10 reasons to expand your business internationally
Businesses looking for growth are often faced with two choices:
- Develop new products or services to gain more traction in your existing home market, or
- Sell your existing products or services in other markets.
Developing innovative new products and services can be an expensive and high-risk strategy. International expansion is not without its risks but by comparison to the first option, can be an easier path to growth for your business.
Here are ten reasons to expand your business internationally, beyond additional revenue:
1) Decreased competition: Your home market might be highly competitive or have reached saturation point. You might find that by branching out overseas, you are able to compete in less saturated markets – gaining competitive advantage.
2) Risk mitigation: By operating in different markets, you spread risk. Economic lows in some markets or regions might be offset by economic highs in others.
3) Smoothing seasonal peaks: Seasonality may vary across regions – most obviously, the seasons are inverse in the southern hemisphere compared to the northern – which means peaks and troughs will be different, spreading demand on resources in your business over the year.
4) Enhanced reputation: Operating internationally will increase your global stature and raise your company profile. Global operations can help build name brand recognition to support future business scenarios, such as contract negotiations, new marketing campaigns and additional expansion.
5) Opportunities to specialise: Being exposed to the challenges and opportunities of other markets may lead to product or service innovation, helping you to develop your company niche and evolve your operations.
6) Benefitting from currency exchange: When the pound is down, you may be able to export or sell more as foreign customers benefit from a favourable exchange rate. You can also benefit from currency conversion. If you do business in India and the rupee is strong against the pound, you will feel the benefit when you convert your profits. You can also spread the risk of relying on one currency.
7) Disposal of surplus goods: The opportunity to sell goods in other markets which you might not have sold in your home market.
8) Access to new talent: Adding local employees or expertise in new markets brings a new dimension to your company’s talent pool. In many cases, international labour can offer business advantage in terms of advanced language skills, diverse educational backgrounds and a variety of perspectives, as well as local efficiencies.
9) Competitive advantage: Depending on your sector and target market, you may obtain first mover advantage which allows you to build strong brand awareness with consumers before your competitors. Failing that, international expansion can give you advantage over certain home competitors.
10) Larger margins: The cost of acquiring customers in other markets may be lower. And the greater economies of scale you acquire by scaling internationally can generate cost efficiencies too.
Oban can help
International expansion not only allows you tap into a global marketplace of over 7 billion consumers, but numerous studies show that businesses which operate internationally grow faster and fail less than those which don’t.
However, expanding into other countries comes with significant challenges. Catering to an international customer base and creating multicultural and multilingual brand awareness across borders adds complexity to most aspects of doing business. Using our unique LIME (Local In-Market Expert) network, Oban can help you identify the biggest international opportunities and avoid the costliest mistakes – find out how by getting in touch.
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This is an edited extract from Oban’s book Going Global: How to improve digital marketing performance in any market on the planet. Stay tuned for further details.
Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.