International development is one of the top priorities for many companies today, to adapt to the globalization phenomenon. Whether through E-Commerce or by setting up in foreign countries, international strategies are developing and are no longer exclusively reserved to large groups. Indeed, globalization and the development of online sales offer new opportunities for SMEs and entrepreneurial companies to diversify their market. However, according to a study by HSBC France, only 10% of companies that want to embark on the international adventure believe they have sufficient knowledge of the foreign market. So, although at first glance, the international market seems to be a source for many opportunities for companies, what are the real advantages of an international development and how to succeed in the transition to foreign markets?
Why develop its business internationally?
- Growth : it has been observed that companies increase both their turnover but also their profits because they simply sell more.
- Increased competitiveness : by invading another market, the company indeed benefits from a bigger number of potential clients but the level of competition arises with it. Therefore, the challenge is to optimize the company’s processes in order to propose goods and services at a better price and simultaneously, to be able to guarantee their quality. The priority is to reduce the costs and to promote innovation.
- Risk diversification : it is reassuring not to depend on only one market because if a crisis arises, you might lose it all.
- Enhanced brand image : by being present on a few markets, a company gets greater international recognition and therefore, brand awareness. It is reassuring for consumers to see an international brand because it inspires trust in the quality of the goods. In the context of SMEs or entrepreneurs, the visibility notion is necessary to continue to develop.
- New opportunities : the emerging markets’ growth means an increasing demand which is an ideal implantation factor for a company.
Some ways to develop internationally
- the market
- the already existing offers or competitors
- the existing constraints in the country through a PESTEL analysis
- Company’s structure : the business organization and the location of the teams
- Foreign laws and regulations : trading & employment laws, health, security & environmental standards…
- International accounting : tax implications
- Cost calculation : it therefore aims to establish the pricing strategy
- Security : guarantee trustworthy international payment methods
- Currency fluctuations : in order to avoid any mistakes or problems, it is recommended to pay your employees and suppliers in the same currency that the one you sell your goods in
- Communication difficulties and cultural differences
- Political risks
- Supply chain management : in order to avoid workforce exploitation
- Environmental issues
Junior-Enterprises have today the skills to accompany internationalization and the development of international visibility.