International expansions are the byproducts of globalization. Globalization although could be traced long back to the third millennium BC, began on a large-scale in the 1820s. Globalization is what caused the world to turn into a small village.
Opportunities for betterment were bound to distance. Same was the case with businesses.
People were trading things and services through barter system earlier. When money came into action, the scenario changed.
But nothing changed the world as globalization did.
For the businesses, it brought a whole new set of opportunities with it. Opportunities, due to the infinite number of possibilities they bring, is the main reason why companies go international.
As per the saying, ‘never put all your eggs in one basket’, one should never depend on one stream. In the scenarios of businesses, it is often too much of work to start a new one. So why not expand your existing one internationally?
According to a 2016 survey by Wells Fargo, 87% of U.S. firms believe international expansion to be a sure way for sustainable long-term growth. And 25% of European businesses are planning international expansion according to an analysis published in the annual EY Growth Barometer.
For the U.S., benefits of global expansion are that they can reach to the 96% world’s consumers living outside their country. While for developing countries across the world, the international expansion brings foreign currencies, investments and technology. These are a few of the reasons for international expansion among many.
International expansion of businesses aids the same effectively. Globalization through international expansion increases the number of choices for everyone.
When businesses go international, they offer opportunities to others while grabbing new for themselves too.
So, if you are considering taking the leap & enter new markets, consider the following key benefits of going global for companies.
Why expand business internationally
Once you have reached the potential in your local market, the growth becomes slower than before. Thus, finding and expanding your business internationally brings you various new opportunities. New markets are always different from the one you have your business in. This ensures evolution into better.
Bigger Consumer Base
With new market comes new consumers. For any business, consumers are always the most important part. Their impression of your product or business is what matters the most.
More the number of consumers, higher are the chances of influencing the people.
The growth of business and the profit from it is directly proportional to the number of consumers. International expansion provides you with a greater number of consumers and thus results in more revenue generation. This brings you the profit and the ability to invest in your business more.
Foreign investment markets
This is the most prominent among the various benefits of global expansion.
Different countries have different investments guidelines. Many developing countries welcome foreign investments for the good of their people. Taking benefit from that, you can expand your business there and support an economy.
Developing countries have the space for growth and thus are opportunities that international expansion brings with it. But expanding into new foreign markets and forging important connections to fuel your business growth can be an overwhelming process.
Working with seasoned business setup consultants on your expansion strategy can help you alleviate these challenges and find success in overseas markets.
Opportunity to diversify
With the international expansion, you get the opportunity to understand a new market, consumers and their needs.
This lets you offer your services according to the demand and that leads to diversification in your business.
This also brings diversification in the assets of your business and thus can save you when sudden unfortunate events strike.
Access to cost effective resources
Resources are very important in any business. The raw material needs to be sourced from its site and international expansion in such locations give you access to the local resources at better rates. This saves the production cost of your business.
Access to talent
International expansion of any business needs human resources. Businesses depend on humans for their success. International expansion gives you a chance to hire more talented, innovative, professionally educated and diverse set of people. This assures new ideas and techniques in your business.
Advantages over competition
You surely must have competition from other businesses in your area of services. To overcome that and come out as the leader you can expand your business internationally. So, even if you do not do well in one market, the other market pays for your efforts.
You cannot eliminate competition, but you can have your backup for when you are falling victim to it.
Help the world become a better place
When you expand internationally, you understand the world better. You come across people your business can help. You get the chance to affect a diverse group of people through your CSR activities. Your business gets the chance to change lives and make our planet a better place. This also earns a good name and fame for the business internationally.
Now that you know the reasons why businesses go international, plan the same for your business too. Use the benefits of global expansion in your favor and grow your business internationally.