If your business is interested in embracing globalization, developing a global expansion strategy is vital to your success. Show
October 20, 20219 mins read Global expansion is undoubtedly one of the best ways to tap into international markets, acquire world-class experts, and set your company up for long-term success. But without a solid strategy, global expansion is near-impossible and can result in delays, extra costs, and wasted resources. This guide will give you a clear understanding of what a global expansion strategy is and how your business can formulate its own plan successfully. You’ll learn the best practices for planning market expansion step by step, from the consideration phase to launch. Why You Need a Global Expansion StrategyHaving a considered business expansion strategy in place will help you to:
What Is a Global Expansion Strategy?A global expansion strategy is a formal business plan that outlines how a company intends to expand its operations into foreign countries and markets, while mitigating risks and enhancing revenue growth. To be successful, it should include clear timelines and budgets, thorough research, realistic goals, and dedicated talent. Your strategies for international expansion should give clear structure and guidance to those in charge of executing it, thus making it a crucial part of your overall global expansion process. How to Create a Successful Global Expansion StrategyCreating a robust global expansion strategy is a big task; it requires enough time, dedication, and resources. But it’s not an impossible feat, and when done right, your global expansion plan will make scaling your business far easier and more successful in the long run. To help you hit the ground running, we’ve broken down the global expansion strategy process into six simple steps. 1. Set Company Goals to Guide Your International Expansion StrategiesBefore you jump into a global business expansion, you first need to set clear company goals. This will give you and your teams direction and purpose for the short, mid, and long term, driving the business forward sustainably. Setting company-wide goals will help you to understand where global expansion fits into your company vision and which goals it can help you achieve. It’ll also help you prioritize certain aspects of global expansion, set aside an appropriate budget, and give you a clearer timeframe for when you need to achieve each step in the expansion process. When setting goals, consider what the main aim(s) of your global expansion should be. For example, your global expansion plans may be led by factors such as:
Each of these potential drivers for global expansion will result in very different goals that you would need to set and plan. To help you set achievable company goals, there are many frameworks you can use, such as OKRs (Objectives & Key Results) or WIGs (Widely Important Goals). But whichever framework you use, your goals should be S.M.A.R.T.:
2. Do Thorough Market ResearchOnce you’ve set company goals and understand where global expansion fits into them, you need to carry out thorough research into the markets you wish to enter. This will help you identify opportunities and obstacles before you start spending money to execute your expansion strategy. When done well, market research can help you maximize profitability, decrease risk, and reassure stakeholders and investors that your global expansion plans are substantiated. Here are just some of the questions you should answer before entering a new market:
There are many tools you can use to help make researching target markets easier, such as country-specific databases like the OECD. Once completed, you should have a better idea of which markets to prioritize in your global expansion strategy. While the end goal may be to expand into dozens of countries across all continents, it’s best to stick with a select few high-priority, low-risk markets to begin with. You could start by expanding into Europe or another strategic area, for example. This expansion method will allow you to test out your international expansion strategy and make any necessary adjustments before investing more money and resources. 3. Evaluate the Different Types of Global Expansion Strategies Available & Choose WiselyThere are many methods to expanding business globally, but what works for one company may not work for yours. Use your market research, company goals, and budget to determine which international expansion strategy is right for your company. The main types of expansion strategies are:
Each market expansion strategy has pros and cons. For example, licensing is fairly inexpensive and allows your business to expand rapidly, but it can lead to a loss of control over quality, messaging, and reputation. On the other hand, Greenfield Venture allows your business to remain in full control of operations, but it’s an expensive and complex process from start to finish. Which Option Should You Use to Expand Internationally?Choosing the right business expansion strategy depends on your timescale, budget, and goals. Global expansion isn’t just for big corporations anymore, but the size of the company will likely determine the type of expansion strategy you use. For enterprise companies with an expansive budget and plenty of resources, acquisition or Greenfield Venture may be the most attractive option, for example. However, for start-ups and SMEs with a lower budget, partnerships, licensing, and exportation may be more cost-effective methods of global expansion that allow you to get your foot in the door. At Omnipresent, for example, we use a mixture of owned entities and strategic partnerships to carry out our own global expansion strategy. Our two main reasons for expanding internationally are: 1. To hire the best talent available around the globe To achieve these goals, we’ve adopted a thorough and multi-faceted approach to global expansion. Here’s a brief overview of what we do:
4. Hire the Best Local TalentHiring local talent can make global expansion simpler and more cost-effective, especially if the target market is very different culturally and linguistically from your existing markets. Having staff on the ground helps you to:
If you’re worried about the costs of hiring a lot of new talent, don’t! You don’t need to hire a fully fledged team in each new market to reap the rewards. Think strategically:
Every business has different needs, so evaluate what local talent would benefit your global expansion strategy the most. How to Hire Local TalentHiring remote employees abroad may seem daunting. After all, setting up a local entity in each new market can be time-consuming and requires a sound knowledge of local regulations for compliance. You may be tempted to hire independent contractors instead, but that can be risky, too. The simplest solution is to partner with an Employer of Record (EOR) service, like Omnipresent, which employs staff on your behalf and handles all the associated administration for you. Using an EOR is faster and less risky than employing international talent directly, and it’ll make the global expansion process much smoother as a result. 5. Select Local Partners CarefullyEven with employees based in your target market, you’ll likely need to work with local partners in some capacity. For example, you may need third-party logistics partners, legal advisors, or marketing & PR agencies to execute your international expansion strategy successfully. But before signing any contracts, be sure to do your due diligence. Here’s what to look for in a reliable global expansion company partner:
You may even consider implementing a trial period with your chosen partners to assess how well they work with your business before committing to a long-term relationship. 6. Launch Your Product or Service in New Market & Continually MonitorNow’s the time to launch your product in the new market and get your message out to your target audience! First impressions matter, so use a range of relevant marketing channels to create a stir, including localized advertising campaigns, dedicated social media accounts, local media coverage, and special events. Once launched, you should continually monitor progress and adapt your strategy as appropriate. By seeking regular feedback from local customers, you’ll have a better understanding of the target market and what you need to improve to meet their specific needs. Which option should you choose to expand internationally?Exporting is one of the most common ways to enter an international market. It's a simple entry mode that gives your organization a reason to pursue that new market. The initial advantage of exporting goods is that your organization dodges the expenses of establishing a subsidiary in that country.
What are the 5 ways to expand internationally?The five tips I found most helpful when expanding internationally are:. Learn the language. Language is a big factor in the success of your company's international growth. ... . Know the regulations. ... . Broaden your team. ... . Growth means opportunities. ... . Keep an eye on the time.. What are the 3 strategies for international expansion?There are three main international strategies available: (1) multidomestic, (2) global, and (3) transnational (Figure 7.23 “International Strategy”).
How can international trade be expanded?Here are the key concepts to incorporate in your international trade game plan for greater success:. Deliver Strong Offerings. ... . Research the Market Opportunity Extensively. ... . Build a Robust Supply Chain. ... . Stay Up-to-Date on International Law. ... . Build Strategic Local Partnerships. ... . Build a Winning Team. ... . Leverage Local Resources.. |