- 16th April 2018
- Posted by: Manolis
Small businesses as well as large corporations can reap the benefits of expanding operations into overseas markets. As with any new venture, the overseas expansion process does take time and requires careful planning. You also will need to pay particular attention to cultural differences that may require you to alter your normal business processes.
Your business may offer products or services that are unavailable in certain parts of the world but are in high demand. By expanding your operation into these markets, you can establish a new base of eager customers without the immediate threat of competition. The nation’s government may sweeten the pot by offering certain incentives for setting up a business operation, as you’ll provide a boost to its economy and possibly create badly needed jobs.
Favorable Business Climate
A new country may offer more favorable economic conditions than the home country. When recession or the implementation of restrictive government polices make turning a profit more difficult, expanding into an area that doesn’t currently pose these challenges can offer a more lucrative alternative. A new nation may offer an economic climate that is more “business-friendly,” offering advantages such as lower taxation or fewer environmental regulations. Workers in other parts of the world are sometimes willing to work for lower wages than those in the United States, which reduces your labor costs.
Overseas expansion increases the exposure to your business, helping you create what Kevin McKervey, who operates the international arm of certified public accounting firm Clayton & McKervey, calls a larger “global footprint.” As a result, you’ll gain greater brand recognition throughout the world. This can facilitate even more expansion in the future. You also can attain greater respect from customers and potential business partners in the domestic market, as they may now view you as a bigger player in your industry.
In addition to expanding a thriving business, entering overseas markets can help revive a struggling enterprise. Businesses operating in a saturated market or experiencing a shrinking market share can find new outlets for their products and services in another country. Those depending on certain resources that are in short supply in the home country may be able to find what is needed overseas.