Many US-based multinational corporations (MNCs) sell, hire, and invest more overseas than in the US. From companies as diverse as Intel to Coca-Cola, more than two-thirds of sales take place outside of the US. This shows that international growth can be essential to survive in business.
If you also want to expand your business internationally, you can learn a lot from these MNCs. Not least, how they’ve used experience, knowledge, and determination to achieve global growth.
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But what international expansion options are available to you? Let’s take a look!
1. In-House Expansions
One key method to achieve international growth is to manage an in-house approach. While this offers business building autonomy, it takes a lot of preparation and commitment.
Some considerations you’ll have to work into your global mobility framework include deciding whether to expatriate employees or hire local talent, choosing who will lead the expansion, and reviewing the financial and legal implications of all these decisions.
2. Exportation
Exporting is one of the most common ways to begin international expansion. It gives your enterprise a clear interest in pursuing the new market. Exportation also avoids the expenses of establishing a subsidiary abroad.
That’s not to say the process isn’t complex, though. Companies wishing to export overseas will need contractual agreements with marketing agencies, distributors, retailers, or a mix of all these. Factor in tariffs, marketing, and other costs and it’s clear that this international growth method means a significant investment.
3. International Partnerships
Strategic alliances with companies already embedded in a specific international location is another expansion method. This kind of partnership allows both companies to achieve common goals and enjoy shared benefits.
International partnerships may be a legal requirement to begin operating in certain countries. Depending on your industry, this can be the case in Saudi Arabia.
That said, a disadvantage of these partnerships is that they can result in unwanted compromises and a loss of autonomy.
4. Mergers and Acquisitions
International expansion can also involve mergers and acquisitions. These are when two firms merge or one consolidates another.
While they offer a fast track into a new market, it can be an expensive route. What’s more, you’ll need to analyze the laws of the country you’re entering. Remember, foreign ownership restrictions might not always work in your favor.
On the contrary, if done correctly, there are a lot of advantages like a quicker and more efficient way to gain a foothold in a new market. Additionally, buying existing businesses can give you access to the existing customer base, local market knowledge, and distribution channels.
5. Working with a Global PEO
Working with a professional employer organization (PEO) is another option. As the information in this link explains, a well-chosen PEO will enhance any method of international expansion.
Your PEO will work with you to determine your best growth route, including those listed above and more. They’ll also guide you through the legal and cultural implications you’ll encounter. And all while supporting you with everything from payroll to digital strategies.
How to Expand Your Business Internationally
Reaching new markets and crossing cultural divides isn’t always easy. But with these tips on global growth strategies to guide you, it should now be a lot clearer what you need to do to expand your business and achieve international success.
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