Like Simba, do you feel ready to conquer the world? Do you have big dreams of adventure for your business? Do you see yourself flourishing in the international market? You are on the right article… and at the right time!
In fact, thanks to globalization, it is easier to cross national borders, export your activities abroad, expand your population and increase your income.
But before you can set your foot on a new continent, you must define an internationalization strategy. If possible, a strategy that suits your needs and helps you thrive…
let’s go ! We walk you through the techniques to grow your business internationally and achieve your goals.
Submit your project for free on Codeur.com, get 15 quotes and choose the ideal service provider.
find a provider
What is an Internationalization Strategy?
By definition, an internationalization strategy refers to the techniques and methods by which a company sells its goods or services outside its local market. It shows the desire of an organization to expand.
You are setting out to achieve new goals with consumption habits that are often different from those of your local customers. This can prompt a company to optimize its objectives.
This strategy is an ongoing process and requires:
- Analysis of the international market (or market, if you want to conquer many different countries).
- A resource study.
- Definition of SMART objectives (specific, measurable, achievable, realistic, time bound).
- Good understanding of target market dynamics to develop successful offers.
Why Implement an Internationalization Strategy?
International markets offer many growth opportunities for your business. One of the main benefits remains the increase in sales and your income. but that’s not all. Opening outwards allows you to:
1. Take Advantage of New Markets
The first advantage of an internationalization strategy is access to new markets. You create a new customer and reach an untapped audience.
It is also a risk of foreign investment. So you can attract other capital and accelerate the growth of your business.
2. Secure Your Business
You know the expression “don’t put all your eggs in one basket”, right? If your company only sells its services or products in one or two areas, it exposes itself to risks following a natural disaster, change in socio-economic status or other unforeseen circumstances.
With an internationalization strategy, you mitigate these risks and stabilize your income.
3. Achieve Economies of Scale
Internationalization of your activities involves significant investments, it is true, but they allow you to achieve economies of scale.
For example, you don’t need to double your workforce to work in a new market. Your current colleagues will be able to help you adapt current protocols to these new areas.
If you expand your business to areas similar to your current location, you will be able to duplicate marketing campaigns and therefore achieve higher ROI.
International development also makes it possible to produce in large quantities. This reduces the unit cost of the product and increases your margin.
4. Stay Ahead of the Competition
The internalization of your activities gives you access to new customers. If your competitors haven’t conquered these new markets yet, you’re ahead of them!
Expanding your business outside of its territory will increase visibility and therefore the value of your name, logo and brand image.
You also have the opportunity to increase the reach of your intellectual property, trademarks and copyrights.
5. Improve your offers
To find a niche in a new market, you have to meet and celebrate another goal. It involves knowing the needs, consumption habits and expectations of existing consumers.
This exercise will help you identify opportunities to improve your products or services. You may develop new features or even discover unusual uses for your offerings.
These improvements can be tailored to your local customer base, providing another opportunity for growth.
8 Internationalization Strategies You Should Know
Global expansion as a business does not have a one-size-fits-all approach. Depending on your activity and your objectives, you will have a choice between 8 internationalization strategies.
1. Export
Recognized as the most used, this strategy focuses on exporting products and services to overseas markets. You maintain production headquarters in the country or region of origin. This means that you do not need to invest in foreign employees and facilities.
However, this internationalization strategy requires finding serious local distributors to suit your brand image. You also need to manage global logistics and comply with foreign trade rules of different countries.
The export strategy is often followed by small local companies that wish to export resources to foreign markets. Wine is a good example!
It can also be a starting strategy, which allows you to test the reception of your goods or services in new markets. And if you succeed, you can move on to another, more profitable way.
2. MNCs
The strategy of MNCs is aimed at establishing a presence in the overseas market and adapting the products to the local market. You keep the head office in the country of origin and branch out in conquered territories, with dedicated directions.
You shift your marketing strategy to address this new audience. All this, keeping in mind the customs, traditions and cultural characteristics of this market.
These adjustments are often costly and may require taking on financial risk. However, it is also more likely to work.
This internationalization strategy is widely used by companies in the food and beverage sector. For example, Nestle takes a different marketing and commercial approach in each of its markets and adapts its products to local tastes (as well as the names of its brands).
3. Courses Abroad
With a channel strategy, you see the world as one market. This is the best way to achieve economies of scale, increase your notoriety and generate more revenue.
Have a central office in your country, setting up operations centers in overseas markets.
Even if the products and services are homogenized, small changes may be necessary. For example, McDonald’s or Burger King may modify, add or remove certain burgers to meet the needs of local markets.
Export and supply chain strategies may sound similar, but there is a difference: with the first, you maintain a national policy and adapt it to international markets, while the second involves treating each foreign market differently. is (sometimes slightly) products or services.
4. International Strategy
International strategy is a combination of multinational and chain strategies. International companies operate with a central office (in the country of origin) that coordinates local subsidiaries in international markets.
This organizational structure means that there is a single brand and center of operations. It drives overall decision making and supply chain management, enabling economies of scale.
You sell the same product or service (without any modification) in multiple countries, with differences in their marketing by region. An example of a brand using this international strategy is the soft drink, Coca-Cola!
The brand is the same all over the world. The logo, marketing approach, flavor and formula are the same. Only the language on the packaging changes.
5. Getting Business Abroad
Another internationalization strategy is the partial or total acquisition of a company that is already operating abroad. Despite the high cost, this option can help you reduce the risks associated with entering a new country.
You rely on the skills and knowledge of the existing company. On the other hand, if its activity is positive, you reap the benefits of this redemption immediately. This gives you time to understand this new market to develop a growth strategy.
6. License
A license is an international agreement between two or more parties. They agree that the Licensee may, upon payment of royalties, use the Owner’s Resource for a specified period.
In this strategy internationalization is done with the help of a foreign company. You exploit their image to establish yourself in a new market.
The main disadvantage is that the foreign company is not a part of the parent company. So there is a risk that it will become a competitor if the license agreement expires.
7. Franchisee
In franchising (or commercial affiliation), you get an affiliate (franchisee) which you have to pay a fee. The franchisee is authorized to sell your products or services and use your trading system.
Companies choosing franchising as an internationalization strategy must ensure that the affiliate meets its quality, price and advertising standards.
8. Joint Venture
A joint venture is an association between two or more companies with a common purpose for a specified period of time. Partners share capital, management, profit or loss, as well as information.
This internationalization strategy is relevant if you have the support of a partner who already knows the foreign market.
Contact up to 400 clients/month
Register at Codeur.com to be alerted when a customer is looking for a service provider with your skills.
find customer
our suggestion
Do you want to win abroad? Use this list to find an insourcing strategy that meets your needs.
And don’t hesitate to post an ad on Codeur.com to find a freelancer to accompany you on this new adventure!