The idea of “going global” has been decades in the works, and popularized by the advent of the internet and the connections it allows. Today, global expansion is table stakes for playing big in your industry.
What is a Global Expansion Strategy?
Defined “as the worldwide movement toward economic, financial, trade, and communications integration,” the concept of going global is bigger than any one company. But that doesn’t mean your business won’t need to develop an international expansion strategy. For smaller organizations, global expansion is a massive endeavor that has the potential to hold other initiatives back. Therefore, significant strategizing is critical to success. We’re going to walk through the main components of a global expansion strategy to get you started and to help you identify if your company has what it takes to go global.
What’s most important to your global expansion strategy?
1. Market research
Of course, you cannot expand into a global market if you don’t understand the various regional markets you plan to enter. But market research goes beyond gaining an understanding of your competition, local trends and your target customers within a region. You also need to deeply consider how your product fits into those markets — if it does at all.
In other words, when you examine a market (by performing a SWOT analysis, a market segmentation analysis, a gap analysis, and defining a timeline for profit), you always need to be considering your product’s readiness for that market. If it doesn’t quite fit today, that doesn’t mean you can’t add features or adjust your product to make more sense within a given market. You just need to know its current level of readiness, so you can adjust if necessary.
2. Goal identification
No expansion plan should even get underway until you’ve clearly identified your goals. You should work toward segmenting into short-term and long-term strategies, so setting goals for each stage of your execution will allow you to measure successes and understand costs at every stage.
Sit down with your expansion team (did we mention you need a team?!) to suss out the details. What is the business model structure? Is it the same as your local model? In what ways does it need to shift? Are you expanding your business while still operating from your current office or are you interested in designing branches around the globe? If the latter, one long-term goal might include the launch of said branch location.
Your goals should be specific, measurable, attainable, relevant and timely. Use numbers. Set dates. Give yourself something very clear to work toward.
3. Financial readiness
Financial readiness is one of the most critical elements of developing a global expansion strategy. What, for instance, would you do if you couldn’t pay your new supply chain provider in their desired currency? How will you verify payments for imports or exports? What about your overall expansion budget? How will that pan out?
And of course, the planning shouldn’t stop when you’ve answered those questions. You need to create the proper infrastructure to ensure you adhere to regional corporate policies, including those that involve tax compliance. Risk management planning, cash repatriation and sales reporting are all major components of your financial readiness.
4. Organizational change management
Going global is huge! You can’t expect your organization to be fully ready just because you’ve developed an overall strategy. In fact, you may need to develop a separate strategy for change management within your company. When you cross regions, you cross cultures and languages. If you are staying in one local office, you can work with your employees to define certain standards for communication that they can use to work best with your global partners.
If you are expanding physically, you’ll experience a whole new set of challenges involving policy implementation. That’s a thorny topic, and it’s best if you consider this aspect of expansion by forming a team experienced in setting up branch offices in international locations.
Getting back to your current organization, you’ll want to evaluate whether or not your current structure will work for your new strategy, and whether you have the proper procedures and policies built that will allow it to do so. Of course, you’ll also want to develop technological integrations that facilitate successful movement from local to global operations, and create a plan for thoroughly training your employees on the use of any new tools.
Much of this process can be outsourced — but even the outsourcing should be part of your plan.
5. Legal considerations
Very often, the legal considerations involved in global expansion are some of the most stressful to address, largely because the risk is great if you leave anything out. Minimizing commercial risks requires adherence to policy and process for your legal team. Additionally, documentation based on the country in which you operate or on the international requirements for supply chain agreements will be a necessity. What documents will you need to receive and send every time you remit a payment or receive a product?
There are a mass of considerations here — everything from customs and shipping to corporate recordkeeping and meeting industry compliance standards. Again, if you have a dedicated legal team, you may be able to keep this planning in house. But outsourcing to a legal team equipped to address global expansion is also an option.
6. International payment solutions
Making and receiving payments internationally has always been an issue for businesses when they expand globally; however, thanks to international payment solutions, these issues are not as prominent as they once were and as such, you should consider integrating them into your expansion strategy. International Payment Solutions such as Currencycloud provide financial services and act as a payment system, meaning moving money around the world becomes straightforward and stress-free.
These solutions ensure that everything necessary to move money from one country to another is covered, including virtual wallets and named accounts. We live in a multi-currency world, meaning if your business wants to expand on a global scale, it has to be prepared for different currencies, and implementing an international payment solution into the way that you work could well be the way forward.
7. Cultural considerations
There are also cultural barriers which could disrupt your expansion strategy if they are not considered. Ignoring the cultural differences that come with working in other countries is risky as it can result in a weak market share and, as such, poor return on investment, damage to your company’s reputation and missed opportunities. The misunderstandings that could potentially come with this difference in cultures, at its worst, can sometimes lead to out-and-out failure.
Your business needs to ensure that it is considering the culture of the different countries it is planning on expanding into. This doesn’t just mean on an international level either but also internationally, given a range of countries has regional and subculture differences as well. These differences are going to alter things like the names of products and services you offer, the audience that you are trying to sell to and also the means by which you market your brand as a whole. Consider local businesses (and soon-to-be competitors) in order to study how they operate and how this varies from what you already know. Once you have a better understanding of working in the face of a cultural divide, you will be in a much better position to expand.
It’s only the beginning
And we mean that in the best way possible. If you’re feeling overwhelmed by all of the planning involved in going global, just take a step back and remember that you can accomplish each component by designing multiple achievable goals and the plans that move you toward meeting them. With the rest of the world getting closer and working together more collaboratively and quickly than ever before, your company shouldn’t fall behind. Global expansion is possible, (and dare we say, inevitable) as long as you take it one small step at a time.
To learn more about financial factors and cash repatriation made easy, schedule a discovery call with our team.