Today, we live in a global village where any company can invest in international business expansion. By establishing operations in other countries, businesses can reap many benefits and gain opportunities to grow and diversify. The trend of businesses going global is not a new thing, but it will certainly not die out any time soon. Yet, despite the many benefits it brings, some companies are afraid to take the risk and spread to a new market. If you’re also among the uncertain ones, here are a few benefits of international business expansion that might push you in the right direction.
Depending on your industry, your company might struggle to find specialized talent in your country, and with expansion, you can access a whole new pool of skilled, educated and loyal workers. Plus, your competition at home might not have access to this talent, so you’ll get an edge over them. You’ll get all the potential of employees with different cultures and different languages, which opens even more doors towards new contacts, new perspectives and new skills. With international hires, your company can easily cross language and etiquette barriers and figure out how to do business in a new cultural climate. All in all, with expansion comes new talent with new skills, new ideas and new strategies that can almost guarantee many opportunities for your future business development.
Diversification of assets is another great reason to take a leap and invest in international expansion. This action can protect your business from various unforeseen events in your original market, so you can easily offset the decrease in sales and production in one market by going steadily in another market. To maintain positive growth, new market access allows you to launch new products and offer a whole new set of services.
Let’s look at some examples of great diversification. Coca Cola is a global operation that’s going strong in almost all markets. However, due to COVID-19 and bar closures, it reported some losses in the States and Europe. However, it managed to maintain good numbers in China and India, which balanced their books. The company also often invests in other brands, thus building a diverse portfolio that makes the brand attractive in all parts of the world. Your company might not be able to diversify like Coca Cola, but definitely don’t hesitate to look up to this giant.
Probably the biggest benefit of growing your company internationally is the new market access. If your company is going strong at home, the only logical move is to try and conquer other markets as well. And in the new market, you can gain access to a whole pool of new customers and increase sales.
For instance, giant companies like Nike, IBM and UPS took their chance and opened up new headquarters in the Netherlands. This way, they gained quick and easy access to almost 200 million European consumers (the Netherlands has an outstanding connection with all European markets). Also, Europe operates in an open-border system, so one can gain access to new products on the European market as well as reach new consumers without any limitations. If there’s an untapped market, your business will make great use of it quickly with expansion.
Better business growth
If your company is looking to grow, then international expansion is the way to go. There’s no faster way for a business to grow than to penetrate overseas markets. Expanding globally gives you access to new revenue which only leads to further expansion and future growth. Going international might bring various complications with compliance and certain cultural barriers that might be hard to overcome, but by hiring local lawyers and local talent, you can jump over these hurdles right away. Foreign markets also carry many investment opportunities. Expansion can bring you closer to foreign investors and your business might be just what they are looking for.
One step ahead of your competition
The key to staying ahead of your competition is to enter a foreign market before they do. The international expansion gives you the visibility that your competition won’t get. Also, if the market at home is oversaturated, you can benefit from entering a market that’s hungry for your products and services and satisfy the customers before someone else gets there. Your competition might follow your lead, but the company that got to the market first will always be remembered that way and gain loyalty from customers that lasts a lifetime.
International financial incentives
Countries that are experiencing transition and development always want to attract foreign companies, and to achieve their goals, they use financial benefits for businesses that decide to open their offices there. For instance, India cut its corporation tax from 30 to 22%, and some countries even offer corporate tax deduction benefits in certain cases. Finding out about these benefits is not easy, because understanding incentives, corporation tax and other regulatory obligations require previous knowledge and experience. However, there are organizations like Global Professional Employer Organization which gives companies in expansion access to experienced professionals with great knowledge about these types of laws, requirements and obligations.
Better brand image
Building a brand with credibility is one of the main goals of most businesses. One way to build trust with your audience is to invest in international business expansion. Establishing mutual loyalty with different people can help towards a successful expansion, future company endeavors and a guarantee that first-time buyers won’t hesitate to give you their business and trust. Buyers love to do business with big companies that have audiences all over the world, which is exactly what you can achieve by going international.
Of course, like any business move, expansion also has its disadvantages. However, with all the benefits of a new market, new investors, new talent, etc. it’s clear to see that expansion is a great move for any company with big plans for the future. Don’t hesitate to take the plunge into the international waters and watch your company grow and become a true iconic brand.