Business and Marketing / Business Essay

How to grow your business internationally

Developing sales, increasing brand awareness, positioning yourself in a market, there are many motivations for choosing international development. However, this does not happen without preparation. Here are some tips for conquering new markets while minimizing the risks. Here’s how to grow your business internationally!

HOW TO GO INTERNATIONAL

Like any strategy, one of the key things to consider above all else is the viability of internationalization for your business. If you are offering a product or service that might interest a customer outside of Europe and America, then internationalization is a logical step in your development strategy. For example, a regional brand is not necessarily adapted to internationalization; the interest is limited to internationally distribute a product associated specifically with a region of a country.

In some rare cases, there is also the question of the legality of a product in another country that may arise, but this type of problem is confined to certain very specific sectors, such as the production/distribution of additives (for example). For example, what is authorized in America is not necessarily authorized in Europe and vice versa).

Second strategic element: know the market you are targeting. Forget everything you know about American customers; this data will be of little use to you abroad. For those who have forgotten, every culture in every country is different; the same is obviously true of buying and selling trends. A distribution strategy that works perfectly in one country can fail miserably in another, or even damage your company's reputation in the worst-case scenario.

The third step of the internationalization process: how to get started? Do you rather want to export you're made in France production to other countries, as many companies do on the international road? Or do you rather have in mind the idea of producing in another country?

The export/production question is one of the most important questions to ask yourself insofar as the answer will logically influence the rest of your strategy, such as, for example, the service providers you will call on, etc.

The fourth point: are you going to try international development on your own, or partner with companies already present in the target country (ies)? You can decide (if a company already has similarities with your activity) to partner with the latter to export/produce in this country.

Finally, you have one last question to ask yourself in the reflection stage: what type of international company will you become? There are four of them: 

- International business: a business becomes international as soon as it develops its activity in a country other than its own;

- the multinational enterprise: as its name suggests, the multinational is established in several different countries; each subsidiary of the company present in these countries has a certain degree of autonomy and manages most aspects of the company according to the standards of the country in question;

- the transnational company: the transnational company operates in several countries, but also integrates into its strategy elements of outsourcing, optimization of salary costs, tax advantages (to give you an example of the latter, Google which has established its European HQ in Europe in Dublin, Ireland);

- In a way, the global company is the last stage of a company on the road to internationalization. The market for this company is the whole world; its production is homogeneous and standardized throughout the world.

Study the target country well

Before choosing a target country to develop its international activity, the company has every interest in preparing the ground. Even if a country seems close in terms of language, culture, or geography, knowledge of a new market remains a prerequisite for setting up abroad. It is necessary to evaluate the potential, the distribution methods, the expectations, and the degree of maturity. Another necessary step: to learn about all the constraints (economic, political, and social) of the target countries. Secondly, the business manager can go to the country to assess the possibilities of organizing the new activity, or even start building a network,

Define the product offer

The product works well in France, but can it be exported as-is abroad? First of all, we must ask ourselves about the product's added value: is it greater than a product manufactured locally? Is the product innovative? Differentiating? On the other hand, the product likely to be exported may need adaptations to match market expectations. In any case, thinking local and thinking about the customer is an essential step: once the offer has been defined, all that remains is to decline the sales brochure in the language of the country, or at least in English, and adapt to the interlocutors to present the strengths of the product, according to their way of thinking, which can be very different from that of the entrepreneur.

Increase the size of its market

Going international allows you to conquer new markets. This can be interesting when the market in which your company is established saturates or shrinks, for example, and the competitive game causes the prices of services to melt through the effect of supply and demand.

 According to the reports, companies present on an international scale perform better than companies that remain sectorized on the market.

 The obvious idea of ​​such an operation is obviously to increase its turnover. And some countries are sometimes more attractive than others for this. For example, Germany can entice by its number of inhabitants higher than France and by its higher GDP.

Set up an effective marketing organization

Do we need centralized or decentralized marketing? The question necessarily arises when a company is present internationally. Between global brand consistency and local adaptations, the compromise is sometimes hard to find. Hence the need to have defined upstream processes making it possible to frame things! There are many organizational methods used by brands. There are three major models, which you can take inspiration from:

Imperial centralization

The same marketing policy is applied everywhere, and decisions are made (most often) at headquarters. We lose relevance locally, but we gain in productivity and fluidity. This model is particularly suitable if the markets you are targeting do not have major cultural differences.

The “think global, act local” model

The marketing strategy's broad lines are defined globally, but local adaptations are possible and even encouraged. It's an interesting model on paper but difficult to set up because marketing directors sometimes find themselves in difficult positions. On the one hand, they are asked to adapt the company's marketing strategy to their territory, and on the other hand, not to stray too far from the set guidelines. It's not always easy to find the right balance!

Decentralization

Decisions are made mainly at the local level, which allows for great customization. However, a central authority is responsible for maintaining brand consistency so that its identity is not too fragmented.

The choice is not easy, and each model has its advantages and disadvantages! Do not hesitate to dig into the question. In addition, you will undoubtedly need to surround yourself with international profiles for the success of your development. 

Protect yourself against the risk of non-payment

Once the activity has started, it is important to look into preventing customer risk. To limit unpaid debts or even get rid of them completely, payment when ordering or requesting a deposit (the amount is then to be determined according to the risk). In particular, for export, it is particularly recommended—a requirement which nevertheless remains often difficult to obtain from its customers. The exporting company can then resort to a documentary credit, which is a document proving a payment commitment taken out by the bank of a buyer vis-à-vis the seller. The bank undertakes by this document to pay the seller, on behalf of the buyer, if the seller provides the documents in accordance with the conditions set out in the documentary credit. However, this solution does not protect against order abandonment. The irrevocable documentary credit, although more expensive, for its part, ensures the successful completion and settlement of a commercial contract between an exporter and an importer of different nationalities. The two trading partners' banks guarantee their respective customers, which limits the risk of unpaid deliveries, or of goods paid for but not delivered. The commitment is made by the bank, which issues the documentary credit and which, against documentsHow to grow your business internationally, ensures the successful completion of the customer's payment.

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