It is quite obvious nowadays that in order to maintain a competitive edge companies should expand internationally, if they do not do it, their competitors will. The competitors will get everything: new customers with high spending power, skilled and talented employees, and increase in profit, etc. Product extensions and completely new product categories are also other options but eventually most companies recognize the need to grow globally. Furthermore, economies of scale would be formed through the distribution both in domestic and abroad and as a result Chinese companies could reduce operating cost and earn more profits. Then there's the fun factor in taking a business global. Further, packaging standards are different from country to country. Marketing your business internationally expands and diversifies your revenue sources by introducing your goods and services to customers in other countries.
If you plan to physically set up shop in a foreign country, look into attending trade shows and trade conferences in that country, too. But others continue to give little thought to whether the trend has played out—or was never likely to benefit a company in their situation. For instance, a multinational will choose an advertising agency which has a presence in all the markets where the multinational is selling its product. Protect your company by exporting, using the Internet, licensing or franchising your products. It can use domestic market expansion strategy, product development strategy, capabilities development strategy to neutralise threats currently encountered. Product diversification similarly insulates you from the risks of declining interest in a particular item. Conduct foreign market research and identify international markets.
In some industries like advertising, customers want their suppliers to have international presence so that suppliers can contribute in most of the markets where the buyer is operating. As you grow your business globally, you must support the additional workload. Finally, if you will be working with a partner or have large, steady customers, remember that nothing beats the occasional personal visit, so factor travel costs and time away from your home office into your business and marketing plans. Generates economies of scale in production. In other cases, a domestic player would start operations in the home country of its global competitor, to divert the attention and resources of its competitor towards operations at home to safeguard its home market. Are there potential benefits for our company? Basically, a global firm turns out to be an giant organisation which runs and operates businesses in more than one markets across the globe.
Cultural differences were problematic as well: Workers in Spain preferred very late office hours, for example, while workers in Russia were taking truck cleaning soap home due to shortages in consumer supplies. Rogers noted that while you should stay true to your overall brand, it's important to tweak your product offerings to account for local tastes. Shifting borders and the instability of some foreign governments can pose a threat to the security of a business overseas. My next post will cover why you should export and how to conquer these fears. Even if a company decides to concentrate on its domestic market, it will not be allowed to pursue its goals unhindered. Thus creating higher profits because its expanded its product spread geogrpahically.
If such figures have to be realized, companies have to move out of their domestic markets. Cultural and language barriers are the most obvious of these considerations. Content University is available at www. Competing for New Sales Closely connected to the goal of improved profit margins is the desire to increase sales. For example, the label used to describe a trend may get stretched far beyond its original meaning.
When a company goes into a global market it opens its products to be sold at much higher levels as the people all over the world will see them. There are also significant cost savings that can be associated with going international. Traditionally many companies have stayed focused in their domestic markets and have refrained from competing globally. These companies, the argument goes, can apply existing competencies—providing voice and data communication, delivering letters and parcels, distributing electricity and water, even dealing with the deregulation process itself—in new markets. Slow Growth of Domestic Market, 4. I choose this subject because, as you know, we come from all around the world, Canada, France, Spain, Japan and we are all interested in the global vision of our world. Is your logo color appropriate for a business in that country or does it mean something socially inappropriate, such as death? While consumer tastes in areas such as electronic goods and clothing converge, different cultures still maintain their distinct ethnic preferences in certain product categories; food for example remains a largely local product.
A global sales base can help cushion the pain of losing customers via economic hardship. The more you produce, the greater the chances of lowering the per-unit manufacturing costs. Even smaller enterprises—urged on by the financial markets, by investment bankers and consultants, by the media, and by the moves they see rivals making—feel the strategic imperative to go global in one form or another. Better price can also be found on certain countries where the companies put up other branches. In some cases, companies have to follow their partners over. The knowledge you gain from learning the ropes of international business will make you open to new ideas, new approaches, new marketing techniques, new customers and new confidence to take on the world! Global economies of scale are one of the main rationales for international expansion. Purchasing economies can be achieved only with items furnished by global suppliers to all markets—and these typically represent at most 20% of all supermarket items, because of cultural differences and the frequent need to source fresh food locally.
When growth strategies are used up on the national level, the next path is to seek out international growth. Companies often lack the skills needed to unlock the coffer holding the prize. Their strategies hinge on coordination of people or processes—no easy feat. Cultures are becoming more and more similar as Western influences are allowed to permeate. Additionally, realizing synergies across a far-flung network requires common information systems and management processes, and Ahold made little effort to integrate its acquired businesses into the existing organization. Stockwell and combined those initials with the first two letters of his surname, and the first Tesco store opened in 1929 in Burnt Oak, Middlesex. In southern Europe, there is a lot of personal conversation and activity before business issues are addressed, and cutting to the chase is seen as being impatient.
A company may want to reduce costs by relocating closer to a supplier or benefit from lower production costs by expanding operations to another country. She started her career at a radio station in Indiana, and is currently the social media strategist at Business News Daily. The company has been most successful with its own international efforts when it matched the business model to the expansion well in advance of the actual move. I am co-creator of Content University, which helps entrepreneurs and executives learn to write and to tell their stories better, and how to use their strong thought leadership content to advance their companies. There are many considerations in safely and effectively expanding a regional business to other parts of the world. Going international is a strategy that is influenced by a variety of factors and is typically implemented over time. Acquaint yourself with the local culture in each country -- everything from business practices to search engine mechanisms.