Why companies expand into international markets

Why companies expand into international markets

Published on

September 12, 2019

The first and most important part of having a successful international expansion is to have a clear understanding of why you are chasing new countries. In this blog post, you will learn four of the main reasons why companies expand into international markets.


Commercial traction:

#1 Reason why companies expand into international markets:

The most common goal of companies going international is to acquire more customers, boost their sales, and increase their revenues.

By entering a new country, your company gets access to customers that were not on your radar yet. Therefore, you can increase your client base and reach revenues that you would not be able to reach, focusing on your market only.

It is also nice to keep in mind that increasing the number of potential customers is not the only interesting aspect for companies looking for commercial traction. Very often, businesses that sell internationally can charge higher prices for the same services in different countries. This way, you can increase your margins without making your customer support team go crazy.


Decrease Operating Costs:

#2 Reason why companies expand into international markets:

It is also common to see companies going international with the goal of reducing their general costs. In the tech scene, this is very often related to finding cheaper talent and suppliers. In this way, companies can achieve more results while expending fewer resources.

The local tax system also plays an essential role for companies chasing this goal. Countries such as Ireland, the Netherlands and Panama attract a lot of companies by offering better conditions than other countries.


Boost competitiveness:

#3 Reason why companies expand into international markets:

Accessing new markets can provide much more than just “tangible” results. For example, more customers and cheaper suppliers. By accessing new markets, you will automatically have to face new competitors. And also adapt your proposition to different local needs. Therefore, your company is forced to innovate and find new solutions to stand out in the market.

Being in a new country can also give you access to several great opportunities. Such as new talents, R&D incentives, strategical partnerships, and many other benefits to increase your (national and global) competitiveness.

More than that: your authority grows exponentially when you start selling abroad. As a consequence, you can also get many more clients and/or charge higher prices in your own country.


Diversifying risks:

#4 Reason why companies expand into international markets:

Last but not least, risk diversification is another essential reason why companies expand into international markets. Companies very often chase this goal when they are based in countries with high political and economical instability.

Because there are a lot of uncertainties related to their market, it is safer to tackle other countries and as a result minimize the impact in case something goes wrong. This strategy allows companies to be more stable and therefore afford risks that were not possible before.

Clarifying your reasons to expand into international markets:

It’s rare to see companies that are expanding into international markets for only one of these four reasons – and there is nothing wrong with that. However, if you want to set up an effective internationalization strategy, it is crucial to prioritize one or two of these goals.

The reason for that is simple: it’s almost impossible to find a single country that provides you with all the benefits mentioned above. If you are going to a region in which you can charge more for your services, you will very likely have higher operating costs.

Therefore, companies that don’t set a clear expansion goal have big chances of entering the wrong countries and/or wasting valuable resources.

That is the reason why we provide you with the chance to create an internationalization profile with the Go Global Platform. By analyzing several aspects of your business, our platform provides you with clear insights on how to start and implement a successful international expansion.

Do you want to access opportunities in international markets? Then click the button below and start your internationalization today!

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