A growing business is good news for any business owner, and it’s likely one of your goals. One of the routes to growth you may be exploring is a global expansion. 3 global expansion strategies.
The idea of expanding your business globally is attractive for many reasons. It provides more opportunities and benefits beyond mere growth. You’ll want to be sure you’re expanding wisely, however, and to do so, you’ll need the right strategy.
Whether you’re just beginning to consider an international expansion or you’re planning to revise your plan, you’ll want to consider these three strategies for a successful global expansion. Adopting one or more of them could be the difference between runaway success and a lackluster launch.
Strategic partnerships allow companies to take advantage of the expertise and experience of existing corporations in foreign markets. A strategic partnership or international joint venture involves a greater direct investment than exporting, making it a logical next step in global expansion. International partnerships can leverage local brand equity as a way to introduce foreign goods with built-in credibility. In return, your company can add value to the partnership by providing exclusive distribution rights for goods previously unavailable in a specific market. An international strategic partnership presents the challenge of splitting managerial control between two companies. In general, it is wise to allow the partner in the sales market a greater degree of operational control to fully leverage the local experience of its managers.
Unless there is a major strategic reason that compels you to do otherwise, you should really only dive into a market if you’re confident you can be a top 3 player. Remember, you will likely only get one chance to enter on the ground, so you need to enter with a splash and do it at the right time. If you’re not confident you can be a top 3 player, then the cost of entering may outweigh the return.
Venturing into a new country requires learning about the cultures within and how they might perceive your brand. If you want your expansion to be successful, you’ll need to appeal to the people you will be serving.
Find out everything you can about local traditions, values, religions, holidays, and other cultural differences you’ll need to adapt to. Research income data to know how to price your product for better sales. Learning everything you can about your chosen market can give you a good indication on whether your business can succeed there.
Taking your business into new international markets is a risky and capital-intensive strategy. Following these best practices will minimize your risks and set your team up for success.