The idea of growing big comes when you start to strategically think of leveling up. This is by working on business pivotal points on how to internationalize your local business. Owning a business is not an easy task. It comes with a lot of responsibilities, leadership skills, management, implementation and execution abilities. The visibility of your local business seems easier to control. However, increasing the visibility to an international level can be challenging. Before you will be able to internationalize your local business, you need to understand the concept of business internationalization. You will learn this concept in this well researched article.
How to internationalize your local business
How do you step up your business game and stand unique amidst competitors? Will you be able to deliver your services appropriately? Do your products need redesigning, repacking and branding with a new logo? How do you find your target audience and create a market for your products? These are crucial questions to the development of your business.
Having answers to these questions is the first step to converting your small business to an international business. All of these of course, follow a meticulous marketing strategy to make your product or service known amidst several others.
What does Business Internationalization mean?
“Business internationalization”, to a layman, means making your business go international. This isn’t wrong however, internationalization is not just a word, it has a whole spectrum of different aspects behind it.
Considering the historical perspective, internationalization of businesses began with mankind’s ability to travel across the seas and borders. The term is ambiguous and definitions vary depending on the phenomenon.
Penrose’s (1959) point of view on the topic focuses on the firm’s core competences and opportunities in the foreign environment. Welch and Luostarienen (1988) defined internationalization as the process in which firms increase their involvements in international operations. Johanson and Vahle (1977) agree with that.
Generally, business internationalization is the process by which businesses increase their awareness of influences of international transactions on their future. This is to establish and conduct transactions with other countries.
It defines your brand’s interrelationship with markets outside your domestic reach.
When you decide to internationalize your local business, employing a strategy is a great place to start. What strategy can you employ? Is it the best for your business? Keep reading to learn more.
What is business Internationalization Strategy?
International strategy is the process through which business owners sell their goods or services outside its domestic market. This yields a lot of new opportunities for your business to grow.
Foreign market entry strategies differ in degree of risks they present. The market entry system that bids the lowest level of risk and the least market control is export and import. The highest risk but also the highest market control and expected return on investments are associated with direct investments. These investments can be made as an acquisition (sometimes called Brownfield) and Greenfield investments (Terpstra V. , Sarathy R. 2001 )
Under this section, you are going to learn 4 business internationalization strategies
1. Exporting and Importing
You must have heard about these two before, now is a great time to put the knowledge to use. Exporting is the process of selling goods and services produced in one country to other countries. This strategy is first and most common type of business internationalization strategy.
This is another way to enter the foreign market with a limited degree of risks. An international business licensing agreement involves two firms from different countries. It is a contractual agreement whereby a company transfers the right to manufacture a product in a foreign country. It includes the right to use any type of expertise like patents, trademarks, company name, technological designs or business methods.
This is similar to licensing. It is a form of marketing and distribution between a franchisor (business owner) and a franchisee(individual). The franchisor grants an individual the right to run a business by providing a service using the franchisor’s business system. Simply put, you are being granted the right to duplicate a successful business model.
4. Joint ventures
An international joint venture occurs when two business based in two or more countries form a partnership. If you decide to explore international trade without taking on the full responsibilities of cross border transactions, consider this strategy. With joint ventures, you have the option of forming a business with a foreign partner.
From the discussion so far, you must have caught a glimpse of what business internationalization is all about. Now, you have to be careful while you read because this is where the real icing of the cake is! The steps to internationalizing your business!
How to internationalize your local business in 10 steps
This is the main purpose of this article. The next few paragraphs contain 10 simple and sure ways to internationalize your local business. Number 7 is my favorite.
1. Choose your expansion country
Evaluate the market attractiveness of each country before choosing your expansion location. Do this by employing the use of reliable and accurate standards to ascertain the best fits for your services. Check the following factors as well;
- Demand for your products and services
- Local protocols that are most likely to affect your business
- Taxation and government issues in your chosen country
- Licensing and certification
2. Supportive visual appearance, code and structure of website.
An amazing and well-designed website serves to ensure that your website can support texts in any writing system without any bugs. Make sure to verify that your website’s forms or those of third parties can support text inputs of all languages. Also, check whether things like address forms can accommodate foreign ones.
Nothing is more frustrating for international customers than not being able to sign up or finish an order simply because web forms do not recognize non USA based addresses.
3. Conduct a market analysis
Proper analysis of your market is an important step to internationalizing your business. As you analyze your preferences, pay attention to the external environment. This will be the most significant departure from your present operations. The “porter’s five forces and the classic SWOT” are beneficial tools for setting up a business in a particular country.
4. Find your target audience
Creating a target audience for your products is crucial to your business. When thinking internationally, remember to act locally as well. Countries like China, India and Nigeria have an incredible dialectal, traditional and socio economic diversity. This can make any effort to approach them in a monolithic way unproductive.
For example, your services target 20 years old intending entrepreneurs in Nigeria. A campaign more explicit to this audience would be more effective than one targeting 101.27 million Nigerian internet users.
5. Be conscious of the cultural gradations and sensibilities
As a case study, Blizzard and their flagship online multiplayer game world of Warcraft found this out the hard way. The game was taken down for few weeks in 2009 due to its depiction of human bones- traditionally sacred in Chinese culture. Until the local authorities edited what was conceived as inappropriate content.
A little bit of inquiry about a culture can save you the stress of dealing with bureaucratic downtimes. Remember, countries have their own country specific internet regulations.
6. Use a clear and understandable language when internationalizing your local business
It is important that the language you use for your website is clear and straight forward. In most countries, English is an official language so it should be considered.
7. Strategize your market entry
Will your current business model work well in the new country? To successfully enter the new market, you may want to consider acquiring a local business expertise. In this way, you can access local knowledge or make a strategic alliance with an existing company.
8. Assess your present market positions
You know and understand your position in the current local market. But you will need to consider your positioning in international markets as well. Assess the competition and their positioning to help you find your own place.
9. Assess your main competences
Once you’ve gathered about your market positions target customers and products and services it’s time to assess your main competences.
Do you currently have access to the skills and resources you need to position your business successfully? If not, do you know how to acquire these core competencies? Answers to these questions will proffer solutions to assessing your main competences.
10. Examine Supply chain and value chain options
Internationalizing your local business could require exporting and importing, franchising, regulations, and licensing. Do you have a system in place to manage all elements of your supply chain? You should check out the strategies discussed earlier for easy references.
There you go! The 10 steps to internationalize your local business. Which one is your favorite?
Conclusively, business internationalization process can be quite tedious and technical, it is however very achievable. I hope this article helps you to internationalize your local business.