Should Businesses Be Focusing on Global Expansion?

With more international trade than ever before and the digital renaissance still in full swing, it's inevitable that any business will eventually start wondering just how far they can grow if they set their mind to it. After all, if you've been successful in your local market, taking things national, and eventually international, seems like the next logical step for many products and services. However, whilst this seems like an obvious boon on the surface, it's not always that simple. Global expansion has its pros and cons, and for businesses that become too focused on what an international audience can provide, the results may not always be worth the push.

So, should your business fight for a place on the international stage, or should you be placing your resources into more localised efforts?

What Does Global Expansion Actually Involve?

When you are a local business working solely within your country, the market that you're providing goods and/or services to is the domestic market. Global expansion means growing your organisation so that these services and your business's operations can be offered in other countries, markets, and regions. This may be done in an effort to improve profitability, gather influence, or simply broaden the international knowledge and reputation of your particular brand. Different countries offer different markets, and even a middlingly-successful business in their own market may fare significantly better in another country's market if the desire for their services is higher.

The fact is that global expansion can mean many different things for many different businesses, which is one of the many reasons online MBA courses exist. A business's motives aren't always cut and dry, and to understand whether global expansion is best for yours, you need to first understand what you're hoping to achieve.

Expansion For the Purpose of Business Growth

This is one of the more immediately understandable reasons one may want to expand their business on an international scale. More countries mean more markets, which in turn, means a lot more people that you can offer your services to. These potential buyers can lead to the right business increasing their revenue by millions, but it's not always going to be a sure thing. Strong data skills will be required to ensure that the high level of expense that comes with expanding into a new territory or country is going to be worth the risk. You don't want to put your domestic services at risk by being too hasty with a global approach.

Expansion For the Purpose of Creating New & Exciting Revenue Streams

If dropshipping has put anything into the public consciousness, it is that having multiple sources of revenue will be beneficial for strengthening your safety net as a business. By expanding into many different markets, even if your overall market share in these spaces is smaller than within the domestic market, you have the chance to build many different smaller revenue streams that can all add up to something big. That way, even if some of them fall through or underperform, you have the other markets to back them up.

Do keep in mind that this bears the same potential risks as the previous justification. However, if you're starting off small with some multi-domestic market growth (going from domestic market to domestic market slowly building foundations that reflect the specific touch points of the target areas) this will allow you to proverbially dip your toe into the new market without having to invest a huge amount into a workforce or infrastructure right away. This works especially well when you have a strong existing online presence for when new people are introduced to your business.

Global Expansion and Branding

Regardless of your field, one of the most vital things a business has is recognition. This doesn't necessarily mean the most people being aware of your business overall, but merely the number of people that know your business who would be interested in your services. For example, if you're a business that sells supplies to hospitals, a small handful of people at most is going to know who you are, but if the 20-30 people who are aware of you all own and run hospitals, then that's strong brand recognition in your audience.

This may seem obvious, but it's important to remember when you're looking to expand out globally. You need to leverage what you have, and if you have a strong reputation in your domestic market, then it's vital that you use that reputation when trying to build out. To use another example, Switzerland is known for making high-quality watches. If you're a watchmaker in Switzerland, the best way to face a new market is to focus on your standing within Switzerland as a watchmaker. By showing you succeeded in a market that is known for its quality, you'll be starting with a culture cache you otherwise may not be able to develop quickly.

So, Should Your Business Focus on Global Expansion?

Naturally, this isn't the type of thing we can answer for you in an article. However, based on the points we have detailed here, there are things to keep in mind. Global expansion can be a fantastic opportunity to expand your influence and audience, but as with all things, it comes with a cost, and unless you feel that your success domestically can be leveraged, you're going to have a very difficult time bridging that gap.