Sommaire
2- Benefits of a Robust International Business Strategy
3- International Strategy Examples
4- Choosing the right location
5- Checklist for International Expansion
Developing a sound international strategic approach focusing on growing export sales and footprint in foreign markets can be a game-changer for any business expanding globally. An international business strategy refers to the plan you will put together to grow your international sales and/or footprint. This international strategy you'll implement to expand internationally is essentially an extension of the company's core values and practices, tailored to meet global integration needs and local demands.
A successful international business strategy prioritizes exceptional customer service and carefully selects market entry strategies that are most likely to succeed. An export sales and international expansion strategy can be a stepping stone for companies looking to expand their reach across international borders.
This article aims to be the condensed ultimate guide to building an international business strategy: from a humble exporting strategy for newcomers to a plan that will help you expand globally. Below, we're covering the significant aspects that will transform your small and mid-size firm into a global company, joining the club of the large multinational corporations of this world.
The Blueprint for International Business Strategy Development
Creating a blueprint for international business strategy development involves focusing on target markets where the company's offerings can be competitive. This foundational step ensures that the strategy effectively balances global integration and local responsiveness.
The essence of crafting such a strategy lies in understanding that it's essentially an extension of the company's domestic operations, albeit with an increased focus on adapting products and services to meet the unique demands of each market.
It's important to remember that global brands implement global strategies, but each market has specificities, and customers' demands aren't uniform across countries. Global businesses know how to implement an international strategy while they adjust to local preferences to attract new potential customers.
Setting the Stage: Goals and Objectives of a Global Strategy
Setting clear goals and objectives is crucial before diving into international waters. These serve as the compass guiding all strategic decisions and actions. Whether aiming to increase market share, enhance brand recognition, or achieve specific financial targets, having well-defined goals ensures that the strategy is aligned with the company's overall vision. It also helps measure success and make necessary adjustments along the way.
Expanding your business internationally can increase the flux of information, work, and demands your newly global company will receive. Having a clear international plan that you will follow will help you decide what your next action or next expansion market will be. You need to plan to scale your business. For example, an export-driven strategy (without expanding your footprint of offices or factories) will consider international transportation costs into the margin to define where it makes sense to export to.
International businesses do not always have the same goals:
- Some prefer to sell volumes.
- Some prefer to focus on margin.
- Some need brand recognition worldwide.
Gather your strategic management team and brainstorm what would best suit your company. There is not one international business model but many. Thus, defining yours is crucial.
Identifying Your Unique Product or Service Offering for a Transnational Strategy
Standing out in a crowded global marketplace requires a unique product or service offering. This uniqueness could stem from innovation, quality, design, or even the customer experience. Identifying what sets the company apart is the first step in crafting a compelling value proposition that resonates with international customers. It's about leveraging the company's strengths to meet the needs and preferences of diverse markets around the world.
Overseas expansion often means you have chances to be the underdog in many global markets you aim to enter. Expanding globally requires you to decide and refine what's making you a unique manufacturer or service provider and what makes you different.
Potential customers prefer to buy from companies closer to where they are. They think they'll benefit from better customer service or can contact or sue the company more quickly. So, how can you make your product or service so unique that potential customers won't look at this objection?
Market Research Mastery: Selecting Your International Arena
Choosing the right markets is pivotal for successful international expansion. This decision should be backed by thorough market research, which includes analyzing market size, growth potential, competition, and customer behavior.
It's a fact that you can't expand globally all at once. Global businesses often choose a few countries each year that are a priority to enter or grow existing sales in. You will have to select a few target markets (based on facts and research) and ensure you have a strategy you'll implement to make them successful. For the other markets, it's often best to maintain sales or, if they're new, to put them on the back burner until they become the next priority, not to waste valuable resources.
A solid localization strategy also plays a crucial role for a global company. It ensures that products and services are adapted to meet the cultural and linguistic preferences of the target market. Such meticulous market research lays the groundwork for making informed decisions about where and how to compete in a given market.
For example, suppose you're a food and beverage company that wants to enter the United Kingdom market. In that case, you'll have to study the taste of British people to adapt your recipes; you'll probably have to change your marketing and packaging to conform to the laws and perception of the English market. If you have not done market studies on target markets before expanding internationally, you may aim for failure in some markets.
Crafting Your Entry: Distribution and Organizational Structure Design
Entering global markets requires a well-thought-out approach to distribution and organizational design. The chosen entry method—whether direct exporting, joint ventures, franchising, or setting up a subsidiary or factory—should align with the company's goals and the characteristics of the target market.
Indeed, international businesses can use various strategies to expand internationally:
- Direct export sales to customers: often considered the simplest international business model. However, it requires strategic organization (logistics, customs, marketing to multiple markets, etc.)
- Import and distribution network: selling to distributors in foreign countries or regions in some countries who will resell to local customers.
- Joint Venture and co-manufacturing: setting up a partnership with a foreign company.
- Franchising: duplicating your success story by having a franchisee replicate your international business model locally.
- Setting up a subsidiary or factory: opening and maintaining a head office or offices dedicated to sales and marketing. A local office increases responsiveness to local requirements: your local team is close to your customers.
- Mergers and acquisitions: strategy with some of the biggest challenges and the quickest rewards. Negotiating the acquisition of a foreign company with the strategic management team requires high negotiation skills.
Equally important is designing an organizational structure that supports effective decision-making and operations across different geographies. This structure must facilitate coordination and integration across the company's global operations while allowing local market responsiveness.
The more you expand your footprint globally, the better your flow of information and decision-making should become. You don't want to become one of these multinational corporations that don't listen to customers and are slow in making well-needed changes.
Navigating the Benefits of a Robust International Business Strategy
A robust international strategy unlocks numerous benefits, from enhancing competitive advantage to achieving economies of scale. Global businesses know that successful global strategies significantly impact their domestic structure and business.
Achieving Competitive Advantage on a Global Scale
Gaining a competitive edge in the global marketplace is a direct outcome of a well-executed international strategy. By leveraging unique products or services, companies can differentiate themselves from competitors. This advantage enables them to capture significant market share, attract new customers, and build a solid international presence.
Your best-selling products or services, which are sold more often and confronted with more customers, will be refined and improved over time. Your supply chain management will also be improved: aim for more straightforward and quicker sales, production, and delivery processes.
Economies of Scale: Maximizing Development and Production
Expanding internationally can lead to economies of scale, particularly in producing goods. Companies can lower production costs by spreading them over a larger output as they grow. This improves efficiency and allows for competitive pricing in foreign markets, enhancing the company's overall profitability. As a result, their center of operations grows in production outcome and profitability.
The fact that you are also exporting or importing goods or services at a larger scale should help you reduce your costs in many other aspects than just production.
The Path to Global Brand Recognition and Customer Satisfaction
Achieving global brand recognition is a powerful testament to a company's success in the international arena. It involves consistently meeting or exceeding customer expectations across various markets, leading to high levels of customer satisfaction. This recognition builds trust and loyalty, essential for long-term success in the global marketplace. This is also how global brands are recognized and benefit from a marketing competitive advantage.
Innovation and Economic Stability: The Dual Pillars
Innovation and economic stability are the dual pillars of a robust international business strategy. Continuous innovation ensures the company remains competitive, while financial stability provides the resilience needed to weather market fluctuations and challenges. Together, they support sustainable growth and expansion across international borders.
By selling in multiple countries or regions of the world, you will split the risks across geographic areas that have different dynamics over time. It builds resilience for your global business. If you can also sell to multiple markets (meaning here segments, like food, pharmaceutical, or manufacturing), you can split the risks even more.
Real-World Applications: 3 International Strategy Examples
Let's explore how different companies have succeeded on the international stage. Below are some examples of companies.
McDonald's: Cooking Global Success
McDonald's expansion strategy showcases how understanding mixing local cultures and preferences with a uniform and standardized approach can lead to global success. By offering products tailored to local markets while providing a store ambiance and customer service that is mainly unified to be recognized globally, McDonald's has built a global brand synonymous with well-known fast food products and fast customer experiences.
Its recipes are adapted by markets, and sometimes some recipes are availble just for some countries, while you can still find core menu items around the world. The company knew how to adapt to global markets and how to keep unique competitive advantages at the same time.
Rolex: Timeless Precision in International Expansion
Rolex's international expansion strategy emphasizes the brand's commitment to quality and precision. By maintaining a consistent organizational structure and focusing on its core values, Rolex has achieved timeless recognition and prestige worldwide, making it a leader in the luxury watch market.
The group focuses on a single principle: the ultimate quality from a single manufacturing country of origin. It has exported its image globally to be recognized as one of the best watch brands in the world.
Philips: Glowing on the International Stage
Philips leverages its expansion strategy to innovate and meet diverse customer needs worldwide. By expanding its business into new territories, Philips has become a leading brand in electronics, healthcare, and lighting, showcasing the power of strategic business expansion and adaptation.
Philips has achieved a high level of supply chain management. Their strategy involves penetrating multiple markets and locating many factories across the globe to serve clients locally.
Leveraging Localization for International Strategy Success
To thrive in the global market, international businesses must align their strategy ranks with their target markets' cultural and regulatory landscapes. This alignment, known as localization, goes beyond mere translation to adapt products, services, and marketing messages to local tastes and norms. By making localization the centerpiece of their international expansion, companies can create a competitive edge that resonates deeply with local consumers, setting the stage for sustainable success.
Our advice: professionally translate and localize your marketing and packaging. We have seen numerous errors in automatic translations from our clients. They did not adapt (understand: localize) their message to their audience, and their potential customers thought their message was a little bit odd. We can't stress enough that localization and translation by professionals are crucial.
The regulatory environment is a crucial element of global strategies. It can make or break an expansion strategy and a market entry. If you want to export and have your products or services cross international borders, you must ensure they comply with the local laws and regulations. Some products (especially food and pharmaceutical products) are regulated and require a specific certification or packaging adaptation. Before expanding globally, it is worth checking the entry barriers of the target markets: you'll save time and money.
Research and Cultural Integration: The Foundation of Localization
Before entering a new market, companies must conduct comprehensive research on local culture, consumer behavior, and legal requirements. This groundwork helps identify the unique aspects of the market, enabling businesses to integrate these insights into their localization strategy.
Cultural integration, in particular, plays a pivotal role in ensuring that products, services, and marketing messages are relevant and appealing to local audiences. It's a process that demands attention to detail and a deep understanding of the target market's values and preferences.
Global Expansion: Marketing Strategies and Community Engagement
In today's digital age, leveraging multi-platform marketing strategies has become essential for engaging international customers. Multinational companies have understood that their global strategies require a global approach to marketing.
Businesses can effectively communicate with a wide range of audiences by tailoring content across various digital platforms to match local tastes and preferences. Additionally, fostering community engagement through local events, social media interactions, and customer service in the local language can significantly enhance brand loyalty and customer satisfaction, contributing to the success of the international strategy.
The Ultimate Checklist for International Expansion
International expansion demands a meticulous approach, from initial planning to final execution. The journey involves setting clear goals, understanding the target market, and crafting a tailored expansion strategy.
Critical steps include:
- Selecting the right local partners or strategies to implement.
- Navigating legal and regulatory hurdles.
- Establishing a solid local presence, whether through market shares or footprint.
Companies must also prioritize cultural sensitivity and local customer needs to ensure smooth entry and sustained growth in the new market.
From Global Strategy Goals to Execution: A Step-by-Step Approach
Setting clear, achievable goals is the first step towards successful international expansion. These goals should guide the development of a comprehensive strategy that covers market research, entry modes, marketing, and logistics.
Execution then involves meticulously implementing this strategy, constantly monitoring progress, and adjusting plans to address challenges and seize opportunities. Focusing on long-term objectives while navigating the complexities of new markets is vital to achieving international success.
In our opinion, here's a good step-by-step approach to global strategies:
- Set your company goals, and select one or just a few coherent: sales volumes, better margins, becoming closer to customers, reducing costs, fostering innovation...
- Do effective market research on market-entry and market needs
- Select a strategy that fits the market needs: is it an exporting strategy? Or do you need to expand globally with offices?
- Implement the strategy, if necessary, with the help of professional companies.
- Track results and improve your strategy to achieve your goals.
Simplifying Expansion with Technology and Corporate Services
Technology plays an increasing role in simplifying international expansion. Utilizing digital tools for market analysis, customer engagement, and operational efficiency can streamline the entry process.
Moreover, expanding your business internationally can be done by partnering with companies that provide business development services, reducing the complexity of finding sales channels for your products/services or setting up local operations in a new global economy.
These services allow businesses to quickly become global companies, ensuring their exporting strategy is achieved most efficiently and that the business expansion into a new market runs smoothly.
At Masson International, we provide services to help you grow your business in Europe. We grow your sales and footprint via many services, such as distributor searches, business development, and corporate services.
Speed to Market and Innovation: The Competitive Leverage
Speed to market and continuous innovation are vital for gaining a competitive advantage in international markets. Companies that rapidly adapt their products and services to meet local needs while introducing new and innovative solutions can outpace competitors and capture significant market share.
Emphasizing agility and responsiveness to local trends and preferences will drive growth and solidify a company's presence on the global stage. We've seen examples of international companies that have taken international markets by storm with a new innovative product or service that was quickly implemented.
International businesses with a solid center of operations and effective sales offices (or distributors worldwide) can achieve a better return on investment in innovation when they simultaneously promote the same product or service to many markets.
Final Insights: Mastering International Business Strategies
Mastering international business strategy requires carefully balancing global efficiency and local responsiveness. Successful international businesses understand the importance of adapting their strategy to meet the unique demands of each market.
By doing so, they can achieve a competitive advantage, expand their international presence, and contribute to the global economy. Embracing cultural diversity, complying with local laws and regulations, and leveraging local insights for innovation are pivotal in navigating the complexities of doing business abroad.
Developing a Localization Strategy with a Global Vision
Developing a localization strategy with a global vision involves tailoring products and marketing efforts to meet local needs while maintaining the brand's core values and identity. This strategy, which contrasts a multi-domestic approach, requires minor modifications to products and services to ensure responsiveness to local requirements.
For example, global companies like McDonald's and KFC adapt their core menu items to align with local tastes while relying on their globally recognized brand names, demonstrating the effectiveness of this approach in expanding internationally.
In this article, we've seen other examples of international companies that have not used the same global strategies as KFC or McDonald's but are still enormous success stories. A component we've seen in many strategies is the successful localization and translation of marketing and promotion. Products, services, and marketing tailored to local markets are always the most successful.
Ensuring Brand Consistency Across Borders
Ensuring brand consistency across borders is crucial for multinational companies aiming to maintain a robust and cohesive brand image. This involves standardizing core brand elements while allowing for adaptations that reflect local cultures and preferences.
By keeping this balance, companies can build a loyal international customer base that trusts and values the brand, regardless of geographic location.
The Journey to Global Expansion: Challenges, Opportunities, and Strategic Moves
Taking your business to the next level in global markets isn't easy. The journey to global expansion is fraught with challenges, including navigating diverse legal and regulatory landscapes, understanding local consumer behavior, and managing complex supply chains.
However, it also presents immense opportunities for growth, innovation, and access to new markets. Strategic moves like forming local partnerships, conducting thorough market research, and developing a flexible business model can help companies overcome these challenges and succeed in the global marketplace.
If you would like to expand your market into France, Switzerland, or Belgium, we can help. Masson International provides business development and corporate services to international companies interested in growing their business in Europe. Please review our services and contact us to schedule a consultation.
