foundation of taking a business to a global level lies in successfully launching it and driving its growth – all while completing your due diligence in every step of the process.
First things first, you should begin by trying to understand what the complete impact of your business will be on the new market. It’s discovered through market analysis.
Doing an analysis of market segmentation to determine the salability of your product is a good first step. You can do this by preparing a product gap analysis compared to local products available in the new market. Can you find out whether there’s a demand that’s not met by local products/companies?
A SWOT analysis will also help. Depending on the price of your product, you need to know whether the new market will buy it. Consider the size of the new market and how long it will take for your business to achieve targeted sales.
Formulate a Business Plan
Global business expansion cannot be undertaken overnight. Every market is unique and comes with its own nuances as a result of cultural, governmental and economic market conditions. It’s vital that you develop a strategy that is localized.
Your business plan must motivate local success. While doing this, your business must remain merged with your overall corporate strategy and goals.
Primarily, it’s important to define strategies on a short-term, medium-term and long-term basis. Goals to evaluate progress and cost/benefit should be realistic. Defining these at the start is vital.
Furthermore, a decision on the structure of the business will help you to manage it. Do you want to expand with a branch, a separate company or a sales office?
Last but not least, planning your annual budget and sticking to commit dates also helps you develop a roadmap for your new undertaking. Your business growth will be staggered when your expenses hang you high and dry (sure, there are business loans, but those aren’t always ideal, feasible solutions.)
Get Help with Logistics
While exploring the international arena of business, consider using proven senior mid-level staff from the parent company to kick start. In this way, you won’t have to depend on a local novice team starting from scratch. The right senior management team can drive decision-making and carry out tasks faster.
See that a financial infrastructure is developed. You can use the services from a global mobility solutions provider for this. Once this is in done, get local service providers for further logistics in place.
You are now ready to recruit a new team and get your product or service ready to storm the new market. The question is, can you execute your expansion plan flawlessly? Only you can answer the question.