Why do firms expand internationally

Eliminate unscrupulous buyers and tire kickers, and thoroughly understand the proposed transaction while accurately managing expectations of all parties involved.

But if you or your organization lack patience, commitment, a desire to learn and a strong value proposition, international expansion can be the most painful and costly undertaking that you have ever tackled.

Like any other significant undertaking, realistic goals must be set, and important questions need to be both asked answered. What are you hoping to accomplish, both personally and for your organization? Will such an expansion affect your present operations? If yes, then how? How will you finance the undertaking? Are you being realistic in your expectations? Are you ready for multiple, grueling flights, jet lag, bad hotels or great hotels in some places , unfamiliar food sometimes amazing and sometimes inedible , and driving on unpaved, potentially hazardous roads?

Is your company prepared to commit the human and financial resources necessary for the development and implementation of its international strategy?

Exporting American-made goods and services has become a hot topic as the U. How to design an effective international expansion strategy. Depending on your business model, you might have multiple goals to accomplish. The more obvious reasons are increasing market share and growing a local sales presence, but these are not the only reasons by any stretch. Having worked in international operations for years, and having managed the process of launching offices in Asia, Europe, and Latin America, I can attest that the operational complexity of setting up new offices is much higher than most business people can even begin to comprehend.

My list of Questions to Guide Your Local Market Entry is intended to give people new to international expansion work a small glimpse of what a heavy undertaking it can be to launch a new office in another country.

This is especially true for your Legal, Finance, BizOps and other teams that will have to support your daily operations not only when you set up the office initially, but there work grows exponentially more complex from that point forward.

Employer branding takes time to build up, and many countries do not have large numbers of people who want to risk working with an unknown brand that only has a tiny office in a new country. Lastly, there is a huge amount of work for any company doing business overseas related to understanding the local tax implications.

The tax burden does not just relate to the initial work of understanding local tax rules and applying them, although that alone is quite an undertaking. Depending on the country and how much revenue you already generate from customers there, your company might suddenly owe such a large amount in local taxes that it can actually cause some of your core financial metrics to change.

In fact, your profit margin and other financials will have to be recalculated, depending on the amount of revenue you already have from a given country that will now run through a new entity. Figuring out the best tax strategies requires knowledge of local tax laws as well as international taxation rules, and is very time-consuming, because any tax consultant group will need to spend a good amount of time familiarizing themselves with the business and all of its particulars.

Surprisingly, The lessons learned from this survey primarily apply to larger companies that have quite a bit of experience, and already have a local presence in 6 or more countries. Taking your business into new markets and seeing it grow locally, along with witnessing the impact on building the overall global business, is one of the most rewarding professional experiences you can have.

You can definitely do it! For companies that want to pursue international expansion , there are many opportunities to take advantage of. These include gaining access to new markets, growing teams, and increasing revenue.

Companies of all sizes should be aware of the business benefits of globalization. And these are the top five reasons companies should be thinking about going global. With a new customer base, you can identify and create unique opportunities in local markets for your business to fill in the gaps. Just be sure to consider the cultural factors before expanding into a new market. Thinking globally is becoming less of an option and more of a requirement when it comes to outpacing the competition.

Taking your business international presents growth opportunities by expanding options for talent, customers, and creating cost-savings for imports and manufacturing. Whether you run a startup or a year-old enterprise, finding skilled workers who can help drive your company is crucial. Expanding globally gives your company the opportunity to access high-quality talent from around the world. Hiring global employees can provide unique insights into local cultural norms.