If you have a successful business in the U.S., expanding globally could be a logical step to grow revenue. Companies of all sizes have found new opportunities and gained a competitive advantage by entering global markets.
Why go global? The advantages of international business
Done right, globalization delivers sizable advantages for your business, including expanding your customer base, opening up new talent pools, driving revenue, and increasing profits. Establishing your business in new markets can take a considerable investment, so it’s important to carefully assess how well-positioned your company is for global expansion before making the move.
Factors to consider when evaluating if global expansion makes sense
Here are some things to consider when determining the feasibility of global expansion for your company:
Globalization takes a significant commitment of resources. It’s important to carefully estimate the investment of both time and money needed for international expansion in order to determine if it’s truly the right move for your organization
Doing business in a new market means navigating differences in employment regulations, as well as cultural norms. Making sure you have the right human resources processes and procedures in place is crucial for your success
Choosing the right markets is key for maximizing the benefits of global expansion. Consider which international markets offer the greatest potential for new customers and revenue, where your company already has some traction in the marketplace, and how difficult it will be to adapt your current offerings to fit local needs
Legislative and regulatory compliance
Laws vary widely from one country to the next, so it’s important to understand the regulatory environment in each new market you’re considering entering and to evaluate whether doing business in that market makes sense given local regulations
Local culture, trends, and norms
Business is shaped by culture and customs as much as it is by local laws. For your global expansion to succeed, you’ll need to consider how your organization can do business in overseas markets in a way that feels culturally relevant to local customers
6 key benefits of international business
If your company decides to invest in global expansion, here are some of the benefits you can expect:
When your company expands internationally, you increase the market for your offerings and can boost production, which allows you to enjoy even greater economies of scale. Access to new labor markets, resources, and technologies can also help you increase efficiency and lower costs
3. Leverage financial incentives for entering new foreign markets
Expanding into overseas markets increases opportunities for foreign investment in your business, which brings with it a wide range of benefits, including spurring innovation, opening up access to new technologies and business models, and increasing connections to global supply chains
Additionally, diversifying your markets and customer base helps to create greater stability for your business. If there is an economic downturn or some other unforeseen circumstances that disrupt sales and revenues in one of your markets, you have other markets that can help to balance your company’s finances
5. Increase consumer trust within overseas markets
Globalization can give your company an edge over competitors in a number of different ways. If you expand into a market where your competitors don’t do business, for example, you’ll likely gain a first-mover advantage.
Moving into overseas markets expands your options for potential suppliers, increasing competition for your business, which can lower costs and ultimately improve the quality of your products.
Likewise, globalization also gives you a larger talent pool, increases your access to new technologies, and lowers production costs—all of which enable your company to offer high-quality products or services at a lower price for your customers
Challenges of global expansion and international business
Naturally, there will be some hurdles your business will face as you expand internationally. Here are some potential challenges to be aware of:
As your business expands internationally, you’ll encounter vastly different legal environments from one market to the next, affecting everything from governance to hiring to financial reporting. Staying on top of changing regulations is crucial for your global success
Significant costs for both expansion, and termination in the case of failure
While expanding your business internationally does offer important advantages, there are also significant costs associated with it. If you’re establishing a foreign subsidiary or legal entity, which many businesses do in order to comply with local regulations, you’ll need to budget for the initial setup and for annual maintenance fees.
Other costs you’ll need to take into account include: real estate, taxes, transportation, and labor, which may have stricter protections for workers that raise costs, depending on the market. If your expansion effort doesn’t successfully meet your business goals and you ultimately decide to leave the market, termination costs can also be significant
Managing employees on a global scale
While globalization opens up new opportunities, it can also create additional complexity for your organization. Managing a workforce that’s spread across countries and time zones can certainly pose a challenge.
A professional translation and localization partner is key for your global success
Globalization offers a wide range of advantages for your business—everything from expanding your talent pool to lowering costs to building new customer bases. However, there are challenges to navigate on the way to global success.
At Acclaro, we partner with your company during every step of your international expansion. We can help you determine your globalization strategy and develop a translation and localization program that’s specifically designed to meet—and even exceed—your goals.
Contact us today to learn how we can help your business open up new opportunities around the world.