The global marketplace is growing, and that’s encouraging for businesses large and small who want to expand internationally. The World Bank Group reports that in 2018, global economic growth is expected to expand by 3.1 percent, with longer-term growth for the global economy projected at a stable rate.1
Going international with a business in an environment this welcoming to it can provide many benefits for both companies and customers. These include:
- Increased sales for the business
- Providing a needed product or service for a new market
- The ability to establish a worldwide presence that contributes to overall company growth
Technology and the rise of e-commerce capabilities have enabled more global transactions than ever before. Global retail e-commerce sales reached $2.3 trillion in 2017, according to eMarketer, a 24.8 percent year-over-year growth spurred largely by mobile commerce.2
If you’re hoping to enter the global marketplace with your business, a strong international business strategy might start with following this essential checklist for a successful launch.
1. Investigate: Target Market Research
Just as when you set out to create an effective business plan in the United States, the first step to enter international markets is research.3 Some questions to ask about the target market include:
- Is there a need for my product or service?
- How competitive is the industry there, and what differentiates my offering?
- Does the target market have the infrastructure required to maintain business operations?
- How strong is the economy in this market? Is selling here worth the time and effort?
- Does this product fit in with cultural standards in the target market?
A product or service that is a hit in America may have little value overseas. Use this initial research to make sure expansion makes sense.
2. Create an International Business Strategy
When research confirms a product or service is viable for a certain market, the next key step is to create an international business plan with the following components:
- Executive summary of what the product or service is and how it will benefit target customers in the new market
- Market analysis with research of the new international market, including competitor analysis
- Business structure detailing how you will sell your product: export, license, franchise, etc.
- Business strategy outlining goals and metrics for all of the following:
- Short-term strategy for launch
- Medium-term strategy for pursuing objectives within the next year or so
- Long-term strategy for sustainable growth in the market
- Budget for projects supporting strategy components
- Project plan with goal dates for completion
- Organizational team list detailing who is on it and what teams from the business will be in charge of specific components of the international business operations
The international business plan will hold team members accountable to work on projects that propel the business forward. It improves transparency for the home office and enables departments like marketing to support international efforts.
3. Compliance, Compliance, Compliance
An international product launch could be illegal depending on certain regulations in the targeted country. Some countries forbid the commercial sale of certain products or ingredients, especially in the food and drug industries. For example, while melatonin is a legal sleep aid for over-the-counter sale in the U.S. and other countries, in Australia it is only available by prescription.4
Businesses that haven’t followed proper legal procedures before launching may face lawsuits that dismantle their entire enterprises. Some actions that should be taken in the interest of legal and regulatory compliance before an international launch include:
- Creating local commercial agreements
- Learning regulations from government agencies
- Getting any certifications required for certain products/services
- Investigating customs and shipping requirements
- Maintaining comprehensive corporate records
It’s wise to work with an attorney who is an expert in the laws of the country in which you want to expand throughout this process.
4. Coordinate Distribution
Depending on how a business plans on selling their product or service in an international market, the business may rely on distribution channels that include:
- Corporate stores
- Independent business owners
- Online e-commerce channels and shipping distributors
- Individual associates
Businesses may want to work with distributors that have U.S. representatives, or they may choose to go directly to the source to find the best distributors that fit their business model. Some places to connect with foreign distributors include American chambers of commerce in the target countries, foreign chambers of commerce in the U.S. that represent those countries and international business consultants.
5. Make Sure the Launch Fits With the Local Culture
Launch dates in international markets are exciting. A business might choose to host an event and invite local press to cover it in traditional media channels and influencers to spread the word about it in a social media space. Perhaps the number one priority when staging these events is to be mindful to and respectful of cultural norms.
This applies to business meetings, too. Having a grasp on basic language, observing certain customs and traditions, dressing appropriately, using an interpreter if necessary, and presenting a business plan in a way that resonates with your international audience are all essential global business best practices.
6. Promote With a Global Marketing Strategy
Once a business has launched in an international market, it’s vital to get the word out that the business is expanding. Announcing a new global presence alerts other countries that the business is growing, which could lead to new opportunities down the road. Business shareholders also need to be alerted to business growth so they understand how it could affect them.
Businesses can create momentum for sales in a new market by advertising on the right channels. For example, Americans might not be aware of WeChat, but as the most popular messaging app in China, it provides significant marketing potential for product launches in that country.5 A strong international business plan should include details on how a business intends to market the launch and promote sales afterward, and a strong global business strategy always includes plans for sharing the international expansion with local and current markets that can help spread the word about it.
Is Global Business Expansion in Your Future?
Technology is making global reach more attainable for businesses of all different types and sizes. A successful international business strategy begins with a launch plan grounded in diligent research and compliance to be legal and profitable. Since global business is expected to continue to increase in coming years, you could be at the forefront of these exciting markets with the right approach.
The online MBA program from the University of Kansas School of Business prepares students for success in global markets. Students gain access to a robust network of more than 25,000 KU School of Business alums, many of whom have the international connections to help the Jayhawk community realize their global business dreams.
- Retrieved on August 15, 2018, from worldbank.org/en/news/press-release/2018/06/05/global-economy-to-expand-by-3-1-percent-in-2018-slower-growth-seen-ahead
- Retrieved on August 15, 2018, from emarketer.com/Report/Worldwide-Retail-Ecommerce-Sales-eMarketers-Updated-Forecast-New-Mcommerce-Estimates-20162021/2002182
- Retrieved on August 15, 2018, from sba.gov/business-guide/plan-your-business/write-your-business-plan
- Retrieved on August 15, 2018, from ama.com.au/ausmed/jetlag-drug-remains-prescription-only-australia
- Retrieved on August 15, 2018, from theverge.com/2018/2/1/16721230/wechat-china-app-mini-programs-messaging-electronic-id-system