Whether looking into domestic or international growth, companies need to focus on opportunities that bring healthy growth to their team and organization. Business thinkers divide growth opportunities into four possibilities, defined on two axes. The first axis is current market vs. the new market. The second is current products vs. new products. The two axes work together in the following ways:
- Achieve growth by getting better penetration for your existing products in your current market
- Produce new products for your current market
- Create new products for a new market, i.e. create a startup
- Create sustainable growth by entering a new market
For many businesses, international expansion is the answer for reaching new levels of profitability and growth.
Benefits of International Growth
There are many benefits to international growth beyond access to new customers. Global markets have different business cycles, growth patterns and cultural values that can make expansion even more attractive. Benefits include:
- Have different purchasing cycles to even out seasonal changes in the market
- Reduce your dependence on your current, local economy and hedge against a slowdown in the market
- Provide access to new talent and cultural ideas to improve your existing product or services
Tips for Healthy International Growth
Once you’ve decided to expand into international markets, you will need to do so carefully and strategically. Here are some tips that can help you achieve healthy international growth.
Identify the Right Market
Finding the right market to enter is one of the first steps. When you are searching, research the “big picture” of each market to see how much potential there is for your product or service, the intensity of the competition, and the state of local government and infrastructure.
Develop a Strategy
You can’t leap into an international market using the same business plan for your domestic operations. Every country’s market is different and has different rules for competition, marketing, and labor laws. If you establish your goals and create an effective strategy for expansion beforehand, you can better adjust to succeed in different cultures.
Understand the Local Culture
A little research about local customs can go a long way. Business partners and customers will feel respected if you understand the basics about how people greet each other, the kinds of topics that make for good small talk and what makes for appropriate interactions. If you don’t do well with cultural expectations, offending people can close many doors.
Understand the Market’s Business Culture
A country’s business culture is different from their local culture. Business culture describes the kinds of management styles that work for local staff, how organizations successfully structure themselves or what business partners expect from you. The more you know about your new country’s business culture, the better equipped you will be.
Learn Local Business Laws
This might seem obvious, but local business laws are essential to achieving international growth. Consider hiring local legal counsel; they will have insight and experience that you may not be able to find in your home country.
Develop Strategic Partnerships
Strategic partnerships are a great way to gain access to new customers through another company’s existing customer base. Find a company or an in-country partner that complements your business and join forces. A good partnership can lead to sustainable international growth.
Hire Local Staff or an Agency
Include employees that are incredibly skilled, driven, and successful in your company as part of your expansion strategy. Consider augmenting their skills with a local company or local staff to take advantage of the personal knowledge a local staff can bring to your already strong team.
Work with Experts
Don’t attempt to manage a global expansion alone. Velocity Global’s International PEO (Professional Employer Organization) solution makes it easier to enter a market efficiently and compliantly. This agile option not only helps you save time and money but also makes it easier for your company to exit a market if needed.
Moving into an international market can be challenging, but it is also an excellent opportunity to expand your business by getting access to new customers. To utilize our International PEO solution and help your company achieve healthy international growth, get in touch with our team today!