5 Key Considerations for International Expansion
February 29, 2016
According to the 2015 Chase Business Leaders Outlook Survey, which gathers feedback from the CEOs of over 1,000 middle market companies, 28 percent of companies currently have sales from overseas. By 2020, this percentage is expected to reach over 52 percent.
If your business is looking to expand beyond the US, effectively managing your organization’s international growth will depend on your ability to design and implement the appropriate international strategy. To help you do that, here are the top five tactics middle market businesses can utilize to help them expand operations abroad.
- Run the Distance
Going global requires structures and management processes to move nimbly in unfamiliar environments. A keen understanding of global and regional economics is paramount to building a sustainable global business. Additionally, a willingness to quickly respond and adapt to changes in the region is required.
- Develop Strategies for Local Relevance With Global Scale
Deciding how—and how much—to cater to local preferences requires a deep understanding of consumer demographics, preferences and behavior within target segments. Companies can boost their effectiveness by allowing for variability, tailoring their offerings to local nuance and focusing on the expansion approaches for which global consistency is advantageous.
- Do Your Due Diligence
A strategy that works well in a stable and mature market economy such as the UK may not work well in China. Each country must be thoroughly evaluated based on a number of variables, including business environment, people, geography and culture. If your business decides to expand into a new country or territory, determine the proper structure of overseas entities early on and make sure you understand all the risks associated with the establishment.
- Communicate and Coordinate Effectively
It’s important to establish a clear channel of communication between headquarters and local entities early on. As many aspects of global expansions can get complicated quickly, having transparency—as well as clear objectives—can help successfully deliver the positive results.
- Find the Right Partners
Understanding and complying with constantly changing local regulations and requirements can be overwhelming and time-consuming. A small misunderstanding can cause delays, complications and/or unexpected expenses. But finding the right banking, legal and tax partners—those who have the local expertise, as well as the global footprint—is essential to successful international expansion.