What is International Business? Key steps to expand your business globally
Nowadays, in the age of globalization, most companies want to expand their market abroad. Taking your brand overseas can bring many advantages, benefits, and perks. However, many companies fail in their international expansion journey for several reasons but principally because they have not prepared as well as they could.
Before you decide to go to global, the first question arising in your mind is, “Are you ready for international expansion?”. It is not just because you think that your product or service can expand globally, then it will be.
We all know how hard it will be to expand to another country successfully. In this blog, we would love to suggest some useful tips for your international business planning that you can follow step by step to take your business to the competitive global business market.
Table of contents
- What is international business?
- Why expanding your business globally is necessary?
- What are the challenges for your business expansion?
- Key steps to expand your business internationally
- Do your research before embarking your international business
- Adapt to different cultures by gauging the behavior of customers
- Optimize your SEO
- Focus on customer support service
- Make your products and service familiar to your local customers
- Review the regulations and compliance of the target market
What is international business?
The word “international business” appears many times nowadays. People can understand it but not really know its notion. The definition of international business cannot explain in a single word or the shortest form.
International business is also known as globalization. It refers to the trade of goods, services, resources, technology, capital, and knowledge across national boundaries.
International business occurs in different formats:
The exchange of goods from one country to another. It can be exporting, importing, and trade.
Contractual agreements that allow foreign businesses to use products, services, and processes from other nations by using the licensing, franchising type.
The manufacturing, formation and research, and development, and distribution facilities in foreign markets, etc.
To conduct business overseas, we need to recognize the diversity of the world marketplace and are able to cope with potential risks in the global market.
International business can bring many benefits to your company, but besides that, it also brings challenges that we must anticipate.
Why expanding your business globally is necessary?
There are several benefits to your business by expanding internationally.
Increase revenue and brand awareness
The international expansion will help your business to explore new markets, attract new customers, which helps enhance not only your sales and revenue but also make your brand awareness to a more global scale. By exploring a new market, your company can take a chance to extend the sales life of your products and service, which will help you increase your sales.
Going to a new market where some products and service are not available, and customers there can not buy it, it allows you to have access to new and eager consumers ready to purchase your product and services.
Reduce your dependence on the current market
Expanding a store internationally is also an opportunity to decrease the reliance on the current market that you are already established in. You might currently be in a highly competitive market with many other players. You are not able to take advantage of this market and increase revenue.
At this time, moving your business globally will be one of the effective solutions. Instead of focusing on only one plan like putting all the eggs in one basket, you can separate the resources to make money without having to depend too much on a specific market.
Opportunity to cooperate with talented people and use external resources
Another crucial advantage to international business expansion is the fact that you can have the ability to use the other country’s resources like technology, expertise, and know-how knowledge in a specific field. It gives you the possibility to use better technology and learn better work processes, which will ultimately improve your business as well as your sales.
I will also have a chance to work with talented people that are experts in your industry. By collaborating with these people, you can learn from their skills, experience in order to understand how things work with a new country that you have just expanded to.
Become a first mover
One of the big reasons why many companies want to expand internationally is because they would like to get ahead of their competitors. They will get all the advantages of becoming the first-mover.
Consumers will know your brand before your competitors. And it may be difficult to change customers’ habits and to think when they have some brands in their minds. They will come to yours instead of your rivals’.
What are the challenges for your business expansion?
Despite all the advantages that come with expanding your company internationally, you will need to remember that there are also many disadvantages you will primarily need to take into account if you want to have a successful expansion process. Some unhealthy factors may occur with your international business expansion.
Language and Culture barrier
One of the vital disadvantages that you need to take into account is the different languages and cultures when you do business in a foreign country. So researching the country where you are going to invest is an important step in order to properly understand the cultural differences you might have and what you can do in order to tailor your products or service to their specific habits and culture.
The common mistake is that people only realize their product is not a good fit for the specific country, which makes them lost money.
This is the reason why making market research before expanding is necessary if you want to avoid these disadvantages.
International compliance and regulatory issues
Nowadays, many free trade agreements allow businesses from one country to sell their products to another country. But it might still be a bit more challenging to expand into different countries.
You might have to pay additional taxes and other fees that will give you the possibility to sell your products in said country.
For other countries which are not in the free trade agreements, you need to pay attention to research their law and compliance to avoid making mistakes during your business.
Currency exchange issue is also another issue that you might encounter when going internationally. The constant fluctuation of exchange rates from one currency to the next can help you increase your sales, but it could lead to a decrease as well.
Remember that your currency can harm your ability to trade. Paying attention to the fluctuations often will, therefore, be necessary if you want to avoid having currency exchange as an important disadvantage and issue.
It’s not easy to convince foreign customers to trust your brand while there is a similar product that is made in their home country.
For some big companies with famous brands, they can get customers’ trust more easily. But for small and medium-sized companies, it needs to work harder to persuade the international customers that their brands are trustful and better than the local competition.
Key steps to expand your business internationally
Do your research before embarking your international business
The most important thing that you need to do before growing your business in the new territory is to do research.
Conducting a marketing segment analysis will help you figure out where or not your product or service can meet the demands of the intended market. If your product or service is doing well in your current market, it does not mean that it will give your business an international acceptance.
Creating a strategic plan is necessary in order to deal with different markets in various countries. There are some essential plans that you need to analyze with your team to know more about your intended market that you are going to expand to.
PEST is an acronym that stands for Politics, Economics, Society, and Technology. PEST analysis has become increasingly popular among business owners before launching their stores.
You may want to read more about the article PEST analysis
SWOT analysis is well known as a useful tool to set a plan of action and develop your company. SWOT focuses on four keys elements: Strengths, Weaknesses, Opportunities, and Threats.
These four elements will be evaluated into two groups: internal and external factors. Strengths and Weaknesses can be classified in the internal group.
Strengths represent the advantages of your company, which make you outstanding and different from other rivalries.
Otherwise, Weaknesses show the disadvantages that your company is facing. This is important to acknowledge them as it is unhealthy for your business, and you need to take action to solve it as soon as possible to avoid losing sales.
External factors include Opportunities and Threats. You cannot control these factors as they come from changes in the market, economic, and political environment. To adapt well when these changes occur, you should figure out the positive impact, which is Opportunities and the negative one that is Threats which can influence your business. Then, you can prepare different plans to cope with it.
The analysis will help you determine not only what are the strengths and weaknesses of your products, but also what kind of opportunities and threats there are in the market.
Adapt to different cultures by gauging the behavior of customers
After analyzing the demand for your products and service in the global market, you should also understand the tone of your consumers in new territories. It requires to adapt to different cultures.
Even you have a high quality of your products and services, but if it does not suit the style and behavior of intended customers, your business will not succeed. To grow your business in the international market, you need to make sure that your business should seem original to the locality.
McDonald’s is an excellent example of the right adaptation. With the strategy closed to localization, McDonald’s adapts to the needs of consumers as required by the cultures of specific countries by providing its menu to each culture. In this way, McDonald’s shows that they respect the differences between cultures and adheres to the country’s policy when they have a plan to add an additional item for their menu.
For example, in Indonesia, the majority of the population is Muslim, McDonald’s replaces pork by fish. Since Indonesians prefer rice over bread, they serve rice together with some spicy meals that locals like.
In India, with a large number of consumers who are vegetarians, McDonald’s opened its first vegetarian restaurant to cater to local vegetarian customers.
Optimize your SEO
With the explosion of technology and global opportunities, store owners need to go beyond the traditional brick and mortar store approach. Building an e-commerce store also helps your business approach to customers, especially when expanding it globally. SEO is a necessary step to focus on.
What is SEO meaning is a question raising in your mind. SEO acronyms Searching Engine Optimization. The purpose of SEO is to attract as many viewers as possible to your site. By gaining a high position in the search results page of any search engine link Google, you can increase the number of traffic visiting your web store.
Most customers nowadays have the habit of searching on Google or other kinds of search tools to find their desired products. If your site gains a high rank and takes as much attention as possible, your brand name will have a chance to be in customers’ minds.
- SEO Best Practices For Ecommerce Product Page
- SEO in 2021 & What Google is looking for
- 9 Tips and Settings to SEO Magento 2 Product Pages
Focus on customer support service
Once you launch the business overseas, you will have more international customers. Customer Support will need to be significantly focused when you expand globally.
You will nor serve only for your local clients but also for your international one. They are coming from different countries all over the world with a different timezone. Ensuring that you can answer their question as fast as possible will help you gain their trust and satisfaction.
Delivering excellent customer service is critical to retain clients, then make your business grow. There are different types of customer service such as telecommunication, email, live chat, and social media.
Using Chatbots on the live chat will make your customers feel that they are always be served immediately. However, it also causes a negative impact if a customer wants to speak with your company’s representatives, they may get frustrated with an automated response of a chatbot.
Chatbots are not best suited for every business and industry. If you provide service with consultations, a chatbox is not probably fit your business.
You may want to read more about the chatbox with the blog Revolutionize Customer Experience With The Beset AI Chatbots On The Planet.
Make your products and service familiar to your local customers
Localization of a product is a process consisting of customizing a product to a specific audience and geographical location by translating a name or slightly changing the packaging, for instance.
You will need to determine if your product requires any localization. Then if it needs, it is necessary to do your research in order to see which changes you can make to make this product more attractive to this specific audience.
Besides, if you create your website for customers coming from different countries, you need to redirect them to a suitable store view with their language and currency. It makes customers familiar with your business.
If you are using Magento - one of the popular e-commerce platforms for your store, the store switcher module can be a useful tool to help you do this.
Review the regulations and compliance of the target market
To ensure that you can expand your business globally to avoid any potential legal troubles, you need to implement reliable legal processes.
Review the regulation in the specific industry that you want to attend to make sure that you have all the certification and compliance that it requires. Besides, you need to update the regulations to minimize financial risk and penalty.
For example, on May 25th, 2018, the General Data Protection Regulation (GDPR in the acronym) becomes active. It requires protecting personal data privacy and control over personal information in the European Union. All the store owners who have their e-shop selling products to the EU need to update and follow this rule.
Related post: Magento 2 & GDPR5 must-known
To sum up, there are lots of hurdles to overcome if you want to expand your business internationally. Growing your business abroad in the age of globalization can be risky, but if you have a clear strategic plan, you will receive rewards. Observing the challenges that your company will be faced with is what a successful expansion requires.
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