Internationalization, Steps and Process Objectives
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Is internationalization an end, a consequence or a need for companies?
Nowadays, common reasons why firms internationalize are that they want to grow, to have new employees, resources and ideas. Many companies seek international markets for growth as they want to expand their businesses. Probably the most important reason for business internationalization is that many times the company can hire cheaper employees. Some companies go outside to locate the resources that are difficult to keep in their home markets. Also companies go outside if they want to expand their workforce and have new ideas.
Why go international? and Why not?
Companies go international for a variety of reasons, but the goal is typically company growth or expansion. Whether a company hires international employees or searches for new markets abroad, an international strategy can help diversify and expand a business.
But some questions to ask before internationalize a company are:
Companies live to sell products and services to a market, therefore you should always search a market large enough to survive, and that will enable the company to grow which is the goal of most companies.
For most sectors, the national market has declined in recent years (by reducing consumption, foreign investment and national public investment) and is more than likely that in the next 3 to 5 years even continuing stagnation, minimum.
The trend in recent years is that markets are becoming increasingly global and borderless, due to free trade, greater mobility of goods and services, competition from large companies anywhere in the world, and all this driven by knowledge about international markets internet provides to any customer.
Consequently, unless the undertaking is a niche company with a local activity in Spain, which is not affected by the crisis, with a forecast of little competition in the future, the company should be addressed international development, either exporting or implanted in the target markets.
What does a company need to start an international expansion?
The first steps to consider in order expanding in other markets are:
Human resources: whether the team working in the company is ready for expansion. Knowing if you have open minded enough to realize it, knows the customs and if the language of the target market.
Financial Resources: To expand into other markets requires a minimum investment. Can the company handle it?
Control: more control on the market, more investment in communication and distribution channel.
And to start this expansion the company must:
Select the market
Knowing the customer profile
Meet the competence
Adjust prices and competition costs
Knowing the benefits perceived by customers
Selecting a method of expansion
Make an assessment of the results and have control over communication, the agents work or / and importers
Market Selection
Knowing the customer profile
Meet the competence
Adjust prices and competition costs
Knowing the benefits perceived by customers
Selecting a method of expansion
Make an assessment of the results and have control over communication, the agents work or / and importers
Can a company be international from the start? On which cases might this be possible?
Starting an international company can be easy or difficult, depending on what type of business you intend to engage in and which countries you intend to do business with. You will need to establish a home office, and in most cases you will need to establish an international presence by either establishing an overseas corporate subsidiary or opening an offshore representative office. The basic framework for establishing an international company is more or less the same for any business, that you can sell the product.
What are the key features that differentiate countries?
The main key features that differentiate countries are collected