Companies look for growth wherever they can find it. Expanding from the local, familiar market to the global marketplace gives a growing company access to more customers, new talent, and greater possibilities.
However, there are competitive challenges that companies must be prepared for in order to find success during their global expansion.
Below are some ways that a company can gain a competitive edge and find success in the global marketplace.
Defining the Global Marketplace
In most instances, the global marketplace is centered around national or regional competitive spheres.
Arthur Thompson, A.J. Strickland, and John Gamble are successful business executives who have co-written over a dozen educational books on business strategies together. According to them:
“Global competition exists when competitive conditions across national markets are linked strongly enough to form a true world market and when leading competitors compete head-to-head in many different countries.”
Read more: Understanding the Global Marketplace
Entering A New Market
When companies decide to compete internationally, they should not automatically use the same strategies that they used in local markets. Thompson, Strickland, and Gamble suggest that companies should consider:
- Whether to customize products or services by market or produce the same thing everywhere
- Whether to use the same strategy everywhere or modify it by market
- Locating production, distribution, service centers, and offices to make the most of the location advantages
- Best practices for positioning their company in new markets
A company’s approach to strategy is key to gaining a competitive edge. A survey report from Oxford Economics, Manufacturing Transformation, shows that many executives are rethinking their current strategies in order to go beyond operational excellence to gain a competitive edge.
As companies explore new markets, knowing how to adopt a strategy to fit new markets is key.
Read more: Top 5 Global Expansion Strategies
Understanding Local Labor Laws
For instance, countries such as Japan, France, and Brazil make it difficult for companies to dismiss a worker. Companies that fail to comply with local labor laws in countries where they have operations may face fines, work stoppages, or lawsuits.
One of the best ways to ensure compliance in global markets is to work with an employer of record (EOR). An EOR partner navigates labor laws in new markets on your behalf, simplifies hiring, paying, and managing a distributed workforce, and helps your organization avoid needless costs and delays—so you can focus on international success.
Learn more: What Is an Employer of Record (EOR)?
Speed to Market
If a company is unable to enter a market quickly, it may not see the success it expects, no matter how innovative its product and service offerings are. A slow speed to market can result in a company’s product or service being considered outdated, especially if their competition was able to enter the market faster.
Here are some ways to improve speed to market:
- Foster collaboration and communication within the team
- Focus on improving efficiency in the organization
- Develop an effective, detailed strategy for market entry
- Keep the team on track to eliminate wasted time
Strategies for Competing in Global Markets
Below are best practices for successfully competing in the global marketplace.
1. Scour Emerging Markets
International companies based in mature economies can use their relationships in emerging markets to speed along innovation. Whether a company chooses to bring new products from emerging economies into mature ones or is taking current offerings into a developing country, emerging markets are ripe with opportunities.
Taking advantage of these growing economies can give a company the competitive edge they are looking for in global markets.
2. Form Strategic Partnerships
Thompson, Strickland, and Gamble write that strategic partnerships can help by “filling gaps in technical expertise and/or knowledge of local markets.”
As we mentioned above, partnering with an EOR gives companies access to in-country experts. A EOR partner not only provides insight into local labor laws but also helps companies onboard top talent in their desired country—even in countries that might face labor shortages.
3. Innovate Everywhere
Innovation should be a part of every aspect of a business. Companies need to innovate at every level, especially when planning for a global expansion.
The key to innovation is to develop a strategy that harnesses market trends, as opposed to reacting to them. Companies that are able to do so successfully as they expand into new markets gain the edge over their competition.
By employing a strong strategy, understanding local labor laws, focusing on speed to market, and using partnerships to drive efficiency and innovation, companies can gain the competitive edge they are looking for in the global marketplace.
Reach Your Global Growth Objectives With Velocity Global
With a reach that touches 185 countries and counting, Velocity Global can help your organization realize its global growth objectives no matter where they may lead.
Our Employer of Record (EOR) solution simplifies new market entry without the need for entity establishment and makes it easy to hire, pay, and manage a distributed workforce with speed and compliance.
Contact Velocity Global today to expand your global reach with ease.