Should you Make Your Business International?

Fri, Sep 24, 2010

General Management

We live in an increasingly globalized world. It is easy to point to a company that was once domestic and entered the international market and found success. The question now is what are some of the reasons that a company may want to go international?

Here are some reasons for going international:

  • The company could be experiencing difficulties in the domestic market due to an overcrowded market or intense competition from similar products or services.
  • The company is looking for ways to add to revenue sources and be less dependent on domestic markets.
  • Many companies who never considered going international are now forced to look for new opportunities abroad because their competition is doing the same.
  • Some companies decide to enter new markets internationally partially because of the lower cost of operation and raw materials in other countries.

Before any company goes international there are some things to consider:

  • The company should perform a SWOT analysis on its business and product or service. The company can then use the results to decide if it is in a position to go abroad.
  • Another thing to consider is if the company has the commitment of the entire company. It is important to ensure that everyone is on board because going global can be a stressful time in the growth of a company.
  • The company should have a solid, well thought out plan for a least a couple of years. The plan should consist of budget requirements, information about doing business in the country of choice, cultural/political/legal issues that could affect business, etc.
  • The company should have sufficient capital to sustain operations until sales are generated. This could mean a couple of years.
  • Find out if there are entry barriers to the product or service in the country of choice. Some countries practice protectionism on certain products to protect their own domestic market.
  • The company should consider a partner in the international market. It can be very difficult to enter a country’s market alone without the help or guidance of a company that understands it better.

Any company that has tried and failed will probably say that the decision to go international is never one that should be taken lightly. It should only be made after careful analysis and research.

By Sara Beck. Sara is an MBA student and loves to travel. She blogs at www.sarabeck.wordpress.com.

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