Why International Expansion Is A Strategically Sound Decision

Many business owners will at some point during the lifecycle of the enterprise consider the pros and cons of expansion into the global marketplace. In this post, we will be taking a closer look at the potential pitfalls of a global presence – and the potential upsides.

Good Research Is The Key To Successful Global Expansion

Successful global expansion is built on a foundation of in-depth research. The market research needs to be carefully considered prior to expansion activities such as the registration of the company in the new market, retention of staff, leasing of premises or investment in fixed assets.

Some Considerations

There are a number of factors that need to be carefully considered prior to take the plunge into a new international market, these include:

Level of Investment

  1. What is the time frame for the establishment of an overseas entity – and just how much will it cost?
  2. What are the complexities involved in compliance, immigration, taxation, and other regulatory requirements?
  3. Who are the preferred service providers who can handle functions such as payroll management and employee relations?
  4. How long would it take to shut down an international operation and what is the process?

Hoping for the best is never a recipe for success when establishing an international operation. Due diligence must be performed – and performed carefully. Look at best case and worse case scenarios and plan accordingly.

What are the Advantages of International Expansion?

The most apparent advantage is access to a new market and increased sales.
That means increased revenue to fund further expansion, including new product lines. Let’s take a closer look at some opportunities provided by international expansion.

New Market Opportunities

Access to new markets is vital to the continued success of the enterprise. Success at home will fund access to those new markets and a new customer base.

Many international opportunities are made even more attractive due to regulations governing open borders. This can make further expansion (for instance in Europe) less challenging.

A Local Workforce

Once the business has reached a certain level of maturity in its home country attracting highly skilled (or specialised) workers can become a challenge. Entering a new global market allows access to a new pool of local talent – with local workers who are intimately familiar with the new market – and that can provide a competitive edge.

Further Growth Opportunities

International expansion can fuel foster ongoing growth. New customers and new audiences for either products or services provide a foundation for further expansion. If you are interested in ‘Global Accounting Network‘ then see here.

Gain a Competitive Advantage

By entering a new market before the competition a business can quickly build a loyal customer base – a competitive advantage that is difficult to overcome. the ‘first mover’ advantage provides the company with a high visibility presence and avoids the pitfalls of continued activity in what might be a saturated market in their home country.

Regional Presence

Going global allows a company to better serve global clients – the company is at the coalface when it comes to customer relations – an advantage that it is difficult to duplicate from afar. The knock-on effect of being in another country servicing international clients directly is that operational costs can be lowered. Local workers who have the contacts, speak the language and are intimately familiar with both social and business customs provide an exceptional return on investment. The advantage of being in the same time zone as the clients should also not be underestimated.