Considering to expand your business internationally? It can be a very difficult and complicated decision. It requires careful consideration of all the advantages and disadvantages of expanding your business globally in order to make the right choice. Here are a few advantages and disadvantages that will help you make the right move:-
Advantages Of Strategic International Business
Reaching out to a New Customer Base
A business owner has a good idea of how his/her business will perform in its home country. But who knows how many new customers are out in the target market, and out of that number, how many can the business reach out to. Taking your business global will expose it to a whole new customer base. The number of available customers will expand dramatically who eventually will show interest towards your products and services.
Spreading the Business Risk
Even if your business is not doing well at one location, you can cover up the losses from another location to relieve some of the pressure. Sometimes, not putting all your eggs in one basket lowers the risk of losing the entire operation. If a firm is completely dependent on one country, it can create significant difficulties.
Access to New Talent
Expanding to an international location will give you access to new, talented and invaluable employees who can take your business to the next level. After all, the success of your company depends on the people you work with. Hiring locals will give you the advantage of knowing the current trends and cultures of the place that will help you in operating according to a global taste and not just based on how they like it in the home country.
Increase in Brand Equity
Expanding your business globally is a very bold move. It can give your business a reputation boost for international growth. Also, your new customers and business partners may perceive your business as an exotic prestige to be associated with.
Disadvantages Of Strategic International Business
Following Foreign Rules & Regulations
The strategic international business expansion brings with it the complexities of new rules and regulations of the target place along with the confusing paperwork because every country has its own taxation and employment laws.
Speaking their Tongue
More than 3/4th of the world population doesn’t speak English as a primary language; so if you intend to expand to one of the many nations that do not speak English, you will need to get a grip on their language in order to communicate with your new customers – a daunting task added to the numerous tasks involved in setting up shop in a foreign land.
Handling the Logistics
Expanding your business globally will lead to complicated logistical efficiency. Shipping from one country to another can take a long time, and what if there is a delay? Every country does not have the same resources and infrastructure, and this may make it difficult for a business to operate in a new and foreign country.
Expanding your business in international markets involves both good opportunities and daunting threats. The opportunities include access to a new customer base, spreading the business risk, increase in brand equity and acquiring new talent. Threats include foreign rules and regulations, logistical issues and speaking a different language. To make this process easier and more familiar, there are strategic international business courses available online. These strategic international business courses provide a better perspective of how to expand your business globally, the pros and cons of operating in a different country, and how to ease the transition of setting up base in a foreign country.