Companies also choose international expansion to gain a competitive edge over their opponents. For example, businesses that expand in markets where their competitors do not operate often have a first-mover advantage, which allows for them to build strong brand awareness with consumers before their competitors. International expansion can also help companies acquire access to new technologies and industry ecosystems, which may significantly improve their operations.
For instance, many firms are able to develop new resources and forge important connections by operating in global markets.
Companies with multinational operations can also benefit from lucrative investment opportunities that may not exist in their home country. For example, many governments around the world offer incentives for companies looking to invest in their region. It just makes good business sense to move to another country with a much lower tax rate. The United States, in comparison, now has a 21 percent corporate tax rate, down from 35 percent previously. When you move your business to a country with more relaxed regulations, you are in a better position to be innovative, grow and take risks — more so than you might feel comfortable at home.
Economies that allow companies to operate with minimal interference are attractive to all kinds of businesses. As such, you may be able to avoid things like price-fixing rules or anti-competition and labor laws. Moving internationally puts you in a position of increasing your prestige as a trusted brand globally.
Going the extra mile to increase your reach and showing your customers that care about their needs, cultures, etc.
Think about globally popular brands now and how much more exposure they get. Because they are so big, they are seen as trustworthy entities. By expanding, you will be better able to produce more units. Generally, the more units you put out, the lower your cost per-unit. Expansion into other countries provides a vastly greater opportunity from a standpoint of volume and allows you to get in front of a much larger audience.
Be willing to change direction and adjust your customer support. Are you ready for international expansion? What are the challenges of international business? Language and cultural differences Taki Skouras, co-founder and CEO of international wireless accessories retailer Cellairis, suggests hiring bilingual staff members who can translate for your company.
Find the right partners and team. Have the right infrastructure. These are some questions she said you should have answered beforehand: Do you have a management team that can deliver your strategy from a satellite office? Have you decided which business decisions can be made on a local level and which need to be made centrally?
Do you have the capabilities to set up IT and telephone systems? How will employees share data securely, and does the data you're capturing follow the law and best practices? Consider the impact of any new ideas. Always do your due diligence. Be willing to change direction. Alter your customer support. Business News Daily Staff. Chad Brooks is a writer and editor with more than 20 years of media of experience. He has been with Business News Daily and business.
Chad spearheads coverage of small business communication services, including business phone systems, video conferencing services and conference call solutions. Lead Your Team. Updated Business owners and experts told us their predictions for small Pros and Cons of Outsourcing Customer Service to an This guide describes the pros and cons of outsourcing customer You may have a local bank that has helped your company through early growth, but operating in multiple countries involves a lot of activity within and across borders, often at hours when you prefer to be sleeping.
Some of the largest U. Know your taxes. You will need to be aware of what national and local taxes apply to your business, from both a filing and a payment perspective. Registering local operations in overseas markets may lead to local corporate income tax requirements.
Get local support. In many countries, there are national and local government-supported economic development agencies, offering aid and support, which can range from substantial financial support for a manufacturing facility, to small items like a pair of tickets to the local opera.
Often, different agencies within a single country will compete with each other to persuade a company to locate in their territory, just like when these agencies persuade you to locate in their country. This is not only a financial benefit; officials at these agencies can bring a lot of local intelligence that can help you build your business, staff smarter, and find valuable local contacts.
Understand local employment practices. Employment terms are different in every country. For example, the U. Making the effort, up front, to understand the challenges and find the best solutions for international expansion will save your company precious time and money later.
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