Global expansion can be chaotic and stressful, but that's no reason to defer from taking your business international. With today's highly competitive business environment, global expansion is becoming a vital piece of an organization's international growth strategy. Based on our experience and research, we've compiled a list of the top five global expansion strategies.
Many companies are starting to hold off on infrastructure investments or hard costs until their foreign operation has matured. This is a great way to justify expenses and assure the company of a long-term ROI. However, don't be too distant; human capital is priceless. Strong, local employees can evaluate market penetration plans on a day-to-day basis, identify untapped opportunities, and make adjustments whenever necessary.
The key to hiring is to do so with a light and agile footprint but balance it against risk mitigation. Hiring international contractors is risky. Consider using an employer of record (EOR) to employ globally if you are unwilling or unable to establish a legal entity in-country.
Develop a 'leading edge' product that encourages you to expand into new countries and regions. Then test your product in the target country to ensure success and determine if adjustments are needed. Note that if a product is thriving domestically, don't assume that it will do even better overseas. Additionally, utilize associates in overseas markets to monitor new developments, maintain contacts with decision-makers, and identify opportunities.
Choose an international market to introduce your standard product or service where global competition is low. This will help free up extra revenue to reinvest in a product domestically and continue to gain market share. Take a lean approach to help you keep outside capital sources at bay and increase your equity. This is an incredibly important strategy when lending and funding are scarce.
Before engaging the global marketplace, make sure to protect yourself by partnering with best-in-class companies whose primary focus is to recognize warning signs and understand potential risks. Rely on partners—whether they are local to you or local to your target country.
Whether you engage a local attorney to protect, a consultant to advise, or an employer of record (EOR) like Velocity Global to manage your entire hiring and global expansion process, you will avoid serious pain points in the future.
Learn more: What Is an Employer of Record (EOR)?
Global mobility and expansion are major tokens of any business plan. Establishing an entity/entering another country is a long-term plan. Therefore, you should take a proactive approach when entering a new market. Do your research and make sure your entire team is aligned with this long-term strategic plan.
With capabilities in over 185 countries and a suite of global employment and expansion services to assist you each step of the way, Velocity Global can help ensure your first step in widening your global footprint is a steady one.
Contact us to learn how we can help you quickly and compliantly expand across borders.
Below are answers to your common question about global expansion.
What are 6 examples of global expansion strategies?
Six examples of global expansion strategies include the following:
- Keep a light, agile footprint when initially investing
- Adopt a clear product strategy
- Revenue gain, reinvest, repeat
- Be proactive, not reactive
- Partner with best-in-class companies
- Conduct market research
Why should you have more than one strategy when pursuing global expansion?
Adopting more than one global expansion strategy not only increases the likelihood of success when expanding overseas but also mitigates risk in the same way any robust diversification strategy might.