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Globalization Partners
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Uncertainty is a symptom of the times – market downturns, a global pandemic, and political change mark the current global business environment. The truth is that you can always find reasons to hold back your international growth plans and avoid risk, and now is no different. However, the potential for moving your organization through this period and into a phase of sustainable, rewarding growth lies in your ability to see opportunities where others do not.
If you turn your focus toward growth opportunities in the international market, your company can enjoy a considerable competitive advantage. Here are several reasons why now might be the right time to grow your business overseas.
New markets + new customers = revenue
In a study on which companies bounce back the fastest after a recession, Harvard Business Review stated that organizations that struck a specific offensive and defensive balance in the face of an economic downturn had the greatest chances of success on the other side.
In particular, companies that defensively cut costs through improving operational efficiency (versus just reducing headcount), and also pursued two offensive strategies – developing new markets and investing in new assets – did markedly better than companies that acted too defensively or didn’t fully maximize their opportunities.
Of course, while companies are evaluating offensive moves during times of economic uncertainty, the research into which market to move into proves even more critical. Look at factors that indicate where the lowest barriers of entry may be for your product or service. For example, a country where the population speaks the same language means product documentation doesn’t have to change drastically. It can also be easier to hire in countries where employees speak the same language as in your domestic market.
Also, look at where the highest potential lies. Where are consumer bases showing signs of stability and growth?
During the 2008 financial crisis, while many companies suffered huge losses, Danish toy manufacturer Lego saw profit growth of more than 63% through global market expansion. While the U.S. market was suffering, Lego looked across the world for opportunities. Companies that have been able to analyze and adapt during difficult times, rather than just react, discover new runways for growth.
If executed properly, opening a new market and bringing in new customers means more revenue. And in these times, increased revenue means more stability and capital to invest back into your business. This is what will help you come out ahead months and years down the road.
Global growth can boost your visibility
Coca-Cola, Nike, Disney. These brands produce and sell wildly different products. But they have one thing in common — global recognition. People around the world know what Coca-Cola is. They know what Nike makes, and they know who Mickey Mouse is. Those companies wouldn’t have achieved global recognition and visibility, nor would they have become the household names they are today, if they hadn’t grown across borders at one point in time.
While your company might not turn into the next Disney or Coca-Cola, it’s going to have to mark inroads into foreign markets if it wants to become more credible and visible. You can start small by opening a small office or a store in a new country. But how do you figure out where to go?
If you have an online or social media presence, take a look at who visits your website or follows your company’s profiles. You might have a lot of visitors from a certain part of the world or a sizable following based in a particular country.
If your company is already popular in your home country, people who move from there to a new place might be loyal to your brand. Following your fans can help you get a foot in the door in a new market, giving your company a chance to build recognition worldwide.
International talent is waiting for you
Exploring global business growth opportunities introduces another benefit for your business. It gives you a chance to work with top international talent. One unforeseen result of the pandemic has been a phenomenon known as the Great Resignation. More people than usual are quitting their jobs.
In some cases, people are looking to reassess what work means to them. In others, people want jobs that better fit their life needs. They might want more remote work, more flexible scheduling, or better pay. If your company opens a new branch in a part of the world where there are lots of people looking for opportunities, you’ll have a better chance of finding and hiring the best talent.
It helps to have someone already in-country to help you connect with suitable international candidates. You might consider working with a local recruiter who can bring qualified candidates your way. A recruiter can also help your company understand the ins and outs of filtering applications and interviewing candidates in the new country.
Once you’ve found the people you’d like to hire, an Employer of Record (EOR) can help you manage the onboarding and payroll processes. Even if your headquarters is located in another country, you still need to follow the labor laws and customs of the country you’re now working in.
Hiring international talent gives you the chance to stack your team with high-performers while your company reduces overall cost margins. Depending on where you grow your business, you might pay much less in salary, benefits, and office rent.
Another note: even if your company may not currently be interested in selling into a new global market, having talent in the location when you do could provide a unique advantage when it’s time to execute a market entry plan in that region.
It’s easier than ever to work remotely
The recent shift towards a worldwide remote workforce has shown business leaders that a location-centric approach to hiring talent may be outdated. Shopify CEO and founder Tobi Lutke tweeted, “As of today, Shopify is a digital by default company. We will keep our offices closed until 2021 so that we can rework them for this new reality. And after that, most will permanently work remotely. Office centricity is over.”
One of the biggest lessons of 2020 was that the office might be entirely optional, at least for many companies. Research from Pew found that about 20% of employees worked from home before the pandemic. That number has since jumped up to 71%.
When asked to describe how they felt about working from home or the quality of the technology they had to do their jobs, the vast majority found making the switch to remote work was easy. More than 50% of people want to keep on working remotely even once they have the option of going back to the office.
Before 2020, numerous barriers stood in the way of remote work becoming mainstream. Some obstacles were technological, while others were cultural. Prior to 2020, there was a strong belief that people needed to be in the same physical location to be productive and to get their work done in a timely fashion. But many people remained productive while working from home, putting that belief to bed.
Of course, not every job can be done remotely. If your company produces physical objects, at least some of your employees will need to be on-site during a shift. And while some customer service roles and client-facing tasks can be performed remotely, things like cutting hair, styling outfits, or caring for others typically need to be done in person.
If remote work makes sense for your company, you can use time trackers and other productivity tools to keep employees on track. Collaboration tools, like Slack, make it easy to communicate with your team in real time, whether they’re working at your company’s headquarters in London, from a loft in Brooklyn, or from a chambre de bonne in Paris.
You can tap into foreign investment
Your company wants to grow its business globally. The odds are likely that plenty of countries out there would be all too happy to have your company set up shop. To encourage businesses to pursue international growth, some countries offer business grants or investments for foreign companies. Depending on where you want to grow your business internationally, you might be able to tap into monetary support from the government, venture capital firms, or private investors.
In addition to direct financial support, some countries offer tax incentives to encourage international companies. You might get a tax break on your company’s income or payroll taxes depending on what the country’s goals are.
Tapping into foreign investment opportunities gives your company the opportunity to grow much larger than it would if it limited itself to a domestic market.
New markets can give you a competitive advantage
Focusing on international business opportunities can give your company a competitive edge in a new market. For example, let’s say your company and a competitor both market widgets. You’re both well-known in your home country. If you make the first move into an international market, you have the chance to build loyalty with customers there before your competitor can get a foothold. Building a reputation as a global business can also boost your credibility at home.
Diversification is your strength
Companies that depend on one product or service selling into one market to one specific customer, supplied by a single-source supply chain, their revenue may not be stable enough to withstand a global crisis. As a business leader, the current climate has made you not only react to the now, but look ahead and wonder, “what else should our organization prepare for, and how?”
While no one has a way to tell what will come, as with any high-performing portfolio, an investment’s strength lies in its diversification.
Multiple products and services in more than one market mean a diverse stream of revenue. Access to multiple markets and consumer bases also means you’ll have greater visibility into trends, and more insight that can be gathered for future product development.
You can strengthen your business today through a diversification strategy, and beyond beating the competition, it gives you an advantage on any challenges the future will bring.
International growth: It starts with research
No business grows across borders successfully without a thoughtful, data-driven strategy. Are you ready to build yours? Read “4 Tips for Developing an International Expansion Strategy” next.
Globalization Partners enables companies to quickly and easily expand into more than 187 countries without the hassle of setting up local branch offices or subsidiaries. You identify the talent, and we employ your team member via our in-country payroll. This enables you to quickly and easily hire around the globe and lifts the burden of figuring out HR, tax, and legal matters from your shoulders to ours.
Globalization Partners: Succeed Faster
