business plan international expansion

A complete guide to global business expansion strategy

Everything you need to know to develop your own international business expansion strategy.

Overseas expansion can seem a farfetched dream to most, while even those considering the process may be daunted by its complexity. Yet, though expansion can be time-consuming and involved, it need not be exclusively the domain of giant corporations like McDonald’s, Google, Apple, or IKEA.

With a comprehensive and carefully-composed global business expansion strategy, even start-ups and SMEs can expand their operations into new, potentially lucrative markets.

This article provides a broad, overarching guide to international business expansion: what it is, how it can be beneficial as well as challenging, when to consider it, how to build a solid global business expansion strategy, and how partnering with an Employer of Record may drive the success of your overseas venture.

Why go global? A look at the benefits and challenges of international expansion

An important part of considering global expansion for your business is being aware of both the pros and cons, and balancing these carefully. For whilst there are many potential benefits to expanding overseas, there are a number of challenges you may first have to overcome, and the nature of your expansion will be informed by whether or not the pros outweigh the cons.

Potential pros of global business expansion

• Increasing global sales and expanding client lists by tapping into new and lucrative markets; including the potential to reset the lifecycle of older products and services.
• Maintaining a competitive edge in an increasingly globalized world by positioning yourself and your brand as a leader in untapped markets.
• Widen your available talent pool to include employees and contractors operating all around the world, with expertise in new and expanding areas.
• Increasing cost savings through relocation and access to new, more affordable markets.
• Securing the financial future of your company by diversifying your revenue streams and the markets you operate in - essentially building greater business resilience.
• You must comply with all applicable labour and tax laws and regulations in the countries and regions you intend to expand into. This can be complex and costly, especially if you fail to comply.
• The culture, languages, and politics of different countries can vary dramatically, and should be researched thoroughly prior to expansion otherwise your offering may be met with confusion, apathy, or hostility.
• Local competitors who are already long-established in your new target market may have an advantage over you, owing to their local, innate understanding of that market.
• Managing remote and international teams requires a reframing of your managerial practices and office culture to be best effective; for example, you must consider how you will work effectively across multiple different time zones.
• It can be prohibitively costly to expand overseas, depending on the global business expansion strategy you choose to develop, especially when expansion is conducted independently.

Challenges of global business expansion

Defining global business expansion.

Global business expansion looks different for each individual business. What it means and what it requires will change depending on the industry you’re in, the reasons for your expansion, and how you hope to enter the new market.

Having said that, we can generalise. Global business expansion – also known as international expansion, foreign expansion, or overseas expansion – is a business growth strategy used to enter new markets in other countries. It can include the movement of business operations, resources, workforces, products, and services.

Successful expansion requires the tailoring of a global business expansion strategy unique to the enterprise’s industry, offering, and goals.

How to know when your business is ready to expand overseas

Not every business needs to expand overseas, nor will every business naturally come to a definable point at which international expansion is the logical next step. Knowing when your business is ready to expand often depends on whether you have the time and resources to develop a watertight strategy.

If global expansion is something you want to see in your business’ future, then we’d suggest you begin planning today. The more prior preparation you can inject into a global business expansion strategy, the more evident it will be when the time comes for your enterprise to take that leap.

How small businesses can also expand internationally

Traditionally, international expansion has been the realm of large corporations with deeper pockets than most start-ups and SMEs can ever hope for. Thankfully, however, in our present era of expansive and accessible globalisation, the opportunities for smaller businesses to expand overseas do exist.

The key to global business expansion for small and smaller businesses is, of course, to minimise the costs involved . The most straightforward means of reducing expansion costs is to partner with a global business expansion solutions provider , whose expertise and existing international presence can reduce the risks you face and mitigate the need for costly foreign subsidiaries.

Developing your global expansion strategy

Every individual expansion requires its own tailor-made international business expansion strategy. Developing such a strategy should take time, care, and consideration. What follows is a broad overview of the 10 components we believe are key to an effective expansion strategy. For a more involved and detailed discussion of these 10 steps, read our post on how to avoid the pitfalls of global expansion .

10 key steps to a comprehensive international business expansion strategy

• Set your goals: It is crucial you know why you want to expand overseas. A clear set of goals will help you keep your strategy on track throughout the expansion process.
• Research: Acquire a firm understanding of the market you’re aiming to enter, including the competitors there, and the culture which frames it.
• Choose an expansion model: You can expand into new markets via a range of expansion models , including exportation, licensing, franchising, partnerships and joint ventures, mergers and acquisitions, and greenfield investments. Knowing which will work best for you is crucial.
• Consider building overseas infrastructure: International expansion is best supported by the establishment of local infrastructure on the ground. This infrastructure can comprise a foreign office or subsidiary, a remote workforce of employees and/or freelancers , or a network of third-party local partners.
• Reconsider branding in an international context: A different audience will likely respond quite differently to your branding, compared to the home audience it was developed for. Consider how best to rework your branding in an international context.
• Tailor your offering to the new market: Similarly to your branding, your offering – whether products or services, B2C or B2B – should be reevaluated with the target international demographic in mind.
• Equip your teams to work internationally: Working effectively across time, cultural, and linguistic barriers is not easy. Adapt your management style to consider the potential benefits of asynchronous work and strategic human resource management .
• Budget: Draft a budget which considers all the various costs of international expansion , and which can be consistently guided by KPIs established during your ‘goal-setting’ phase.
• Risk assessment: Understand the risks specific to your particular international expansion plans, and determine how best to mitigate these whilst ensuring 100% compliance with all relevant labour and tax laws.
• Partner with an expert in global business expansions: Refocus your own role in international expansion to those elements most important to you and your business, whilst reducing stress, costs, and ensuring compliance, by utilising the expertise of Mauve Group .

How to choose which international business expansion methods will suit your business best

The expansion model you choose – exportation, licensing, franchising, etc. – will very much depend on the goals you set for your expansion. Each model has a different set of requirements, challenges, and potential benefits.

For example, consider that fast-food chain McDonald’s’ success rests on the franchising model: approximately 93% of all McDonald’s restaurants worldwide are “owned and operated by independent local business owners.” For Netflix, on the other hand, partnership deals with local mobile operators and TV providers were key to its successful expansion into around 190 countries across the globe.

Seek the advice of professionals when determining which model might work best for you.

When to establish a foreign subsidiary

Establishing a foreign subsidiary is arguably one of the most involved international business expansion methods. A foreign subsidiary is a separate legal entity based on the ground in the overseas country, and majority owned or controlled by your company whilst remaining responsible for its own taxes and assets.

Establishing a foreign subsidiary gives you a stable and potentially impactful foothold in the target country, but equally carries with it high costs, a great number of compliance hoops to jump through, and many additional managerial considerations.

Oftentimes, establishing foreign subsidiaries may not be cost-effective nor practicable to the smaller enterprise seeking to expand overseas. In such instances, the business owner may wish instead to leverage the existing international presence of an Employer of Record .

Go global with Mauve

It is our hope that having read our complete guide to global business expansion strategy, you feel better equipped to begin your own journey toward international expansion.

Many of the risks and costs associated with business expansion can be mitigated with the help of a trusted partner like Mauve, whose extensive experience in overseas expansion can aid start-ups, SMEs, and larger enterprises with compliant international hiring of employees and contractors , visa and immigration support , global payroll , and expansion strategising .

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Global Expansion: 3 Factors to Consider Before Expanding Your Business Internationally

• 30 Jul 2019

It’s a pivotal moment: The business you’ve founded, advise, or are a key employee at has hit its stride in the domestic market and is looking to expand internationally . There are several factors for your organization to consider:

• To what extent will your product or service need to adapt to consumer preferences in new markets?
• Who will the competitors be in those locales?
• Should you go it alone or enter with a local partner?

Before you take the plunge, how do you know which foreign market to enter? Which market considerations can give you a read on the opportunities and risks you might face in your chosen country?

Economic indicators—data used to gauge an economy’s performance and its future direction—can provide you with valuable insights as you weigh your options for international expansion.

Access your free e-book today.

Factors to Consider When Entering a Foreign Market

An understanding of key macroeconomic indicators is an essential international business skill that provides a broader context which, when combined with a firm-level analysis, can not only give you greater confidence in the decision to expand internationally, but a handle on the potential benefits and drawbacks of taking that course of action.

Here’s a look at three key economic indicators and what they tell us about the business climate in a given country.

1. Gross Domestic Product

Gross domestic product (GDP) is the value of the goods and services produced in an economy. The lunch you bought at the corner restaurant, the money your government pays to firefighters and teachers, the funds a company spends to build its new headquarters, the value of a vehicle manufactured in your country and sold abroad—all of these are part of GDP.

It’s generally a good sign for business when GDP is growing, but there’s nuance in the number: If a country’s GDP isn’t growing as fast as its population, GDP per capita isn’t rising. That means the standard of living for the people, and their purchasing power, isn’t increasing.

2. Unemployment Rate

A country’s unemployment rate is the number of people who are not working divided by the number of people who are working or actively looking for work. A high unemployment rate can signal that a country’s economy is struggling and may give you pause when considering an investment.

An unemployment rate of zero, however, isn’t necessarily ideal for business. Considering the way unemployment is calculated, those who are changing jobs for better opportunities within a thriving economy are considered unemployed for any time they spend between positions. With low unemployment, companies have to spend more to lure candidates to work at their firms, and those costs often get passed along to consumers in the form of higher prices, which leads to inflation.

When evaluating potential markets to enter, consider what the country’s unemployment rate could mean for your business.

Related: 5 Common Challenges of International Business You Should Consider

3. Inflation

Inflation represents the rate at which the general price level in an economy is rising. If you operate a business in a country with high inflation, the prices you pay for your inputs will increase, and the value of any cash savings you have, or money you’ve lent to others, will erode.

Despite these drawbacks, rising inflation can be good if you borrowed money at a fixed interest rate to establish or expand your business. Thriving economies often have some inflation. As long as it’s stable and predictable, you’ll be able to plan for it in your budgeting and pricing decisions.

How to Determine When a Company Should Expand Internationally

In addition to external economic factors, there are several internal factors to consider before pursuing international expansion. A successful transition into the global market is only possible when business owners know the specific performance metrics their company must meet. Taking this measured approach can set you up to adequately prepare business processes for international expansion and ensure it has the best potential outcome.

Specific business goals should be met consistently over time to ensure a business is ready to serve an international target market just as efficiently as its domestic one. In addition to a solid foundation, these goals should also include:

• Making a consistent profit
• Ensuring substantial demand from potential customers in new markets
• Preparing for future challenges, such as cultural differences and new payment methods

Once these factors are considered and landmarks are met, you can start considering international expansion. This decision can bring plenty of benefits, such as serving new clientele, further developing the company’s brand, and gaining a competitive advantage.

Related: Why Study Global Business? 5 Benefits to Consider

Preparing for Global Expansion

These are just a few of the indicators to consider when deciding to expand your business globally. With a keen understanding of economics and the intricacies of international markets, you can help your organization expand its reach and thrive.

Do you want to turn the uncertainty of today’s economy into an opportunity for your firm? Explore our four-week online course Global Business , and learn more about how to assess the impact of macroeconomic, political, and social indicators on business decisions.

This post was updated on December 5, 2022. It was originally published on July 30, 2019.

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Going Global: How to Expand Your Business Internationally

International expansion can be a smart step for businesses of all sizes, but deciding when and how can be challenging.

Table of Contents

One of the primary goals of any business is to provide an excellent product or service that attracts customers and brings in revenue. However, as your business establishes itself in the market successfully, you may begin to wonder about the next steps. While some small businesses thrive for decades without significant changes, most will find that growth and innovation are vital for long-term survival.

Taking your business global can infuse your company with an expanded customer base and increased profits. But the process might seem daunting, especially for small businesses. We’ve spoken to international business experts to get advice on when you should consider expanding internationally and the steps to take to make your company a global hit. 

Steps to expand into international business

Going global is an exciting opportunity, but it requires careful preparation. Follow these steps to successfully bring your business abroad. 

1. Evaluate your current business before expanding internationally.

Before investing time and money into foreign market expansion, you must evaluate your current operations carefully. Expansion requires a significant investment of resources, so you must ensure your business is well-equipped.

“[Businesses] should have a solid foundation in their home market and a proven business model,” advised Jennifer Mea, founder and CEO of Crestpoint Consulting. “They should also assess if there is a demand for their product or service in the target country and if they have the necessary resources and capabilities to enter a new market successfully.”

To make it internationally, your business should be established firmly at home. But expanding to a new market, even if there is demand, doesn’t necessarily mean replicating success is guaranteed. A successful expansion requires evaluating all operational components.

“An often overlooked but vital step is ensuring that your business has the operational backbone to support expansion,” explained Brian Lim, founder and CEO of The Emazing Group. “This includes scaling up customer service [and] supply chains and ensuring your IT infrastructure can handle new challenges.”  

2. Conduct careful research into the countries where you want to do business.

Once you’ve determined that your company is ready to go international, it’s time to research the countries where you hope to do business. Detailed research is essential because you’re starting from square one in a place where you have no experience.

Thorough research is crucial to understanding the economic and political situation of the countries you consider. The right conditions could make a territory a prime choice for expansion. Meanwhile, poor conditions, even in a country with a high demand for your product, signal you should think twice. 

Dok Kwon, chief operating officer of international Korean barbecue restaurant Cupbop, recommended “doing careful due diligence on the market, including, but not limited to the players, consumer demand and preference, size … potentially finding a partner, figuring out supply chains ― to name a few.” 

Market research will help you determine where your product’s demand exists and how you can successfully connect with potential new customers. Research should also shed light on demographics and the cultural norms and preferences that could impact your expansion.

“This research will help tailor business strategy and adapt offerings to meet local market needs,” Mea explained.

3. Focus your efforts on specific locations.

Research is critical for understanding what it takes to expand to a foreign market and can help you determine where your product or service might succeed. However, the scope of your expansion depends on your goals and your current business’s size.

Expanding to every market where you could potentially succeed doesn’t always make sense. Narrow down the countries and territories you’re considering based on your research. For example, choose a location where you won’t face competition or a nearby country that allows you to use your current suppliers.

When you focus on markets that will be easy to enter and thrive in, you set yourself up for continued growth and future expansion.

4. Consult with experts about your international expansion.

It’s never a good idea to go into a new business venture blind. Speaking with experts can help your international expansion go off without a hitch.

Mea recommends consulting a market research firm to help determine when, where and how to enter a new country. “[They] can provide in-depth insights into target markets, including customer preferences, competitive landscape and regulatory requirements.”

You should also reach out to organizations in your home country that have established business and political relationships with the country where you hope to expand. 

“[Work] closely with government entities, trade commissions and cultural organizations from your home country to build goodwill and rapport with the target country,” recommended J. Skyler Fernandes, founder and general partner of global venture capital fund VU Venture Partners. “This can ease market entry and help overcome regulatory or cultural hurdles.”

5. Understand cultural differences in your expansion location.

Different countries operate within different cultural norms. To expand successfully, you must understand the specific nuances of the environment where you will operate. That means learning the local people’s beliefs, history, tastes and preferences.

Grasping the local culture will help shape your business strategy, including dealing with partners and communicating with the public. Neglecting cultural differences and committing international marketing mistakes could spell disaster for your brand ― even at home. 

The local culture will inform your operations and day-to-day personal interactions. Understanding international business customs will help you build relationships with local partners, suppliers, gatekeepers and employees. It will also help you avoid misunderstandings that could stop your expansion in its tracks. 

4. Adapt to local markets to reach your target customers.

You must adapt to reach your target customer in a foreign market. That means doing more than translating your existing marketing content into the local language.

“While language adaptation is important, true localization goes beyond translation. It involves understanding cultural nuances, consumer behavior and preferences,” explained Fernandes. “For instance, in some cultures, colors and symbols have specific connotations that can impact your branding and marketing strategies.”

Adapting can mean making changes to what you sell. For example, translating a product name literally may result in unfortunate connotations in the local language. You must also pay attention to what people love and what drives people away and adapt your products accordingly. 

“Companies often falter by underestimating the importance of local culture and practices,” noted Lim. “A classic faux pas is to assume what worked at home will work abroad. It’s essential to adapt your business plan to the local context, which might mean altering your marketing strategy, adjusting your product or service offerings or even changing your business model.”

7. Follow local regulations in your new market.

One of the most complex aspects of going global is ensuring you adhere to local laws and regulations. When researching a target country, compile a list of the documentation you’ll need to open and run your business. 

David Bloom, chief development and growth officer of Capriotti’s and Wing Zone, suggested asking “[if] you have the required business entities and legal documentation, trademark protections and financial capability of transacting with the proposed market.”

You should also familiarize yourself with labor laws and regulations before hiring new employees. Pay attention to wage standards and other legal requirements you must comply with, including health insurance or paid time off. 

Tax requirements are another crucial consideration. Beyond understanding what taxes your business will pay and how to withhold from employees’ wages, you should study how operating in another country can affect your business taxes at home.

When in doubt, consult a specialized attorney to help set up your business’s legal structure in the new country.

8. Build an international team.

People are vital to any prosperous business. You’ve surely invested time and effort in fostering a company culture at home that attracts top talent and brings in loyal customers. Replicating that culture should be a priority as you build your international team.

Company leaders should be able to effectively train and communicate with local employees, respecting cultural nuances and business norms. Dedicated local employees are a valuable resource and can help you connect with the local culture and build your reputation. Your business should also develop relationships with local partners, suppliers and government officials. 

Bloom recommended seeking reliable local partners who already know how to operate in the new market and can help you navigate new waters. “When you have a great experienced development partner in the market, you may still run into many of the same issues and obstacles, but at least you have the resources, expertise and commitment in [the] market that can work through the potential solutions to create long-term success,” Bloom said. 

Micah Shepard, CEO of Schaeffler Asia, says finding local partners benefits your business by providing a deeper understanding of the market you’re entering. It may take some effort to find and develop these relationships, but Shepard said that “connecting with the local Amcham [American Chamber of Commerce] could be a good starting point for finding a good partner.” 

9. Make detailed plans for your international expansion.

After researching the country where you plan to expand, considering local laws and culture and building relationships, it is time to set concrete goals and write a business plan .

Bloom said you should begin by asking fundamental questions about how your business will enter the market. “Is your product or service in demand within the region and you are satisfying an existing need or are you seeking to educate and expose the market to a completely new product or service,” Bloom said. “The answer to this question will generate very different business strategies and take you down very different startup plans.”

Still, every strategy should be as detailed as possible. That means considering every aspect of how you will operate in the new country.

“It is crucial to develop a detailed business plan that includes financial projections, marketing and sales strategies and a timeline for implementation,” added Mea. 

10. Prepare for challenges amid your international expansion.

Growing your business globally can be highly beneficial but it’s also risky. There are many upfront costs and if things go south, you don’t want your business at home to tank. 

“Remember to keep some buffer, as there are always unexpected costs and challenges when starting up,” Shepard advised.

While you can’t always predict economic and political fluctuations abroad, you should ensure your company can withstand the cost of failure abroad. 

How to know when to expand into a new country

Deciding to go global can seem even more challenging than the process of expanding abroad. The experts we spoke to agree that it isn’t the size of your business that matters. Your business’s strength, status in the domestic market and long-term goals are critical.

Consider the following to ensure a global expansion is the right move. 

1. Do the benefits of global growth outweigh domestic opportunities? 

If there’s still domestic growth potential, including expanding to another state , focusing your resources at home might make sense. Establishing operations in a new country is challenging and expensive and, as Kwon pointed out, there are usually fewer hurdles domestically.

“I would say [expansion makes sense] when the business in the core market is solid and when the potential upside in international opportunities outweighs growth opportunities in the core market,” Kwon advised.

Global expansion may be the right move if you’ve reached market saturation, you’re facing increased competition or you’ve discovered an untapped market where international demand would bring in new customers and increased revenue. 

2. Is your business strong enough to support global expansion?

While foreign markets might seem like a great way to grow your business, you must ensure your operations are strong enough to support such an endeavor. You should be firmly established with stable sales and a solid business structure. 

Several tools can help you evaluate your business to determine if it can support an international expansion: 

• Strengths, weaknesses, opportunities and threats (SWOT) analysis: A SWOT analysis can help you decide if your business is ready to expand globally. 
• Political, economic, social, and technological (PEST) analysis: A PEST analysis helps you understand how external factors in a new country will affect your company. 
• Competitive analysis: A  competitive analysis is another essential tool to help you see how you stack up against the competition abroad.  

As Mea pointed out, “[these analyses] can help a company assess its internal capabilities and external market conditions to make an informed decision.”

3. Do experts agree a global expansion is the right move? 

Sometimes, the best way to know if international expansion is right for your company is to consult an outside expert. 

“I would suggest [a] third-party assessment,” advised Kyle Jones, co-founder of iCRYO. “If you’re thinking about expanding, but you’re not sure if you’re ready or not, hire a third-party company to assess your ability to expand.” 

A third party with experience in international growth can determine if your company has what it takes to make it in a foreign market. If you’re not quite ready, they can help point you in the right direction. 

Tips for succeeding internationally 

To ensure your global expansion goes off without a hitch, consider the following tips.

1.Ensure you’re ready for international expansion.

If you want your international business to succeed, you must ensure the timing is right. It’s a massive undertaking with much at stake, so you don’t want to rush into it before you’re ready.

“I would say that the number one mistake I see brands make is going international way too soon,” Bloom shared. “It always looks a lot simpler when you are sitting in a boardroom thousands of miles away. The realities of opening a new venture in a new country are always a lot more complicated and time-consuming than they seem.”

2. Start off small in the new country.

Operating in a new country requires a significant investment. Understandably, that might put off many small business owners without millions in the bank. Fernandes recommends starting small by breaking into the market through online retail . You can reach customers and determine demand without shelling out a lot of cash.

If you realize there’s demand and want to launch physical locations in the new country, Fernandes suggests microtargeting. “Rather than entering a new country with a broad approach, identify and focus on specific market segments or niches within that country,” Fernandes suggested. “Tailoring your offerings to meet the specific needs of these segments can yield higher success rates.”

3. Go global but act locally.

Repeating your success in another country isn’t as simple as making a carbon copy of your operations and translating them into a new language. If you want your product or service to be a hit, you must tailor your offering to the unique needs and customs of the people you are targeting. 

“One of the key mistakes is applying what makes you successful in your home market [and hoping it] will make you successful in the new market in terms of management style, marketing and product adoptions,” said Shepard. “My motto is to think globally but act locally.”

4. Rely on people in your global location. 

People are your greatest asset when bringing your business abroad. Locals understand the culture and how business works in their home country. They can help you navigate tricky issues you may not be aware of or understand.

“It is important to avoid making assumptions and to invest in building strong local networks and partnerships,” Mea advised.

Developing relationships with locals, whether employees or partners, will root your company in the new market and help it thrive. 

Lay the groundwork for tomorrow

International expansion is a logical next step for many businesses, from small operations to large enterprises. Growing a global company leads to new customers, increased revenue, further innovation and a burnished reputation. 

Even if you’re starting small in a tiny market close to home, take the time to research and plan carefully. The work you put in today will pay off later as your company’s international presence increases. Leading your business to international success is a surefire way to ensure your company sticks around for the long run.

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10 min read

Business Expansion Strategy: Plan & Execute With Our Guide

Global expansion

August 31, 2022

Last Update

August 12, 2024

Table of Contents

Why should you expand to a global market, key considerations for global expansion, how to plan your global expansion strategy, do it quickly and compliantly with deel, key takeaways.

• There isn't a one-size-fits-all global expansion solution for all types of companies and target markets—you need to do extensive market research before deciding on your expansion strategy.
• To experience the benefits of global business expansion, like increased revenue potential, a competitive advantage, or a new customer base, you must comply with local laws and approach talent planning seriously.
• You can build a global team without the need to enter the complexities of local employment laws and tax regulations by hiring full-time employees through an employer of record (EOR).

What happens when your business growth exceeds domestic borders? The next logical step is to take your business operations overseas so that you can reach your strategic goals, uncover new revenue streams, and build your brand reputation in new markets.

Even the pandemic didn’t stop most businesses that had planned to go global - the benefits of business expansion apparently outweigh the risk that the coronavirus poses to the global economy and doing business in general.

What are the benefits of expanding into overseas markets? How do you create your new market entry strategy? Is there an alternative to opening a local entity in the target country? We’ve created a guide to help you navigate through the expansion process and choose the most suitable option for your business.

Global growth comes with a number of benefits for your business. Here’s why so many companies consider international expansion.

• Stronger brand presence: Doing business in foreign countries allows you to become recognized worldwide and gain international credibility, which leads to an increased number of customers and access to a global market share.
• Access to new talent: You get to hire from the global talent pool , which allows you to close any skill gaps in your teams, have better time zone coverage for an international customer base, and offer customer service in multiple languages.

Crucially, the benefits of global hiring go beyond addressing the skills shortage; businesses can expand strategically into key regions and offer unparalleled flexibility to employees who value the ‘digital nomad’ lifestyle.

— Shannon Karaka ,

Head of Expansion ANZ

• Increased revenue potential: Thanks to increased sales and an expanded customer base, your revenue will grow, you’ll achieve higher returns on investment, and position your business for long-term success.
• Cost savings: You can significantly reduce your business expenses by buying materials and hiring from countries with a lower cost of living, which also often offer favorable tax programs.
• Competitive advantage: Operating outside of your home country allows you to escape a saturated local market, get your market share in foreign countries, and establish your brand name globally before your competitors.
• Diversification opportunities: Expanding outside of the domestic market can be a safety net for local market slowdowns, providing you with more reliable revenue sources.
• New customer base: You’ll reach a more expanded customer base for current products or services and potentially identify new problems to solve by introducing a new product or service.
• New, international investors: International business provides you with access to international investors and funding opportunities that might not be available locally.
• Local partnership opportunities: You can establish reliable partnerships with local companies, which will help you gain trust in the new market.

As your business outgrows your home market, you’ll face several challenges while establishing global business operations, building international teams, and operating risk-free in foreign markets.

Here’s an overview of the main considerations for companies planning their international expansion strategies.

• Local compliance and tax structures: It’s critical to understand local employment laws and tax regulations to avoid costly misclassification and similar compliance mistakes .
• Global talent attraction and retention: To maintain employee satisfaction, you need to create competitive compensation packages and invest in building a healthy company culture.
• New market risks: Entering a new market is always risky, so you should have an exit strategy in case your overseas business fails and you lose the initial investment.
• Cultural differences: Operating in different languages and within different local cultures that may have different business processes and communication styles can require a different approach than what you’re used to.
• Local marketing strategy: It takes time to get to know a new audience and possibly identify new pain points, along with distinct audience demographics and customer journey stages, and calls for an adjustment in your marketing strategy.
• Currency exchange and price adjustment: Product or service price adjustment due to the general standard in the new country, requiring you to also consider currency exchange.

Whether you’re a startup or a big corporation and whether you're planning mergers or setting up EORs, reaching new markets requires a well-thought-out global expansion initiative. Here are the steps to take when creating an international business expansion strategy.

1. Create a market entry strategy

There isn’t a single right path to expanding to different countries: identifying the right strategy for your business takes extensive research and careful planning. It's important to choose a market entry strategy that aligns with the structural model that best fits the company's goals and resources.

These strategies vary in terms of their level of control, involvement in the local market, and level of risk, and may involve:

• Exporting (direct or through a third-party distributor)
• Licensing (providing a license to a local partner to produce and sell your product)
• Franchising (providing a local company with the right to use your business trademark and model)
• Partnering/Joint ventures (establishing a partnership with a local, well-known brand or starting an entirely new company together)
• Mergers and acquisitions (taking over a competitor in a new market)
• Opening a local subsidiary (starting a separate legal entity in the new location)

To make the right decision, you need to familiarize yourself with local compliance and tax laws. This way, you can make sure you have the financial and legal expertise to handle employment contracts, benefits, financial reports, tax documentation, and any other local requirement while setting up an entity.

It’s also critical to develop an exit strategy because leaving a market can sometimes be just as complicated as entering it. Collecting paperwork for opening a subsidiary can take up to four months, depending on the country, and closing it may take just as much time. Not to mention your responsibilities toward your employees.

Global Expansion

Looking to expand your business abroad.

2. Focus on talent planning and management**

Whatever your expansion strategy is, you will need experts you can trust to run your local business according to the plan and take care of your new customers. Building a global workforce and acquiring the best talent out there may be challenging, but it helps you create a solid foundation for international success.

Identify the vital positions that you need to fill and key the employees you can’t afford to lose. To complete these tasks with success, you should:

• Align your talent strategy with your corporate growth strategy, and don’t rush into hiring before carefully planning your headcount for the following period
• Equip your HR with suitable tools to plan, recruit, and manage global and local talent
• Involve executives in your talent planning strategy to ensure business goal alignment across departments and countries
• Support your talent acquisition efforts by exhibiting your company as a desirable global employer

Starting to hire globally?

3. choose a global employment strategy**.

When expanding to a new country, you need to choose how you’re going to hire workers in new countries. Typically, you have three  global hiring options. You can:

Hire independent contractors

• Hire through an employer of record (EOR) or
• Open a local entity

Hiring independent contractors is a quick and cost-effective way to build a global workforce. However, as a client, and not an employer, you don’t have control over how and when the contractor works for you, and you might struggle to gain intellectual property of the worker’s deliverables, depending on local laws.

Hire through an employer of record (EOR)

Outsourcing compliance, global payroll , and other employment legalities to an EOR can help you resolve the challenges of onboarding international workers quickly while managing their daily schedules. EORs ensure locally compliant contracts, employee benefits , taxes, and more, so you don’t have to spend time learning about local laws in every country you hire from.

The most common use case is to employ remote workers in other countries where the employer may not have an employing entity. This can dramatically expand access to talent globally for pretty much any company.

— Steve Hoffman ,

Senior Strategic Partnerships Manager

How Planhat hired more than 50 employees in 14+ different countries through Deel

Planhat is a customer success platform that helps companies manage client growth for customer success, product-led growth, and more by automating the admin for customer lifecycles.

Planhat has been remote-first since the beginning, with one founder living in the US and the other in Sweden. They soon realized that it made sense to hire globally, so they started looking for an efficient hiring solution.

“ With Deel, we can grow and cooperate together, they have the flexibility to support us in whatever we need. It’s become a true partnership with people we enjoy working with ,” says Sanna Westman, Head of People at Planhat.

Learn more about how we helped Planthat build a remote-first, global team.

Deel's Guide to setting up a local entity

Ready to open your own entity to continue operating in a foreign market? Learn about the steps you need to take, from initial research to tax registration.

Downoad the free guide

4. Identify resources and partners**

As business expansion is a costly undertaking, you should have secured funding options before you take the first steps.

If you work with investors, make sure your strategy is well-thought-out and corroborated with data and research, so you can make a compelling case for expanding to a new market and get their buy-in.

If you don’t have investors, look into other financing options, such as crowdfunding or debt-based financing, and create a budget. Thorough research will help determine when your initial investment could start paying off, so you can plan expansion activities accordingly.

Whether you need strategic partners on-site to expand the business, or you want to partner with organizations to provide competitive perks to your employees, identifying the right allies on the ground will help you jump over the expansion hurdles more easily.

Outsourcing payroll or HR to trusted local companies kick-starts operations in new markets as soon as possible. Local experts already have the required market knowledge so it will save you a lot of time and effort, especially when it comes to obtaining necessary permits, collecting documentation, drafting contracts, and onboarding employees.

5. Ensure a positive employee experience for your team**

Employee well-being strategies may be one of the most neglected parts of global expansion for many companies. Their main focus is on the technical aspects of doing business, and if they don’t tackle this issue in time, they may face low employee retention and employee happiness index.

During your target market research phase, you should be able to identify the most desirable employee benefits and perks in specific countries, other than the statutory ones. Determine how you can include them in your overall employee compensation packages to ensure competitive and attractive remuneration. Ideas to consider:

• Work-from-home stipend
• Flexible PTO
• Childcare support
• Stock options
• Health insurance
• Learning and development opportunities

Provide suitable tools and effective communication channels for your global (and remote) workforce. In global teams, it’s critical that people are enabled to work properly across cultures and time zones. It’s helpful to set up clear processes on how to communicate an issue, who to reach out to if your manager isn’t available, and more. Employee handbooks containing vital workflows and “rules” are also a useful way to speed up new hire onboarding and ensure everyone has access to all important information at all times.

Make sure you include different team-building activities in your plan and educate yourself about various ways to boost your remote team’s morale and keep them motivated and appreciated. That’s what brings productivity and results to the whole business.

Deel allows you to hire in over 150 countries, in almost 100 of which we own entities.

Our huge network of more than 200 legal partners and local payroll managers ensures full compliance no matter where you hire. With over 100,000 team members managed across 150 countries, we offer unmatched expertise and 24/7 support to empower your global growth.

Ready to learn how Deel works? Book a 30-minute demo with our expert team and come prepared: this is your space to ask any questions!

Need more time? Think about how risky is your target market. Instead of registering your own entity, consider lower-risk and lower-cost options like hiring contractors or EOR employees . Learn when each option works best.

About the author

Owen Yin is a content communicator specializing in decoding complex topics into an insightful language anyone can understand. Owen covers compliance, tax, and payroll topics, offering readers verifiable research that eliminates confusion and enables action. Owen’s work has been cited in Forbes, The Verge, CNN, Mashable, The Washington Post, and others.

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International expansion: 5 steps to build a winning global strategy

International expansion is a smart business move for companies looking to increase their market share and grow. But as you extend your operations beyond your domestic market into foreign countries, you’ll face numerous challenges.

You might need to open new offices, launch localized products or services adjusted to target markets, form partnerships, and more.

✅ Actionable insights, zero-fluff content This article is packed with actionable insights. You’ll learn what important economical shifts are happening right now and which markets are worth expanding into. You’ll also discover four modes of international expansion, a step-by-step guide to entering new markets, and why localization matters in the process.

International expansion beyond the U.S. market

When we think about the global economies, the U.S. market might pop into our minds first as the leading force. The demand is high across many industries, the buying power is solid. But you might be surprised to learn there are important shifts happening .

In a book called “Factfulness”, Hans Rosling , one of the most influential physicians and geographers, explains four different levels of income. He goes on to elaborate how the world is gradually improving in terms of standards of living.

Rosling also pointed out how we’re probably wrong about the economic forces in the world:

“People in North America and Europe need to understand that most of the world’s population lives in Asia. In terms of economic muscles “we” are becoming the 20 percent, not the 80 percent. But many of “us” can’t fit these numbers into our nostalgic minds.”

In addition, the book explains how by 2040, 60% of Level 4 consumers will live outside the Western world , meaning that markets once considered somewhat underdeveloped will take the lead.

That’s mind-blowing, isn’t it?

If you’re interested in international expansion, but you’re not sure where to start, keep on reading.

What is international expansion?

International expansion (or globalization ) is the process of expanding to foreign markets. The goal is to capture a greater share of the global market and increase revenue.

While international expansion is an exciting opportunity, there are many challenges to consider. Move too quickly, and you risk entering a market without a strong product-market fit. Move too slowly, and you risk losing out on key opportunities in favor of the local competitors.

The benefits of international expansion

International expansion can help you boost sales and revenue , and grow your profit margin. Additionally, it allows you to diversify business risk. You are spreading revenue across multiple markets which reduces reliance on one region. That’s also how you’re mitigating local economic downturns or market fluctuations.

Here are additional benefits of expanding your business internationally:

• Access to resources: Operating in multiple countries provides access to unique resources that may not be available in the home country. Think of a large international talent pool, technological advancements, or raw materials for certain industries.
• Faster innovation: Insights from different markets help generate new ideas and innovate, improving products and services faster.
• Competitive edge: As you expand internationally, your brand will increase its global visibility. This impacts your business in both domestic and foreign markets.

💫 Get inspired HiBob initially began its international expansion in the UK in 2016, and has since grown its presence throughout North America, South America, and Europe. See how they managed to save up to 50% of localization costs and decrease their time-to-market.

The main four modes of international business expansion

Selecting the right way to expand your business internationally depends on various factors. Your financial resources, industry, the level of competition, and the ease of market penetration are the key things you should consider.

See the table below to discover four modes of international business expansion.

In the early stages of planning your international expansion, you should ask yourself the following questions:

• Do I have the resources and infrastructure to manage direct exports, or would I prefer relying on local partners?
• Am I comfortable sharing my brand or technology with another business in exchange for fees, as in licensing or franchising?
• Would partnering with a local company help me better understand the market and reduce my risk?
• Do I want immediate market access and local expertise through acquisition, or am I willing to grow gradually?
• How much control do I want over my operations in the new market, and can I handle the complexities of different modes?

This is an important first step to figuring out what would be the best mode of international expansion for your specific business case.

5 steps to building an international expansion strategy

Expanding into international markets takes deliberate planning. Follow these steps to create an international expansion roadmap.

1. Recognize the challenges, time, and commitment necessary

Most companies struggle with international expansion, taking five years or more to see a return on their global investment. Five years!

Furthermore, the complexity that’s required to enter a new market is often neglected because companies don’t know any better. They treat l10n (localization) as an afterthought rather than an integral business process necessary for going global. This ends up costing a lot more in the long run. By integrating translation and localization early in the planning process, companies can avoid costly mistakes and better align their messaging with local cultures.

Successful international expansion requires time, patience, and commitment. Before embarking on an international expansion project, determine your goals and objectives and how you’ll balance the investments you need to make on a global level with the business you’re currently doing. You should also determine wheter you should take globalization or localization as the main approach.

💡Did you know? When it comes to international expansion, HBR determined that it takes 10 years to reach a modest +1% ROI , and only 40% of companies create more than 3%. The reason it’s so challenging? Many companies enter too many foreign markets too quickly.

2. Evaluate the opportunity to expand internationally

When expanding internationally, you need to think about the market-specific barriers. These include cultural nuances and norms, different languages, unique consumer expectations, but also technical limitations (e.g., outlet voltages or smartphone settings). 

More specifically, you need to look at market potential, costs of international expansion, as well as risks.

• Assess demand, competition, and growth opportunities (e.g., how large is the customer base, is the competition high, what’s the demand for your product or service)
• Identify costs of setup, operations, and market penetration (e.g., cost of marketing materials, localization, supply chains)
• Determine how much control you want over operations and decision-making (e.g., more control generally means better brand consistency, less control means more hands-off approach like with franchises)
• Evaluate political, economical, and cultural risks

Additionally, consider how software internationalization (i18n) can help you streamline the localization process, making it easier to adapt your products for diverse markets without significant overhauls.

🎥 How Netflix expanded globally Netflix grew its global value by 72% between 2019 and 2020, according to Forbes, and part of that is due to a careful international expansion. Rather than jumping straight into every market, they consciously evaluated each potential country for language, culture, and competitors — starting with Canada, the most similar market to their home country of the United States. Netflix partnered with companies like Vodafone to have a Netflix button on their television remote, making it seamless for customers in other markets to engage with the platform.

3. Conduct market research

With international expansion, proper preparation is everything. Remember all the work you’ve done to launch your business in your home market? Ensuring product-market fit, doing market research through focus groups and social media, testing your idea in the wild… You must be ready to do it all over again with a new market in mind.

Analyze demand

The first thing you need to do is analyze demand . Study through consumer needs and preferences, and make sure you understand current trends. You can use Statista or pay for reports on Euromonitor for market research. You can also test locally and run a small pilot or survey.

Evaluate competition 

Who are the key players you’ll potentially go against? Make sure you understand the competitive landscape and identify the total addressable market (TAM). You can use tools like IBISWorld or SimilarWeb for competitive analysis.

Regulatory compliance 

The next thing you need to do is understand legal, tax, and compliance requirements. Resources like Export.gov or World Bank Doing Business can be helpful here. Remember: ignorance of law excuses no one. If you fail to comply, you might have to pay fines, go through legal investigation, or operational shutdowns.

Understand cultural nuances

You need to explore cultural nuances and decide on your localization strategy. It’s useful to partner with local business associations or to check out Hofstede Insights . Their Country comparison tool gives you high-level insights on your target market, which makes it easier to decide if it’s worth pursuing or not.

This neat interactive tool allows you to click on any dimension title below the chart to switch between dimension descriptions.

4. Commit to continuous localization

Preparing for international expansion isn’t just about building new teams abroad; it’s about ensuring your current team adapts their processes and collaborates effectively with localization partners.

For example, your product team might have a sprint cycle that ships new software updates every week. With international expansion, you’ll need to create room in that process for localization. In fact, localization should be a part of your continuous delivery workflow so it doesn’t halt product releases. 

Your international expansion isn’t a one-off thing. Once you launch in a new market, you’ll need to constantly support your existence in that market.

This means that your marketing, sales, and support teams will become a part of localization. You’ll also need to create and ship new content in order to attract and retain customers in your new target market.

📚Further reading: Learn more about the value of marketing localization as you expand internationally.

5. Localize all touchpoints for a successful international expansion

Your international customers will interact with your brand in multiple ways. They might read your blog posts, visit your website, receive an email, read your social media posts, see your ads, talk to your support, and so on.

You need to localize the entire experience and carefully think about every single touchpoint. The importance of localization cannot be underestimated for a successful market launch.

[Bonus] Infographic representing challenges in international expansion

International expansion isn’t as easy as snapping your fingers and magically making your products available in other markets. To determine if you’re truly ready to become an international business (or expand your global reach into a new market), you need to be aware of the common challenges.

In the infographic below, you can see six most common challenges. From localizing currency and ensuring regulatory compliance to staffing, internationalization , and more.

International expansion and localization are easier with a system

When you plan on expanding to new markets, you’ll have different teams owning and managing parts of your market expansion strategy . And like we said, localization will play a crucial role here.

To successfully launch in a new country, you’ll need to ensure many different stakeholders stay on the same page. It truly takes a village.

Lokalise helps you successfully manage all your localization efforts in one place. No more endless back-and-forths between product managers, developers, marketers, and translators.

You’ll always know who’s doing what and the bird’s eye view will help you avoid costly mistakes. For instance, you’ll never get charged for the same translations twice, and you’d be surprised how often this happens with inefficient tools.

💡Pro tip: Not sure where to start with localization? Download our actionable localization checklist to make sure you’re on track.

We invite you to book custom Lokalise demo and see how to implement an interconnected continuous localization workflow at your company. Worst case scenario, you’ll get tips from our localization experts that you’ll be able to immediately apply.

If you prefer to poke around Lokalise on your own, sign up for a free 14-day trial . We don’t ask for your credit card details, so this is completely risk-free.

Lokalise’s customers report an up to 37% shorter development release cycle and 8 times faster translation delivery times. More than 3,000 companies from 80+ countries, including Notion, Lemonade, Bayer, and KPMG – use Lokalise for continuous localization. Join them today.

Talk to one of our localization specialists

Book a call with one of our localization specialists and get a tailored consultation that can guide you on your localization path.

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Craft Your International Business Plan: A How-To Guide

Are you ready to take your business across borders? International expansion is a great way for businesses to grow and succeed in new markets. But before you dive into an international market, there are specific steps you need to consider: crafting a strategic plan. Whether it’s determining the competitive landscape of a target country or understanding local customs and regulations, an effective international business plan can lay the foundation for long-term success while also providing guidance on how best to allocate resources and manage risks. But where should one begin? Let’s dive into it!

Analyze Potential Markets

In today’s global market, expanding your business into new markets can open up a world of opportunities for ecommerce revenue growth. To get ecommerce revenue from new markets , the first step is to analyze potential markets. This involves conducting market research to identify which countries or regions hold the greatest potential for your business. You can start by looking at demographic data, economic trends, and consumer behavior in different parts of the world.

Of course, you should also delve into the market-specific data. Analyzing the competitive landscape and potential barriers to entry is sure to determine which markets are most viable for your business. Additionally, understanding cultural differences and local customs can give you insight into how your product or service may be received in a new market. Businesses can now expand their reach and increase their revenue streams in ways they never thought possible.

Set Clear Goals and Objectives

Once you have identified potential markets, it’s time to set clear goals and objectives for your international expansion. These goals should align with your overall business strategy and take into account the resources needed to enter a new market successfully.

Do you want to increase brand awareness, generate more revenue, or establish partnerships in a particular region? Or maybe you want to expand into a new market to diversify your customer base and reduce risk. Whatever the reason may be, setting clear and measurable goals can guide your decision-making process and ensure that your international business plan is aligned with your long-term vision.

Develop A Robust Strategy

With potential markets and goals in mind, you need to develop a robust strategy for entering the international market. But how do you know which strategy will work best for your business?

Direct Exporting

Direct exporting involves selling your products or services directly into the international market. This approach can be a low-cost way to test the waters and gain valuable information about overseas markets without the commitment of setting up a physical presence. However, it does require careful planning and research. Consider your product’s suitability for the market, the logistics of shipping and delivery, legal and regulatory requirements, and how you’ll handle customer service.

Licensing and Franchising

If you prefer a more hands-off approach, licensing and franchising can be viable options. Licensing involves granting another company the rights to use your intellectual property, such as trademarks or patents, in exchange for royalties or fees. Franchising is similar but typically involves a more comprehensive arrangement where the franchisee follows your established business model and brand guidelines.

Joint Ventures and Strategic Alliances

Collaborating with a local business through joint ventures or strategic alliances can also be an effective way to enter a new market. This approach allows you to benefit from the other company’s expertise and established networks while sharing the risks and costs associated with entering a new market.

Mergers and Acquisitions

For businesses looking to make a big splash in the international market, mergers and acquisitions can provide a quick way to gain market share, access new technologies or products, and expand your customer base. These transactions require significant financial resources and due diligence to ensure compatibility and avoid potential risks.

Identify The Resources You Need

No matter which strategy you choose, entering the international market requires a significant investment of time, money, and resources. It’s essential to identify what you need to make your international expansion a success.

Consider the staffing and expertise needed to manage operations in a different country. Will you need to hire local employees? If so, do you understand labor laws and cultural norms for managing a workforce in that country? Will you need to partner with local vendors or suppliers? How will you handle language barriers and cultural differences? It’s also crucial to assess your financial resources and determine how much capital you’ll need for market research, legal expenses, marketing efforts, and other related costs. Secure funding or explore financing options early on to avoid delays in your expansion plans.

Consider Different Countries or Regions

As businesses expand globally, you must first understand the unique culture, customs, and laws of different countries or regions to effectively reach and connect with their target audience. For example, did you know that in Japan, it’s considered impolite to loudly slurp noodles? Or that in China, the color red symbolizes good luck and happiness? Or that in Germany, punctuality is highly valued?

When you consider the cultural nuances and preferences of your target market, you can tailor your marketing strategies, product offerings, and overall business approach to resonate with local consumers. This can go a long way in building trust and brand loyalty in the global marketplace.

Decide How You Will Marke Yourself Abroad

Now that you have a clear understanding of your target market and their cultural preferences, it’s time to decide how you will promote and market your business abroad. This can include tactics such as translating your website and marketing materials into the local language, partnering with local influencers or businesses, and utilizing social media platforms popular in that region.

Even consider any legal or regulatory requirements for advertising and marketing in the target market. In certain countries, there may be restrictions on certain types of advertising or requirements for labeling and packaging. Other countries may have specific rules for online advertising and data collection.

Venturing into the international arena can be a game-changer for your business, opening up new avenues of growth and diversification. The journey, however, is paved with its unique set of challenges and complexities.

A strategically crafted international business plan acts as the compass guiding you toward success. It entails rigorous market analysis, clear goal-setting, robust strategic development, resource identification, cultural understanding, and effective marketing. Such a plan ensures that your business meets the needs and expectations of your new customers, stands tall amidst global competition, and reaps the rewards of global expansion. Get ready to embrace an exciting journey filled with opportunities, learning, and growth. Now that you have a step-by-step guide in hand, the world is truly your oyster!

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International Business Expansion: Complete Strategy & Example

What's on this page:.

International business expansion involves taking your business’s sales, operations, and products outside of domestic markets and increasing its presence in a foreign country or region.

Tapping into global markets offers new business opportunities, secures a bigger customer base, keeps your business competitive, and helps create new revenue streams and growth opportunities.

Global expansion offers much to be won. But nothing worth having tends to come easily…

New regions often come with complications — legal, financial, and cultural, to name a few.

We asked Jonathon Ilett, VP of Global Sales at Cognism and Liam Bartholomew, Cognism’s VP of Marketing about the strategy that helped Cognism, a UK-based company, successfully expand into international markets in Europe.

What are some of the risks and challenges when expanding internationally?

Expanding into international markets often means dealing with a variety of different languages (24 official languages in Europe to be exact), distinctive cultures and slightly different ways of operating.

It’s much easier to say, ‘let’s expand into international markets’ than it is to actually do in practice, because you can’t blanket the same business strategies and messaging across each of these countries. They’re too different.

Your international business expansion strategy can’t be a copy-and-paste of your current GTM strategy . Just because this worked in one territory doesn’t mean it’ll work in another.

We’ve all heard the McDonald’s example, where they initially struggled to break into the Indian market due to a lack of cultural understanding. American fast food culture wasn’t instantly appealing in this new location.

Another example is the Chevy Nova - a very popular car in the States. So Chevrolet decided to bring the car to a Spanish-speaking audience.

What they hadn’t considered, however, was how the car’s name translated into Spanish…

It’s unsurprising that this car wasn’t hugely popular in Spain!

Now, you might think that’s a silly reason for a car to fail in a foreign market - and who knows if that’s really the reason the car didn’t perform well.

But the main point here is that many cultural nuances can impact the success of your international business expansion strategy, depending on native perception.

You can’t make assumptions about what will or won’t work for your business in a new environment.

Regional GTM strategies require special thought due to:

• Market maturity.
• Process sophistication.
• Language differences.
• Legal practises.

What factors to consider when expanding a business internationally?

International expansion presents a great growth opportunity for your business. But how do you know if you're ready to move into new global markets?

Here are a few signs to consider:

• You have a significant or growing portion of your conversions coming from an international audience.
• Entering the global market can help generate new revenue streams.
• The domestic market is becoming saturated, and growth is plateauing.
• You’re in a healthy financial position, with strong profits and positive cash flow (global business expansion requires upfront investment, and having financial stability will be crucial for navigating initial challenges!).
• Your current operations are running smoothly and efficiently - your existing business is well-established and can handle the additional demands that come with growth.

How to expand business into Europe?

Liam Bartholomew, Cognism’s VP of Marketing, said:

“The main thing to look for is demand. Before we internationally expanded into new regions in Europe, we’d be noticing a percentage of our opportunities and inbounds were coming from this place.”

“It was slightly different when we first expanded into France. We purchased Kaspr , which was an already established business in France. So we knew that they had demand there already.” “And when we decided to move into DACH, one of the main motivators was a lack of competitors in the market.” “But as soon as there’s a sign that there’s demand, that’s a big reason to look into moving.”

How to conduct market research for new market entry?

Liam suggested a way to test out a new market before making the jump:

“We sometimes run ‘R&D spend’ - as we call it - in different countries and when they hit certain benchmarks, i.e. x number of opportunities from a country based on the small amount of spend then that’d trigger a threshold for expansion.”

When creating a strategic expansion plan, you need to take several factors into account:

• Is your business ready?
• Is the market ready?
• Is there enough indication in other markets that it can support your expansion?

That’s where on-the-ground research in new regions comes in.

Creating an international business expansion strategy: Step-by-step

Step 1: market research.

It’s easy to say you’re going to move into a new region - but where? And once you’ve got a new country in mind, how do you confirm it’s the right choice for your business and international expansion strategy? 

At this stage, thorough market research is your best bet. That way, you can conduct a thorough market analysis and risk assessment.

“There’s loads of research that should be carried out before you make the leap into global business expansion.”

Here are some important areas you need to deep dive into:

Opportunity analysis

Is there a genuine opportunity in this region that can drive sustainable growth? Can you be successful by putting resources here?

Do the people in this new region operate in the same way as your ICP at home? Do they have the same pain points? Would they use your product for the same use case?

At Cognism when expanding into Europe, this was key. Liam explained with this example:

“In DACH, you need double opt-in consent to email someone. Therefore, the email data available in the Cognism platform isn’t compliant for them to email to.” “Pushing how Cognism has email data in DACH wouldn’t make any sense. So it makes more sense to focus on phones, mobile data and enrichment.”

Another example:

You could use the Cognism product for a demand gen approach by creating lists of contacts for targeting your ICP with relevant content.

However, if marketers in Germany or France are still more focused on lead gen, then messaging about demand gen wouldn’t make much sense there.

ICP interviews in your new region are imperative for building your international business expansion strategies. There’s no space for assumptions.

How would your product fit into their working lives, and does that match how you currently market your product?

Is there a way to market your product so that it does appeal to their particular circumstances?

Liam gave us some questions you should ask your ICP during these exploratory interviews:

• If you’re having a problem with (insert problem you solve here) where would you go for your information?
• What tools are you using for x, y and z?
• What does your current workflow look like?
• What content do you like to consume?
• What are the main challenges in your role?
• How do you like to be marketed to?

“You need to build your ICP in this region from scratch.”

If the results from your interviews indicate demand for your products or services in this new region, and there’s a gap in the market that your company can fill, it’s a positive signal for international business expansion.

Talent analysis

Arguably, one of the most important things you need when expanding internationally is local knowledge and industry-specific talent.

If the McDonald’s and Chevrolet examples have taught us anything, it’s that it pays to understand the local culture and language.

Jonathon Ilett, VP Global Sales at Cognism, said:

“Your base should be around the available talent pool. Where are the hubs for talent in those regions, and are they accessible? That’s the key one for me.”

And we don’t just mean local tour guides or translators who know the area.

We mean local experts in your niche. You need someone who understands your target market, their problems and needs. Who can advise you on whether or not your messaging will resonate well in the region?

If we hadn’t had this local expertise early on in our expansion into Germany, for example, it would have taken us a lot longer to realize that the German B2B buyer journey was a few years behind the UK in terms of development.

That meant when we expanded into Europe, we could adapt our business strategy to reflect this from the beginning, saving us a lot of time, resources, and stress!

So the first thing on your list when it comes to international business expansion should be talent acquisition and asking yourself ‘can we get the right people on the ground to get our GTM motion off to a solid start in this region?’.

Jonathon said:

“Focus on the skills they have rather than the title; people who do similar jobs and have similar responsibilities might be called something different to what you’ve heard them called.”

In other words, job titles might not match up to titles you’re used to. For example, CROs are super common in the States, but are only just starting to pop up in Europe.

Jonathon added:

“A top tip for hiring in Germany: almost all first-time hires in entry-level positions are all still doing their degree. So if you’re hiring SDRs in a new region, it’s good to partner with universities to get the talent.”

What this boils down to is doing your research and being prepared before you start your international business expansion. You want to understand the region you’re moving into as much as the one you’re moving from.

Step 2: Competitive analysis 

As we discussed above, your business is looking to find a gap in the market and provide a competitive edge. Hopefully, that means there’s not a lot of competition - but in an increasingly competitive world, having no competition is becoming increasingly rare.

“You should look to pin down the other competition in the market. What are they charging? What do they offer? Who are they targeting? How could you position yourself in the market next to them to stand out?”

Here are some steps you can take to understand the current players in the global market:

Identify key competitors

Begin by identifying your direct and indirect competitors in the international market. Look for companies offering similar products or services within your industry.

Create a list of ones you’re going to keep an eye on. And continue to keep your eyes peeled for future market entrants.

Understand market dynamics

Analyze the global market conditions and dynamics in the countries you want to expand into.

Consider factors such as market size, growth trends, and any specific challenges or opportunities unique to the region.

Segmentation and target audience

Break down the market into customer segments and identify your target audience within each segment.

Take the time to deeply understand the preferences and needs of these segments. Then you can tailor your international marketing strategies effectively.

Product or service differentiation

Evaluate how your products or services differ from your competitors. This is an integral part of your international business expansion strategy.

Identify unique selling propositions (USPs) that can give your business a competitive advantage.

How can you make yourself different from others in the market? In other words, why would customers choose you?

Pricing strategies

What prices are your competitors charging? Do they have similar products for a similar price point? How does your pricing compare, does it align with the market norm? 

Marketing and branding

Study the marketing and branding strategies your competitors use so that you can craft your branding and marketing messages to local preferences. 

Examine their online and offline presence, messaging, and positioning. What are the strengths and weaknesses in their marketing approaches?

Also, study successful marketing in this country in general. What are the common themes of things that work? This will inform your international strategy.

Step 3: Make sure you’re legally compliant

This is a super-important bit to get right when you’re considering international expansion.

“Like I mentioned earlier about how our email data isn’t compliant in DACH due to their strict double opt-in rules - there might be ways in which you’re operating in other jurisdictions that you can’t do in this new region.” “You need to make sure that you comply with all the local regulations before you start selling.”

Each country applies these regulations slightly differently, and we had to consider these legal practices when expanding into Europe.

These include:

• GDPR and data protection.
• Employment legislation.
• Corporate taxation rates.

The GDPR is very important to understand as it can land you in serious hot water if you don’t comply.

While GDPR laws apply to all EU countries, how the GDPR is interpreted across those countries can vary, emphasizing the need for local legal knowledge.

This is especially important for those organizations hoping to build local sales and marketing teams in new regions, as you may not be able to operate in the same way as you do in your HQ country.

Arguably the most important compliance consideration, however, is where your data is hosted.

If you’re operating in Germany, for instance, you’ll need to guarantee that your German business data never leaves the country.

Employment legislation

Employment law can also be complicated and is far more likely to vary from country to country. This was something Cognism had to consider when expanding into Europe.

Liam advised:

“You should get professional advice before you hire in a new place. Some countries have much stricter rules on what you’re allowed to do regarding hiring and firing.”

For example, in the Netherlands, ending a permanent employment contract unilaterally is not allowed.

As a result, the majority of employment agreements in the country are typically agreed as fixed-term contracts rather than indefinite ones.

And in the UK, notice periods for terminating employment are generally shorter than in other European countries. It’s common for employers and employees to provide one to three months’ notice.

Whereas in Germany, notice periods can be longer, with a standard notice period of four weeks, but this can extend based on an employee’s length of service, reaching up to seven months for long-term employees.

Another thing to take into account is that in some countries, like Germany, employees can set up workers’ councils.

Jon explained:

“Employees can set up workers councils if there’s enough people in the region and you have a German entity (five or more fully employed staff).”

Essentially, a workers’ council is elected members of staff who have a say in influencing workers’ rights and compensations. Such as increasing wages, workplace conditions and more.

Employers are legally bound to give these workers’ councils information, and they have a right to negotiate new terms.

Corporate taxation laws

This is a biggy, which if got wrong can lead to financial penalties and other punishments that we’d all rather avoid!

Each European country will have its own rules and regulations for businesses operating within them, leading to different tax rates.

Portugal, for example, had the highest combined corporate income tax rate in 2023, reaching 31.5% .

Whereas Hungary had the lowest combined corporate income tax rate, reaching just 9% in 2023.

“Even if you’re selling remotely into a region, you might be liable to pay VAT or sales tax.”

Engaging with legal professionals who are familiar with the specific jurisdictions you’re entering is essential to ensure a smooth and legally compliant expansion into Europe.

Step 4: Identifying the cultural considerations

Culture can be so nuanced and isn’t necessarily written down in a textbook for someone to learn. So, arguably, this is even more complicated than the previous points when it comes to international business expansion.

Understanding cultural norms is important if you want to avoid accidentally alienating people in a new region and business environment, whether they are those you wish to employ or those you hope to sell to.

For example, at Cognism when expanding into Europe we found that when it came to outbound sales - communication styles in Germany and Switzerland often lean towards being more direct and to the point.

However, in France and Spain, a more indirect and nuanced approach is more common. And British audiences generally appreciate a process that builds on relationships.

Realistically, this is something that takes time to learn - however, you can speed up this process by bridging the gap with native speakers.

“Whenever we have expanded into a new country, we have always had a leader on the ground who has experience selling into that region. Rather than trying to cookie cut what we have working in the UK or US.”

“In other countries, people have different workflows and different ways of communicating. And the whole buying process is just different. So you need that local expertise.”

When it comes to becoming an attractive place to work, it can help to understand where you stand within the cultures in the workplace.

For example, most businesses in Spain will shut down for the whole of August, and employees are expected to take the bulk of their holiday dates within this month.

So, a company offering more flexibility with holidays has an advantage in attracting talent.

There are so many cultural considerations to consider when it comes to international business expansion - and each will vary from country to country. So we can’t cover all of them here.

Our best advice is to have people on the ground from the beginning who understand the landscape, language and culture so that they can help you learn fast.

Step 5: Localizing your marketing strategy

At Cognism, we made the switch from lead gen to demand gen a few years ago, which means: 

We have no gated assets on our website generating leads for sales. Instead we deliver all our content up front, friction-free.

We prioritize providing our audience with value, maintaining regular contact through our  ‘value loops’ until they’re ready to buy and come in-bound to us (e.g. request to speak to sales/a product demo)

We want to operate like a media company. Distributing content around what we want to be known for on multiple channels where our audience hangs out.

This delivers value-led or entertaining resources and content that educates and builds brand affinity with our ICP and target market, ultimately, helping us generate demand for our brand and product​.

That means, when it comes to expanding into new regions, the most crucial aspect of localizing your international business expansion strategy is this:

It’s about more than just translating your content into another language.

“Translating content will only get you so far. It’s about creating regional-specific content. Content that’s written specifically for the needs, pain points and circumstances in that place in the language that they speak.”

In other words, you’re not just publishing the same things that you did back home. There’s no guarantee that what worked there will work in your new target market.

You want to establish an international presence. We have created regional-specific content and marketing materials focused on needs, pain points, customer preferences and circumstances in the regions we are targeting in the languages that they speak.

That means, you need to refer back to your research before the move. What did you find out about your ICP in this country?

Then, create dedicated content and marketing strategies to reach those customer bases.

Yes, it’s more work - but you’re far more likely to succeed when you make an effort to speak directly to the people you want to target.

In that same vein, you equally can’t just assume that the channels you used before will be the right channels in this new country.

“Different countries will have different variations of channels. For example, in DACH, there’s Xing, which is a competitor to LinkedIn.”

“Some countries use different search engines. Google isn’t as dominant as it is in the UK.”

“Again, speak to customers. Find out where they get their information and content. Where do they spend their time inside and outside of work?”

Step 6: Building out your international marketing strategy

So you’ve decided which country to expand into, and you’re ready to put out some digital feelers to see if it’s a viable plan.

Here are some steps that Cognism’s Senior Demand Gen Manager, Jamie Skeels, suggests for dipping your toe in the water and developing your market entry strategy based on what we did when expanding into Europe.

1. Validate demand with Google Ads

Set up Google Ads campaigns targeting high-intent keywords (competitor terms and keywords with clear buying intent for your product).

Jamie says:

“Google Ads is a bottom-of-funnel, demand capture channel. By targeting these keywords, you’ll reach a problem-aware or solution-aware audience, likely with buying intent.”

You can use these Google Ads to:

• Gauge if there is pre-existing demand to be captured.
• Understand what degree of product and message market fit you have in that region.

2. Expand demand capture efforts with LinkedIn retargeting

If you have a large enough retargeting pool for this region, you can start serving them tailored retargeting ads on LinkedIn.

“You can retarget in different ways. Common audiences include previous website visitors, previous engagements with other ads or video views.”

This is another ‘safer’ way to test the waters via paid ads with a warmer problem or solution-aware audience.

This will help you to validate if there is pre-existing demand to be captured.

It will also help validate that there are multiple online channels where you can easily reach buyers in this new region.

3. Experiment with cold LinkedIn Ads campaigns

If your Google Ads and retargeting campaigns are performing well, we’d recommend then building out some cold audience campaigns.

The goal is to build your retargeting pool and grow your awareness with a wider audience in the region.

We have dedicated teams for DACH and France who produce regional specific content and campaigns to specifically target prospects in these countries. 

4. Creating thought leadership content

Start creating thought leadership content based on the accounts you are engaging with and your ICP. 

Our content strategy in France was as follows:

• Localize what has been successful in other regions. E.g. creatives, landing pages, blogs.
• Identify key topics for the French market and position ourselves on them.
• Work with key influencers in the market to feed our media machine and gain awareness
• Collaborate with French companies in the same industry and create content together.
• Run regional live events.
• Have partnerships with French SMEs.
• Target organic LinkedIn posts to this region.
• Produce blog content in French.
• Create regional-specific paid ads.
• Run podcasts.

The DG team in France used its media machine to build awareness and accelerate deals.

For example, Le Ring is a sales-focused podcast aimed at France, using French subject matter experts and influencers.

The DG team invited the Head of Partnerships from a target account onto their podcast and organized a content collaboration project.

In addition, they partnered with other well-known companies in the region to host a joint live event and invited the Head of Sales from this target account to join.

Involving and engaging with these key stakeholders in this way  helped close a new six-figure deal.

Measuring the success of your international marketing strategy

How do you know if you’re on the right track with your international business expansion strategy and achieving your business goals?

Senior leadership and other stakeholders will undoubtedly be keen to see this venture succeed… So how can you measure performance and report back?

“The hardest part is setting yourself benchmarks to begin with - but you just have to estimate what success for you might look like at each stage of your business expansion.”

“Look at the market’s maturity, how many competitors are there, whether or not people are solution-aware and problem-aware.”

“From that - if you have one to compare to - compare it to a market you’re already in. And work out your best guesses on your cost per SQO and cost per lead. Then what your targets should be.”

Essentially, what pipeline and revenue targets are realistic based on all the related factors?

Liam added:

“Then it’s pretty similar to your measurements back home. Looking through the funnel and at your key performance indicators. How many inbound demo requests are you getting? How many meetings are booked and attended? And then also looking at your engagement metrics.”

Another vital thing to measure when trying to establish a brand internationally is brand awareness , recognition and what that brand is associated with.

Drew Leahy, Head of Product Marketing at HockeyStack, said:

“If you have, say, five associations you want people to hold with your brand, and you want to find out how you measure up to them right now. Go out and find a baseline.”

Ask your customer base and your prospective buyers questions about:

• What they think you sell.
• What words they’d use to describe your business.
• What reasons they think someone might buy from you.
• What content or adverts they’ve seen from you that they recall.
• Use this to help you build a brand campaign to improve any areas that are lacking.
• Then ask them again in 6, 9, or 12 months to see if you discover anything different.

Here are some of the results we've seen here at Cognism when expanding into Europe:

• The French region is scaling quickly, considering we have only really been in this region for about a year or so.
• The Top Flop webinar started with 65 registrants and 31 attendants in October, now we are at around 250 registrants and more than 100 attendees in March and April.
• MQLs at 229% of target.
• Pipeline at 304% of target.
• And revenue at 329% of target.

Step 7: Localizing your sales strategy

When expanding your business internationally, understanding the fundamentals of your outbound engine is vital.

For Cognism, when landing and prospecting into EMEA, this meant an in-depth look at:

• Our segment/region.
• Quota and targets - are you driving the right behaviors for your SDR team so they’re hitting their number and contributing to the revenue goal?

As a hypothesis, let’s say you’ve got an SDR team of 20 that is going to prospect into EMEA. Your target list consists of 50,000 accounts.

With the right outbound infrastructure, where you focus those 20 SDRs, there will be a difference in revenue between $100k and $10 million.

It’s fair to say there’s going to be a lot of testing and experimenting along the way. 

That’s why it’s vital to document everything—make a note of what works and what doesn’t at each step of the process.

Let’s take a look at the key areas to start with:

Defining your ideal customer profile

What does your ICP look like in your new region? Who are your target customers and who is going to be the ideal users of your product?

The answer to these questions isn’t particularly groundbreaking - you just need to ensure your sales team are having as many conversations as possible.

It was a fundamental part of our journey. Back in 2018:

• Our reps were measured purely on a meeting attended target because we wanted them to talk to as many people in our target account list as possible. 
• We didn’t know our ICP - at all, and we didn’t have a full, operational structure. 

Now, we have an ABM model because we know exactly who our ICP is. Because of this, we can use hard data such as ACV, retention rates, and sales cycle data to determine the accounts to target.

Aligning messaging

Effective product messaging for a go-to-market sales strategy boils down to this:

Communicating the value of your product or service to your ICP in a way that resonates with their pain points.

Start by listening to Gong recordings of sales demos with prospects or shadowing sales reps live.

Pay attention to the language they use about their pain points and ambitions. 

In Gong, you can also search for specific competitor names and review how prospects perceive them.

You can support this by taking words and phrases from case studies/G2 reviews and building your messaging around them.

Next, you must understand your competitors’ messaging on their sites and review how they position their product offerings.

With this info, you can define your USP and how it compares to the competition.

Once you have this, you need to develop a brief for executives, including the key takeaways about your competitors’ positioning compared to yours.

Here, you must lay out which personas you’ll speak to and how to address them.

Finally, to set your messaging in stone, you need to organize a call with key company executives and come to an agreement.

Making sure you remain GDR-compliant

As we’ve already outlined, every country is going to have slightly different compliance laws. 

This was one of the main things Cognism had to consider when prospecting in EMEA.

For example, the United Kingdom has Do Not Call Lists: a registry that gives individuals a choice on whether they’d like to receive telemarketing calls/cold calls. 

As well as this, the General Data Protection Regulation came into effect across the whole of the EU and the EEA in May 2018. 

This is a privacy law that aims to give citizens more control over their personal data, and does so by providing some robust data protection measures. 

The GDPR sets out ways companies must process and protect the data they hold about their clients and potential customers.

Let’s take cold calling as an example - GDPR does govern how personal data, such as phone numbers, can be used to make cold calls.

Under Article 6 of the GDPR, there are six laws that allow sales and marketing teams to use personal data:

• Explicit consent from the customer to use their data.
• To fulfill a legal obligation.
• To fulfill a contract with a customer.
• To carry out a task in the public interest.
• To protect the vital interests of an individual.
• To pursue legitimate interest. 

Remaining GDPR-compliant data is a must for sales teams.

Creating an outbound cadence

When expanding into Europe, Cognism created a prospecting cadence that reflects the behaviors of modern day B2B buying - prospects use more than one form of communication. 

This cadence was as follows: 

Day 1: LinkedIn Connection Message; Call; Personalized Email

Day 3: Phone

Day 6: LinkedIn Voice note

Day 8: Phone

Day 10: LinkedIn Research (e.g. like/comment on an article)

Day 12: Personalized Email with Vidyard

Day 16: Phone; WhatsApp/Text 

Day 30: Breakup Email

Your cadence might emphasize one channel more than the other, but just remember to meet your buyers where they are in each specific region.

You’ll also notice that the phone is a common outbound channel in this cadence. We’re huge believers in cold calling - it’s an effective way to have a direct conversation with prospects.

Using this cadence saw a 20% increase in meetings booked, and reached 103% of meetings booked target.

Step 8: Setting up your operational processes

When it comes to international business expansion, there are many things you need to consider from an operational perspective.

Many businesses often encounter challenges when managing customer data, processes or communication when expanding. Operating with multiple systems can create data silos and lead to inconsistencies and inaccuracies.

That’s why setting up your CRM correctly is key.

At Cognism, we made a considerable effort to sketch out our ideal customer journey flow in our CRM. The key was understanding the buyer’s journey from the start, when a prospect first learned about Cognism through marketing, to the sales process, and then to customer success.

Cognism created an authoritative source of truth for all our GTM teams, including dashboards for all ICs, managers, regional heads, and global leaders, based on the region/role matrix we have in our Salesforce.

When getting started, the first thing you want to do is define your different roles and job titles in Salesforce.

As Antoine Cornet, Head of Revenue Operations at Cognism, explained:

“If you’re a UK SMB AE, that will be different to a mid-market AE in France, so setting those role definitions up to compare your team's performance is important.”

You also want to set the right quotas for your teams and ensure your capacity planning is in place.

This means understanding how much revenue your territory is currently generating and your growth expectations. This information can then guide which resources you will pour into those regions and help map out your hiring plan.

Next, you need to set up your routing rules and establish which MQLs get routed to which representatives and craft books of business for your AEs and SDRs.

As Antoine also explained:

“You want to perform a territory-sizing exercise in your CRM. This means defining your ICP and the number of accounts that fall within it so people can focus on the best-fit accounts.”

International business expansion: the last word

Expanding your business into any new region isn’t easy - but success really just comes down to being prepared.

Doing deep research into the marketplace and ICP.

Creating dedicated content and campaigns that speak directly to those target segments.

And bringing in the expertise you need to learn fast and stay compliant.

That way, you can execute your international business expansion strategy as smoothly and effectively as possible.

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Business success is rarely an accident. Strong sales and growth stem from careful analysis, methodical planning, and strategies that account for the full spectrum of business considerations. These things are particularly important when expanding internationally—but having a clear understanding of the challenges and opportunities that lie abroad can help company leaders realize the growth and revenue they seek.

When it comes to international expansion, companies generally utilize one of two main growth methods—organic growth or growth via mergers and acquisition.

Expansion Through Organic Growth

For some companies, the most lucrative and effective approach for international expansion may be through organic growth and the creation of an entirely new production or sales entity in an entirely new market. There are, generally, three primary models for this type of growth:

• Selling products or services in the new market: This requires the company to acquire new customers in that market and develop payment methods tailored to that local customer base. As such, the company must refine its sales strategy to take into account cultural differences and local practices; for example, communicating in the primary language in the region or understanding best practices for brand awareness and advertising.
• Creating a production entity in the new market: This raises considerations like satisfying requisite licenses and securing access to local infrastructure. With a new point of production, the company must integrate the new entity into its existing supply chain; it must also assess the advantages and challenges of human capital and technology that are unique to the local market.
• Constructing a near-self-sufficient entity in the new market: Producing and selling to the new customer base requires an end-to-end understanding of the local market, as well as focused quality control and supply chain strategies.

Each model raises numerous interdependent factors, with cascading implications that can be grouped into the challenges and advantages of operating in a new market.

Operational Considerations

If your business is growing organically, you must first decide the level of local autonomy for your new entity. Depending on the results of that assessment, your company must decide whether your existing business strategy suits this new entity or whether you need an amended strategy tailored to the specific market.

Any entity in a new market also needs to identify how it sources goods and determine whether to work with local, regional, international or even intercompany suppliers. These decisions include the currency in which suppliers will be paid, as well as implications for days payable outstanding (DPO) and order-to-pay cycle.

In line with these concerns are possible changes to the cash management structure. Companies should weigh the following questions:

• Can your centralized treasury function serve the new entity?
• Can your domestic bank support your international operations?
• What technology will be used to communicate between your domestic and international treasury operations?

Technology use is a key consideration when growing organically. When it comes to visibility, reporting and supply chain management, your new entity may be able to rely on the technology used by the rest of your business—but it may not. In some cases, you may need to make technology investments that optimize operations in your new market and then align reporting channels and technology platforms with HQ.

Finally, it will be vital to assess how tax and legal requirements will impact both your new entity and the larger organization. In some markets, additional reporting may be required, and local regulations can dictate the need for local funds retention and/or restrictions on international transfers and loans.

Local Challenges and Opportunities

International expansion requires thoughtful consideration on a number of fronts. For example, how can your new entity reach and serve your new customer base? Which credit terms and payment methods will you offer local customers? Company leaders should determine whether local sales strategy should be aligned with the global brand or tailored to the local customer. This will then guide your strategy for growing brand awareness.

Employment laws also vary across the globe, raising implications for the ease and cost of hiring and firing. Other varying regulations, such as those related to health and safety, may require added costs for legal advice. However, while a new environment can bring new costs, it can also offer new cost-reduction opportunities. Some governments, for example, may provide incentives for locating operations in areas where there are ongoing efforts to regenerate or grow the local economy.

Expansion Through Mergers and Acquisitions (M&A)

For some companies, international expansion may be better achieved by acquiring an existing entity and integrating it within the originating company. This inorganic approach raises considerations related to integrating and harmonizing strategies and tools for the larger organization. Factors like supply chain optimization, cross-border payment terms, cash visibility, access to liquidity, and bank payment and credit terms must be aligned so that the entire entity can realize the greatest benefits.

There are four main M&A models:

• A vertical merger: This reshapes the organization to align with the acquired firm while managing sales to existing customers and integrating the supply chain.
• A horizontal merger: This reshapes the acquired company to avoid duplication and to create efficiencies, streamlining the brands, processing, production and other supply chain functions. This also brings in new suppliers and customers while deepening the acquired firm’s relationships.
• A concentric merger: This reorients the sales strategy to target all customers and suppliers, thereby increasing production and sales efficiencies.
• A conglomerate merger: This integrates new processes into the company overall, operating in all markets in ways unlike the premerger entities.

Considerations for M&A Growth

Any inorganic model can bring your business new opportunities for improved efficiency and cost savings. By leveraging the power of a larger organization, the company can find efficiencies, optimize procure-to-pay cycles and realize better payment terms. As a part of this approach, harmonizing electronic payment methods can create vital improvements for working capital and risk management.

The new, larger organization can potentially reduce costs by improving the international coordination of credit agreements and trade financing solutions. Likewise, harmonized technologies can yield the kind of inventory and manufacturing process visibility and management capabilities that allow headquarters and local managers to capitalize on new opportunities.

Inorganic growth also has the potential for significant impact on the sales strategy, raising considerations for increasing efficiency and data management, and ensuring that all sales channels are linked to the same enterprise resource planning (ERP) system. At the same time, customer loyalty programs should be streamlined to appeal to the expanded customer base. Centralizing distribution channels should form a part of the revised sales strategy—this includes credit terms and payment channels for customers and growing the customer base through greater brand awareness and customer outreach.

Technology impacts all of the above. An enlarged organization may lead to fragmented technology systems; while system differences may not be burdensome in the short term, it's important to consider the hard (versus intangible) cost implications of labor-intensive processing—both now and in the future.

Crosscutting Growth Considerations

In addition to these considerations, businesses must weigh a range of crosscutting factors that emerge regardless of the type of growth strategy used.

One primary business decision should be whether your company sells or receives payment in foreign currencies. A key consideration should be how your company plans to satisfy discrepancies between payments and revenue. Does it make more fiscal and strategic sense to sell and receive in the local currency, or to convert currencies—perhaps relying on a third party to manage those conversions?

As businesses cross borders, they must also consider payments-on-behalf-of (POBO) or receipt-on-behalf-of (ROBO) structures. Centralizing functions can make payment and collection processes more efficient, creating economies of scale and reducing the number of bank accounts and associated costs. There are also implications and questions regarding liquidity structures. It may be that your company does not require a liquidity structure immediately, but it's important to consider creating a stand-alone account structure that can grow into a liquidity structure if the need arises in the future.

Perhaps one of the greatest challenges a company can encounter when expanding beyond their home market is adapting to local culture. Calculating foreign currency exposure and counterparty risk can be straightforward for most treasurers and chief financial officers; it’s more difficult to understand the impact that cultural differences can have on operations, sales and opportunity. Particularly in the case of M&A, companies may encounter resistance to change, raising questions such as: How does your company manage resistance to new ownership? How does your company establish effective processes for sending and receiving documents in various languages?

International expansion is at once challenging and exciting, and deciding on whether organic or inorganic growth is the best approach for your business hinges on multiple important factors. But growing businesses can find support and insight by working with organizations that have global reach and local expertise—and by doing their research to become deeply versed in these multifaceted challenges and the rewards they can bring.

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International Business Expansion Checklist

The advent of the internet age has made it easier than ever for companies to expand their borders, working around the globe. International expansion is important for companies around the world, and making that switch can take your business to the next level.

Right now, 72% of small business executives expect to take on new international customers. Upward of 43% are expanding their businesses for access to higher-quality suppliers and vendors, while 42% are seeking higher-quality talent in global markets. Does your company have what it takes to go global? Review our global expansion checklist to see the factors you need to consider when expanding your business internationally.

What to Consider Before Expanding

There are four major criteria you need to consider before making the first steps toward global expansion: culture, legal barriers, government procedures and business cases.

First, look at your own culture and the cultures in the markets where you’d like to expand. Does the product or service you offer add value to local markets? Have you taken the time to understand the people living in that community?

Next, look at the legal and regulatory barriers you might face during your expansion. Can your business work within local laws and regulations? Do you have a legal team in place that can review and identify possible barriers you could encounter?

Local government procedures are also a challenge you may end up facing during your expansion phase. What are the currency exchange rates? Can you gain access to the necessary resources and materials in your new area, or will you need to source these elsewhere? Are there any protection policies for businesses that you’ll need to be aware of?

Finally, make a case for your business. Can you provide justification for undertaking this expansion? Is your business capable of responding positively to the challenges of overseas expansion? Before you make that leap, consider performing market and financial feasibility studies to ensure you’re ready to tackle any challenges that might occur.

Your International Business Expansion Checklist

Now that you know what you need to consider before taking your business global, what belongs on your expansion checklist? Here are a few tasks to add to your international business expansion plan:

• Collect data and analyze the market.
• Define goals and develop a high-level strategy.
• Select an expansion strategy.
• Prepare your product for the new market.
• Adapt your company’s organizational structure.
• Define your localized marketing strategy.
• Set up compliant legal processes.
• Prepare tax and financial statements and processes.
• Define your budget.
• Network with local businesses.

This isn’t an exhaustive list by any means, but it provides the foundation for most global expansion plans. If you want to make sure you’re taking each step correctly, we’ve created this international expansion checklist for you and your leadership team.

Also – learn what NOT to do when expanding globally with our “10 International Expansion Mistakes to Avoid” eBook.

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What Is Global Expansion? A Definitive Guide

Discover everything you need to know about expanding your business internationally - from strategy to planning to execution.

TL;DR Global expansion is a business growth strategy that involves entering new markets abroad. When carefully planned, it can increase profits, reduce risk, and help you grow your business fast. As the world is more interconnected than ever before, even the smallest of companies can now take their business global.

Companies big and small are expanding their operations abroad—and with great success. These companies continually discover that global expansion nourishes their revenue growth. 1 And it may enable your organisation to tap into promising and lucrative new markets, diversify your product offerings, and build a world-class team. 

Yet, every company expanding globally must contend with a series of challenges as they enter and adjust to a new market (and its laws and regulations). Even heavy hitters like Home Depot and Mattel experienced failure in some regions when attempting to expand internationally. 2

That’s why we’ve put together the ultimate guide to global expansion to help support you through the entire process. From initial consideration to launching your business abroad into a global market, you’ll discover the information you need to make your expansion effective and long-lasting.

Below, we’ll break down the complex topic of overseas expansion into easily digestible and referenceable sections. We’ll cover the best strategies for international growth, localization, company culture, and more—all so that you can feel confident in your decisions and move forward with a robust plan of action.

Use our contents table to find exactly what you’re looking for.

What is Global Expansion?

Global expansion is a growth strategy that involves taking business operations, products, and services from a home market into target markets abroad. It’s also referred to as “international expansion,” “overseas expansion,” and “foreign expansion.” 

While some businesses may choose to expand one international market at a time, others opt for regional expansion, taking advantage of cultural similarities and free trade agreements. Similarly, there are many different approaches to foreign market entry, including exporting, franchising, acquisition, and setting up foreign subsidiaries, among others.

Ultimately, global expansion will look different for every business at every stage of its growth. There’s no one-size-fits-all solution, and businesses have to continually revisit their approach to accommodate for change. That’s why planning a solid global expansion strategy that’s unique to your organisation is the key to your international success.

Types of Expansion Models 

Before moving forward with international expansion, it’s important to figure out what type of model to follow. Based on your business, one type of expansion strategy may work better than another. 

Types of expansion models include: 

• International Strategy – This approach is one of the most common among businesses. Typically, organisations will enter new markets without making serious changes to products or services. For the most part, pricing will remain at a similar price in the new market as well. 
• Multi-Domestic Strategy – With a multi-domestic approach, businesses will adapt their products and services to the local market that they are entering. This customization allows them to cater to the preferences of that specific region and remain competitive, although the adaptations will likely require additional effort. Similar to an international model, the pricing of these products doesn’t change significantly.
• Transnational Strategy – A transnational approach allows businesses to combine customised products and services as well as minimise costs. With this strategy, businesses can customise products to cater to specific markets, while also having control of the individual costs. 
• Global Strategy – As opposed to a multi-domestic approach, a global strategy focuses on providing businesses with the most cost-effective solution. The products themselves are sold in different markets, but stay the same. This may help organisations curb costs and help them stay competitive.

Why Should Your Business Expand Internationally?

There are many reasons your company may consider global expansion. We’ll delve into several of its biggest benefits below, but perhaps most importantly, it can help you grow your business and increase profitability. Here’s how.

Tap Into Lucrative New Markets 

Why restrict product sales to just one market when there’s strong demand for it elsewhere? By globalising your business, you can enter promising new markets and secure a bigger customer base. This is especially true if your product or service is “first to market” or fills a niche gap.

Gain a Competitive Advantage

Taking your business international can help you stay competitive in an increasingly globalised world. Being “first to market” is an effective way to position yourself as an innovative market leader and get ahead of your competitors by building a well-established brand before they do.

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The remote revolution is your friend. In 2023, 28% of employees worldwide worked remotely. 3 And this figure is only expected to grow. 4 With the international workforce now able to connect remotely, it’s never been easier to tap into top talent from across the globe. After all, building a competition-crushing team is much more attainable when your talent pool isn’t limited by geographical barriers.

Reduce Business Costs

If you’re on a tight budget or simply want to make savings, going global could be the right move for your business. Moving certain operations to less expensive parts of the world can help improve your company’s return on investment.

Provide Greater Stability 

By diversifying the markets you operate in through international business expansion, you no longer have to rely on just one country's economic and political stability; you can spread risk across multiple. Global expansion can also help you create new revenue streams, so if one suffers, another can pick up the slack. It ultimately makes your business more resilient in the face of uncertainty and change.

Access to New Markets & Customer Base

As a result of globalisation, governments have formed trade agreements that make it easier for foreign companies to do business in new, emerging markets. This gives you the opportunity to reach new customers and diversify your product offering. In other words, globalisation is what makes international market expansion possible.

Expanded Brand Recognition 

With globalisation helping you tap into new markets, you inherently expand awareness of your brand, potentially earning you greater recognition and credibility. 5 Expanding gives your new market the impression that your business is thriving, inherently increasing customer trust. Similarly, investors likely develop more confidence in your company’s projected performance. 

Economic Growth in Developing Countries

Global expansion enables companies to bring employment and new technologies to developing nations and countries. In turn, this may encourage their economic growth and unlock new opportunities, relationships, and efficiencies. 

Compliance with Universal Standards

Many nations in trade and other binding agreements adhere to the same compliance standards for product requirements and measurements. Moreover, some countries and international agreements rely upon parts standardisation to protect consumer rights and ensure accessible parts for replacement.

For example, consider the standardisation of electrical plugs, the thickness of wiring insulation, fuel emissions, and other requirements that companies must meet, often verified by independent testing. By adopting a universal standard as part of global expansion, your organisation could enable new manufacturing, supply chain, and other partnerships or  efficiencies.

Compliance with Global Laws, Regulations, and Norms

Globalisation has also accelerated the establishment of international labour laws and tax regulations. For example, the United Nations’ International Labour Organization (ILO) brings together 187 member states to promote work rights, encourage decent employment opportunities, enhance social protection, and strengthen dialogue on work-related issues.

These international laws, regulations, and expected business practices can guide your business practices during international market expansion. 

Creation of Diversely Skilled Workforces 

As discussed, globalisation has made remote working accessible to most businesses. You can now hire talent from pretty much anywhere in the world! By expanding your talent search through global hiring, you have access to a much more diverse talent pool with a broader range of skills and experiences, which helps to better position your business for growth in multiple markets.

Tax Benefits

Another potential benefit of expanding internationally? The capacity to take advantage of tax benefits. Running business operations in multiple jurisdictions may deliver decreased global income tax rates, government incentives, and tax treaties.

Platform for Future Success

Companies that successfully launch a multinational expansion can often leverage their newly acquired experience and connections to cross additional borders more easily. Research indicates that 72% of global companies determined the expected return on investment (ROI) incentivized continued or further expansion projects. 6

When Should Your Business Expand Internationally? 

It’s never too early to think about international expansion—even if you’re not quite ready to start the process just yet.

As you initially develop your product or service offering, you should draw up a long-term plan for scalability, including your aspirations for expansion. This gives you plenty of time to research target markets before investing a lot of money and resources into them. 

Once you’ve set down solid foundations in your home country and have enough funding, it may be a good time to craft and execute your global expansion strategy.

While global expansion is typically associated with huge enterprises, many smaller and younger businesses successfully expand into a global market, too. Omnipresent is one of them!

Established at the end of 2019 , we founded Omnipresent to simplify global employment for growing businesses. Today, we operate in over 160 countries and regions worldwide. Our own global business expansion process has involved hiring top remote talent from around the world, partnering with trusted local service providers, and setting up our own local entities in viable, emerging markets.

Through our Employer of Record (EOR) service, we’ve helped hundreds of other businesses, many of which are start-ups and SMBs, to hire talent abroad, supporting their own international business expansion projects. 

The Challenges of Globalization

While globalisation offers many advantages, it also presents some difficult challenges for businesses and governments alike to tackle, including worker exploitation, local unemployment issues, and climate change. We’ve reviewed the primary benefits of globalisation; now, let’s take a look at elements to be mindful of when expanding.

Preventing Worker Exploitation

Outsourcing labour to cheaper countries can reduce business costs. However, this has inevitably exposed local workers to higher levels of exploitation. Avoiding exploitative practices is a complicated and time-consuming task, but it’s crucial if you want to expand your business in an ethical manner.

Overcoming local Unemployment & Job Loss

Exploitation isn’t the only challenge associated with finding cheaper labour abroad; it can also lead to job loss in your business’s home country. While governments are ultimately responsible for protecting the local workforce, you need to assess how you can tackle this challenge with sensitivity and awareness as a business too.

Avoiding Environmental Degradation

Fossil fuel-intensive activities, such as international goods transportation, present global organisations with additional ethical considerations. Consumers increasingly look for brands to play their part in helping protect the world around them. But as demand for your goods rises, chances are your business’s carbon footprint does too. To combat environmental degradation, you need to invest in truly sustainable practices, from utilities to waste disposal, which can add costs and require a more thorough evaluation of your processes.

Increased Competition

Expanding into the global market also expands the amount of competition you may face. Moreover, expanding organisations often contend with laws and regulations imposed by governments as “protectionist policies.” These may include quotas, tariffs, and non-tariff barriers intended to help domestic organisations better manage competition from foreign markets. 7

Cultural Changes and Concerns 

From Starbucks and Nike to McDonalds and The Gap, some global companies are notorious for forever altering local landscapes—and squeezing out smaller businesses that made a geographic region unique. Globalisation critics argue that this tends to lead to ‘product homogeneity’ and the loss of an area’s distinctiveness. 8 Whenever wise organisations expand into new territory, they develop strategies that respect the markets they enter.

Economic ‘Domino Effects’

Recent financial and economic crises demonstrated that recessions or other adverse economic impacts in one geographical region may create a ‘domino effect’ on trade partners operating in a globalised economy. The most straightforward example can be found by looking at the global supply chain disruptions experienced during the pandemic in the early 2020s and the links to impacts experi e nces across all types of goods and services.

However, the notable 2008 financial crisis demonstrates a different way in which economic impacts spread throughout globally connected economies. Rather than supply chain disruptions, European Union (EU) member states—notably, Portugal, Ireland, Italy, Greece, and Spain—struggled to enact effective domestic monetary policies because of the Euro’s status as the official currency for numerous nations. 9

Loss of Smaller Companies (and Reputational Damage)

Opponents of overseas expansion suggest that globalisation leads to monopolisation, or placing the majority of a region’s wealth and power in a few select hands. As with ‘product homogeneity,’ this may harm public perception of your company. 10

International Expansion Challenges & Solutions

As you can see, internationalising your business is no easy feat. And yet, there are practical solutions you can implement to overcome challenges and mitigate risk.

Legal & Regulatory Compliance

Every country and jurisdiction has its own laws and regulations that define how foreign businesses can and can’t operate. To remain compliant , you have to carefully research all the local laws that affect your business operations, including corporate taxes , local employment regulations, data protection, import/export licences, ownership structure, industry standards, and more.

These laws can be complex, opaque, and may be written in a foreign language, making it difficult for your business to truly understand your obligations in regards to global regulatory compliance . If you fail to comply, you risk hefty fines or legal action, both of which could set back your expansion plans significantly or terminate them altogether.

Seeking legal and tax advice from local experts is one of the best ways to ensure your business remains compliant. While professional advice doesn’t come cheap, it could ultimately save you a lot of time and money in the long run.

Working with a global employment partner like Omnipresent can also help you stay compliant with local labour laws. EOR services employ your chosen talent for you, so they’re responsible for compliance, payroll, onboarding, and other key HR functions. 

Language, Culture, & Politics

Like local laws and regulations, each market will differ in terms of language, culture, and socio-political landscape. 

For your product or service to succeed in a new market, you’ll have to localise it. This may involve translation, cultural alteration, and price adjustment, as well as label and logo alterations. Localising isn’t a simple process; it’ll take a long time to complete and is very resource-intensive. But without it, your customer base may feel alienated and less willing to buy your product or service.

Hire local experts to benefit from first-hand experience and insights. There’s no one better to help you localise your product than someone who already knows the local culture and language inside out. They can help you identify areas that need adjustment and avoid awkward faux pas!

If you want to hire local experts without setting up a local entity , consider working with an EOR like Omnipresent .

Local Competitors

Being first to market is advantageous, but in reality, you’ll probably have to deal with local competitors. These competitors may be well established, locally recognized, and already trusted by your target customers.

If you don’t find a way to stand out from the crowd and gain customer trust and loyalty, your foreign expansion is unlikely to take off.

As always, doing plenty of research before you enter a new market abroad is essential. This exercise will help you identify current competitors, their unique offerings, and their market share. With that knowledge, you can decide whether it’s worth expanding to the market or choosing another.

If your product or service does have something to offer that your competitors don’t, you can build trust through strategic local partnerships.

For example, the US-based streaming company Netflix expanded to over 190 countries in just seven years. In doing so, it effectively adapted its service offering to suit each new market it entered. 11

During the streaming company’s global expansion, it launched partnership deals with cable and cellphone companies around the world to capitalise on their existing customers. This meant Netflix could reach a much larger audience without spending as much on advertising and distribution deals. In return, the local partners got access to Netflix’s exclusive programming. 12

Netflix is a unique example but clearly shows that teaming up with local companies to launch your own products and services is one way to cut through the competition and increase brand awareness in a relatively cost-effective way.

Managing Distributed Teams

Building a global team is often a key component of overseas expansion, but it can be challenging. If you have remote workers and colleagues working across different time zones, you might worry about their ability to collaborate or bond.

You may also fear that employees struggle to be productive or stay engaged while working remotely. It takes a lot of effort to ensure your distributed teams run smoothly, so you’ll need to invest plenty of time and resources into creating a global-friendly approach to work. Try adopting an asynchronous work policy to help teams collaborate effectively. Tips for asynchronous work include:

• Clearly define your preferred communication channels and etiquette, so all your team members are on the same page.
• Use the most up-to-date tools for communication and collaboration.
• Make time, when necessary, for one-on-one phone calls or video conferences.
• Always question if a meeting is necessary and use other channels of communication if it’s not.
• Use asynchronous tools like Loom or Monday to enhance collaboration and reduce silos.
• Document everything, from policies to processes to those important meetings.
• Set your boundaries and indicate when you’re available to respond. This can help prevent over working and its consequent burnout.
• Sync up to socialise, whether in person or virtually, to help your distributed team bond, even if they’re located halfway across the world!

How to Create Your Global Expansion Strategy

Global expansion can be very rewarding as long as you take the time to carefully plan out your global expansion strategy before proceeding.

Having a clear strategy in place can help you save time and money while mitigating risk and increasing profitability. It will help you decide where to focus your expansion efforts to scale your business faster. 

Below we break down the key stepsyou need to take to build your own global expansion strategy.

• Set long-term company goals to help guide your expansion and global growth. This will give you the structure, direction, and motivation you need to succeed. When you set goals, be sure to make them “S.M.A.R.T.”: specific, measurable, attainable, realistic, and time-bound.
• Do market research to identify your key markets and understand the complexities you’ll need to navigate. By thoroughly researching your desired markets, you’ll better understand demand, regional competitors, the socio-political landscape, and more. This will help you choose the most profitable markets for initial expansion.
• Choose a market entry strategy based on your company goals, financials, and resources. The main options are: exporting, licensing and franchising, strategic partnerships, mergers and acquisitions, and setting up foreign subsidiaries. If you need help deciding which option is best for your business, check out our separate global expansion strategy guide here.
• Hire expert local talent to gain insights into local ecosystems and leverage existing business contacts. An EOR service can help you hire local talent quickly and compliantly.
• Partner with trusted local businesses to carry out tasks your company isn’t capable of doing alone. For example, you may benefit from outsourcing logistics, legal advice, marketing, or PR. Remember, always do due diligence before signing a contract with a third party.
• Launch in your new market(s) using a range of relevant marketing channels to get the word out. This could include social media, a localised website, events, and advertising campaigns. Be sure to continually monitor the success of your expansion and adjust your strategy accordingly.

Should You Establish Foreign Subsidiaries?

A foreign subsidiary is a company that’s more than 50% owned or controlled by a parent or holding company based abroad. It’s a separate legal entity responsible for its own assets and taxes.

Setting up a foreign subsidiary is one way to enter a new market as part of your international expansion strategy. It’s particularly popular among larger enterprises with previous experience of overseas expansion. 

Below we outline the main pros and cons you should consider before taking this approach to global expansion.

Foreign Subsidiaries Benefits

Establishing a foreign subsidiary generally offers financial benefits such as access to local resources, grants, and tax relief. For example, if you open a foreign subsidiary, you’re typically permitted to own property assets within the local jurisdiction.

As foreign subsidiaries are considered separate legal entities, they can also protect the parent company by isolating legal and fiscal risk.

Finally, your business may also benefit from increased brand trust and credibility by having an official local presence.

Foreign Subsidiaries Risks

On the other hand, foreign subsidiaries are very expensive to establish and maintain. It can cost anywhere up to $500,000 to get started and up to $20,000 a year in ongoing fees.

To add to that expense, you need to have extensive expertise in local ecosystems to navigate regulations and customs compliantly. If you don’t comply with local laws, your foreign subsidiary may face legal action or incur hefty fines. You also open yourself up to various permanent establishment risks .

Lastly, if you need to exit the market for whatever reason, closing down a foreign subsidiary can be just as time-consuming and expensive as setting one up. 

When to Set Up a Foreign Subsidiary 

Due to the above risks, your business should only consider establishing a foreign subsidiary once you’ve tested out and validated the target market. This will help save your business time and money in the long run.

Before validation, you should use an agile, light-footed approach to expansion, such as partnering with local businesses and hiring international talent through an EOR like Omnipresent.

Adapting Your Product for a New Market

Now that you’ve researched and identified your foreign market(s), it’s time to make your product or service offering appropriate for the local consumer. This is called localization.

The amount of adaptations you’ll have to make depends entirely on the market in question. For example, a market that shares an official language and similar cultural norms with your home country won’t require as much work as a market that’s entirely different.

Here are the key adaptations you should consider when launching your product or service abroad:

Translation

Be sure to research the language your new customer base speaks. Remember, this may be different from the country's official language, and there may be multiple languages spoken. Once you’ve identified the language (or languages), you’ll need to work with a professional translator to start translating key materials, such as:

• Error messages
• Blog content
• Marketing & sales collateral

Cultural Adjustments

While translation is a big part of localization, language isn’t all you have to consider when adapting your product or service for a new market—the local culture you’ll be entering is equally important.

Every country, and region,  has its own unique culture, which affects all aspects of a person’s life. Culture is made up of collective ideas, customs, arts, beliefs, social behaviours, and more. Generally speaking, this means a consumer from one culture will interpret and engage with your product or service in a different way to someone from another culture.

To ensure your product or service is successful in a new market, you’ll need to make it culturally appropriate. This process will look different for every new market you enter because every culture is different.

Here are just some of the cultural elements to consider:

• Socio-political landscape
• Historical context
• Pop culture references
• Religion and beliefs
• Symbolism (numbers, colours, imagery, etc.) 

The best way to ensure cultural appropriateness is to work with someone from the area during the localization process. They can help you identify areas that need adjustment and suggest appropriate alternatives.

Price Adjustment

Converting your prices into the local currency is the simplest form of price localization, but it doesn’t work for every market. Remember, what seems like a reasonable price in your home country might not be true in your target market. If you fail to adjust your prices to suit the target customer base, your global business expansion likely won’t succeed.

Here are the main variables you’ll have to factor in when localising prices and price structure:

• Price sensitivity 
• Market rates
• Competitor pricing
• Exchange rates
• Pricing regulations
• Importation costs

Adjusting your prices to a new market is complex. It will involve a lot of market research and some testing before you get it right, but when you do, your business will be in a much better position to thrive.

Adjustments for Compliance

Finally, you will need to ensure your product and service offerings comply with your target market’s laws, regulations, and industry standards. This will help you avoid delays, extra costs, and legal trouble.

For example, the European Union has strict pricing regulations that prohibit traders from charging more for the same product or service just because of a customer’s nationality or country of residence. 13 This could affect your pricing localization.

Another example would be food labelling. Each country has its own regulations about how ingredients and allergens should be listed on packaging, as well as what other information is required. Not complying with local food labelling regulations could result in fines or legal action.

It’s best to seek legal advice before launching your product or service abroad to help you navigate these complexities.

Real-life Example: Netflix

Let’s turn our attention again to Netflix.

Netflix approached its global expansion in stages, first entering geographically close and culturally similar markets such as Canada. This meant the company could learn how to expand internationally without having to deal with an overly complex localization process in the initial stages of expansion.

Using this experience, the company then started expanding further afield. It did this by partnering with local companies to gain better traction, adding more language capabilities, and investing in locally attractive content.

Through data analysis and deep market research, Netflix has gained a thorough understanding of its target markets. Its knowledge extends “across political, institutional, regulatory, technical, cultural, customer, and competitor domains…[which] enhanced its credibility and helped it forge smooth relationships with key stakeholders.”

Expanding Your Business into Europe

Regional expansion is one approach your business can take when going global. Instead of focusing on just one market, you can enter multiple countries using a similar strategy. 

Europe is one of the most popular regions for this type of expansion for a number of reasons, including regional trade agreements and highly educated talent pools. But expanding into Europe isn’t always simple.

Below we weigh up the main advantages and disadvantages of European expansion so you can make the right decision for your business.

Benefits of European Expansion

• One of the most attractive reasons to expand into Europe is the free movement of goods. Within the European Union (EU), businesses are free to buy and sell goods and services without customs duties or quantitative restrictions. As a result, it’s much easier to expand across the region once you’ve established a base in Europe.
• While many European countries are part of a larger economic and regulatory entity, each market offers businesses something unique. This market diversity allows you to pick and choose which markets are best suited to your business and diversify your products or services to meet local customer demands.
• Expanding into Europe also gives you access to highly educated talent pools. The region is home to a wealth of top talent, from academics to software engineers, eager for exciting work challenges, such as joining an international team like yours.

Challenges of European Expansion

• Market diversity is a double-edged sword; cultural and linguistic differences can be challenging to navigate as you expand. You’ll likely have to spend a long time and plenty of resources on adapting and localising your products to meet customer expectations in each country.
• Not all countries are part of the EU, which makes trading within them more difficult. You’ll need to research other tax and trade agreements to understand how to sell your products compliantly and efficiently.
• The EU provides some regulatory uniformity, but each country has its own unique laws too. Local laws dictate how your business operates, how you employ staff, and more. These legal and regulatory differences make it very challenging to comply as you expand across Europe.

Researching your target market(s) in depth can help you plan for the above complexities and tackle challenges head-on, ensuring your European expansion runs as smoothly as possible.

Expanding Your Business into Southeast Asia

Southeast Asia (SEA) should also be on your radar for global expansion. Below we discuss the main advantages and challenges of expanding into the region, and we provide some top tips to help you expand successfully. 

Benefits of Expanding into SEA

• Southeast Asia is among the fastest-growing economic regions in the world. Coupled with a rapidly increasing middle class, it’s a lucrative market for foreign investors. 
• With 440 million internet users and a large digital native population, Southeast Asia is the ideal expansion destination for e-commerce and digital services businesses. In fact, the internet economy is expected to reach $360 billion by 2025.
• Southeast Asia offers a promising tech talent pool with developers aplenty! Young people in Southeast Asia also show a strong desire for continuous growth and development.

Challenges of Expanding into SEA

• To successfully launch your product or service in Southeast Asia, you’ll have to overcome multiple cultural and linguistic barriers. English is widely understood, but levels of fluency vary considerably. Southeast Asia is home to diverse cultures and politics, so you can’t take a “one size fits all” approach to expansion.
• Each Southeast Asian country has complex laws and regulations that affect foreign businesses and employment. If you don’t comply with these laws, your business could face fines or legal action.
• In Southeast Asia, business has traditionally been done via family ties and conglomerates, so foreign businesses may lack the key contacts necessary to make expansion a success.

Tips for Expanding into Southeast Asia

While those challenges may seem daunting, they’re not insurmountable. Here’s a brief step-by-step guide to help you expand into Southeast Asia successfully:

• Create an expansion strategy to help you plan ahead, set goals, and determine the optimal entry method.
• Hire local talent to gain first-hand knowledge of the target market and overcome cultural and linguistic barriers.
• Work with professionals to adapt your product or service for the new market, including translation, localization, price adjustment, and compliance.
• Launch and test your product, continually monitoring its performance and making adjustments as necessary.

Successful Global Expansion With Omnipresent

Overseas expansion allows you to enter lucrative markets, tap into top talent, reduce costs, and diversify your revenue streams. It may also offer increased resilience in the event of a natural disaster, human error, or an economic downturn.

However, expanding internationally isn’t simple; there are a lot of moving parts and local regulations to know beforehand. That’s why you need a clear strategy to guide your expansion process and minimise risks. This includes setting clear objectives and doing plenty of research before entering an overseas market.

Staying agile at the beginning of expansion is also key! Instead of setting up a foreign subsidiary, try a lighter-footed approach. This could include partnering with trusted local businesses and hiring local talent through an EOR. Once you’ve validated the market, only then should you set down permanent roots.

As your internationalisation partner, Omnipresent’s EOR solution can help you hire the best global talent compliantly and hassle-free. No more worrying about complex employment laws; we’ll take care of that for you by managing onboarding , payroll , benefits , and more. That way, you can focus on executing your global expansion strategy and launching your product or service abroad with confidence.

• Forbes. Global Expansion Strategies: How To Take Your Business To New Markets Successfully. https://www.forbes.com/councils/forbesbusinesscouncil/2024/05/22/global-expansion-strategies-how-to-take-your-business-to-new-markets-successfully/
• Touchpoint. Seven Epic Cases of Companies That Failed Internationally. https://www.firmex.com/resources/blog/seven-epic-fails-by-businesses-that-tried-expanding-into-foreign-markets/
• Statista. Percentage of employees who work from home all or most of the time worldwide from 2015 to 2023. https://www.statista.com/statistics/1450450/employees-remote-work-share/
• Forbes. Remote Work Statistics And Trends In 2024. https://www.forbes.com/advisor/business/remote-work-statistics/
• Wise. Global Expansion: Go International With This Strong Strategy. https://wise.com/us/blog/global-expansion
• PR Newswire. 72% of Global Businesses Forge Ahead with Expansions Despite Economic Concerns and Supply Chain Challenges. https://www.prnewswire.com/news-releases/72-of-global-businesses-forge-ahead-with-expansions-despite-economic-concerns-and-supply-chain-challenges-301581005.html
• Harvard Business School. 6 pros and cons of globalization inbusiness to consider. https://online.hbs.edu/blog/post/pros-and-cons-of-globalization
• Investopedia. Globalization in Business With History and Pros and Cons. https://www.investopedia.com/terms/g/globalization.asp
• Investopedia. What Are PIIGS and the Link with European Debt Crisis.
• Harvard Business Reviews. How Netflix Expanded to 190 Countries in 7 Years. https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-in-7-years
• New York Times. In Global Expansion, Netflix Makes Friends With Carriers. https://www.nytimes.com/2017/02/26/technology/netflix-streaming-expansion-mwc.html
• Your Europe. Unfair pricing. https://europa.eu/youreurope/citizens/consumers/unfair-treatment/unfair-pricing/index_en.htm

Meet Charlotte Darrell, one of our talented contributors. Check out Charlotte's articles to learn more about global employment and remote work.

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Creating an international expansion strategy

International expansion is a great way for an ambitious business to grow, but it involves numerous challenges. Read our guide to learn more.

International expansion is a great way for an ambitious business to grow, but it involves numerous challenges. From legal and tax issues to problems of culture and language, many factors can trip up a global growth plan. This guide highlights the key things to consider when going global.

What is a global expansion strategy?

A global expansion strategy is a detailed plan of action for entering a new territory or territories. The goal of an international expansion strategy is to establish the business in the new territory as quickly as possible. Some key aspects include:

• Selecting a new target market – in which countries or territories does your business have the best chance of success?
• Detailed market analysis – where do you fit into the industry landscape in the new territory?
• Deciding on a market entry plan – what is the most effective way to achieve success quickly (e.g. target customers, value proposition and brand positioning)?
• Establishing an organisational structure in your new region – how will the new operation be organised and who will manage it?
• A roadmap for success – what timelines and targets are needed to grow quickly?

The biggest challenges of expanding overseas

A business model has been successful in one country will not necessarily work in another. There are a number of common challenges for any business targeting international expansion. These include:

• Finding the right talent. It’s vital to hit the ground running when entering a new region. Hiring the right staff to facilitate your growth can be difficult, so the right connections will be crucial.
• Regulatory divergence. Compliance can be a huge challenge for businesses establishing themselves in a new market. Tax, tariffs, trading standards and workplace requirements may differ from what you’re used to.
• Language and culture. This is an obvious challenge for any business expanding internationally. The relationships you build early on in a new region are vital, which is why it’s important that your team has the necessary local expertise and language skills.
• Supply chain risks. Selling products in a new market may present your company with big logistical challenges. Trading laws and border restrictions must be accounted for, and you may have to build up supply chain networks from scratch.

Three international expansion strategies

Once you have committed to international expansion, it’s time to build a formal strategy. Every global expansion strategy will be different depending on factors such as your company’s current position, the sector you operate in, the business landscape in the new territory and your specific business goals. However, there are a few common strategies that businesses can learn from.

Buy and build

Acquiring one or more businesses has proven a highly effective method of expanding internationally. A buy and build strategy involves acquiring a target company and then making a series of further acquisitions with the goal of creating a larger, more valuable company.

‘Buy and build’ is a particularly popular strategy for companies targeting international expansion because it can provide rapid access to new markets. Instead of starting from scratch, you benefit from the existing infrastructure, talent, local market expertise and connections that might otherwise have taken years to create. Your business may also benefit from the economies of scale and reduced costs that a larger organisation enables, helping to grow profits more quickly.

This strategy can also boost the value of the business overnight – something that is important for entrepreneurs with an eye on a successful exit. If you are on the lookout for a buyer to acquire your business, you may find that a buy-and-build strategy could raise your profile.

However, buy and build also presents a number of potential issues for companies expanding into new markets. Deals to acquire a new company are often lengthy and expensive processes – this is especially true when operating in a new country for the first time. Tax laws and fluctuating currency values can compound the problems, while local legislation can sometimes put obstacles in the way. Competition laws and rules around foreign investment need to be carefully considered.

Licensing agreements are another common way for businesses to make a foray into a new market. Such an arrangement involves your company licensing the use or sale of its intellectual property to another company in your target market in exchange for payment. One sector where licensing agreements are common is the hospitality industry, in which restaurant and cafe businesses license their brands for third parties to operate in different regions.

Licensing can help businesses achieve market penetration in a new country quickly. It allows a business to build awareness of its products and services without necessarily investing large sums of its own capital. In a scenario where your company isn’t confident of being able to market itself in a new region straight away, licensing can provide the answer.

There are a number of potential downsides, however. Legislation around licensing is complex in many countries, which can slow down the process as well as bring legal fees into the equation. Thorough research and expert legal advice is required to determine whether licensing is appropriate for your business in your target region.

Licensing can also be associated with a loss of control over your brand, and an inability to interact directly with new customers, since their main point of contact will be your licensee and not yourself. On the other hand, a successful expansion through licensing can open the door to a more traditional expansion, once market share has been established.

Traditional expansion

A more traditional approach to international expansion is when a company aims to set up in a new country almost from scratch. Instead of looking to acquire a business in a target country or to license the sale of your products, traditional expansion involves creating business units on the ground.

There are a number of advantages to this approach – most obviously, control. Traditional expansion allows a business to do things its own way, without having to rely on a licensee or a local partner. With fewer entities involved, the potential profit margins may be greater.

On the other hand, building from scratch in a new country is expensive. It can take years to establish an operation in a new territory, and longer still for that operation to become profitable. For these reasons, traditional expansion is usually viewed as riskier than licensing or expanding by acquisition – though, as we have seen, the rewards are potentially greater.

If you do want to pursue this strategy, the right support is crucial. A professional employer organisation with expertise in your new region can assist with office set-up, compliance and hiring. The right investor may also be able to offer support. BGF, for example, has supported many portfolio businesses as they expand internationally.

The best form of business funding for global expansion

Choosing the right international expansion strategy is crucial, but it is equally important to choose the right funding method. Unless you have a large amount of capital on your balance sheet, it is likely you will need to turn to an investor to help finance your expansion. Picking the right investor can make the difference between failure and success.

BGF’s minority investment approach has helped more than 450 businesses to grow. We have invested more than £2.5 billion in ambitious businesses in the UK and Ireland. Many of these business used BGF funding for international expansion. For example:

Cornish clothes company Seasalt received £11.5 million from BGF to expand its business, in-store and online. With the support of its non-executive chair, Mike Harrison, a US-based adviser to consumer brands, the business is expanding in North America.

Appnovation

Vancouver-based digital consultancy Appnovation received more than £9 million from BGF to expand in Europe and elsewhere. Follow-on financing was provided alongside the Canadian Business Growth Fund.

BGF invested £14.5 million in Aberdeen-based Inoapps, a global Oracle Platinum Partner, to finance acquisitions, new customer offerings and international growth. Led by CEO Andy Bird, the business has expanded in the US, serving international blue-chip clients.

The information contained in this article is for general information and use. It does not constitute any form of advice and is not intended to be relied upon in making any investment decision. Independent advice should always be sought as to whether a particular transaction is suitable having regard to your personal and financial circumstances.

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How To Scale Your Business Internationally

Since more than 95% of global consumers live outside of the U.S. , reaching new customers transnationally can help you expand your business market, profits, and revenue. Following are five tips on how to scale a startup business or established business globally.

1. Create a Service or Product that Meets a Need in Global Markets

Many of the world’s largest international companies are based in the U.S. Digital connectivity as a means to expand into new global territories has become more common. There are many considerations when you plan to scale a startup business or an established business globally. 

Evolving technology is one way to help scale or establish an overseas business easier when you’re selling a product or service.  Every country’s population has its own economic structure, lifestyle, and culture. If there’s no need for your product or service in a new area, you’re likely to lose time and money attempting to conduct business there.

Develop an international business plan

Any business plan needs a sound strategy that identifies a need for a product or service and explains how it will meet that demand. Developing a strategy can help you protect your resources and ensure expansion makes sense. It’s important to consider how a new area’s competition, cultural attitudes, and regulations could affect your product or service’s likelihood of success.

2. Research International Regulations

Every country in which you want to expand will have varying laws on everything from employment to marketing claims, and data privacy to taxes. 

You’ll want to operate legally and protect your business resources to avoid costly mistakes that can affect your budget and reputation. It’s wise to work with legal experts from the country in which you want to expand to ensure you’re following all rules and regulations.

Research assistance programs

In your research, you may discover government programs that could assist your business expansion. For example, there might be incentives for opening an office in a different country. Knowing this, could help inform your expansion strategy.

3. Hire Local Employees in the Region

Hire local employees in the area in which you are planning to expand has some advantages. Having local employees can:

• Help ensure that you avoid cultural and language issues in omnichannel marketing and other company representations, such as your website.
• Demonstrate that your company is invested in the area’s people and community. That can improve sentiment for your business and help spread the word about your company, which, in turn, can help you win more customers.
• Help your company relate better to local customers. Customer-facing employees, such as customer support and sales teams, can help achieve this by speaking to customers in their native language. It also helps increase the diversity of your workforce. Plus, workers in other countries can also learn about other cultures through international teamwork.
• Make your company more attractive to talented job candidates who are interested in working internationally or attending international events, such as business summits.

4. Explore Ways to Attract Local Customers

Market research can help you understand your target audience in each new area. You need to ensure your business proposition stays consistent in international markets, and you need to meet prospective customers where they are. For example, determine and target customers in the area that spend time on a particular social network. 

International marketing and sales teams can also benefit from local input to ensure customer experience strategies will work in that market. For example, learn whether an acceptable word or phrase in one language may be offensive in another. This effort includes:

• Accepting local forms of currency
• Offering culturally respectable messaging and communication in locals’ native language
• Marketing on customers’ preferred channels
• Providing customer support from local workers

5. Enable a Strong Company Culture

Weave your vision throughout corporate communications and global branches. All employees should be unified by the same mission, even when business strategies differ locally.

When your employees work across various time zones, ensure that collaboration and your company’s culture remains strong. 

Use technology and tools in daily operations that facilitate asynchronous collaboration. These could include social platforms like Discord, video conferencing and chat platforms like Microsoft Teams, and cloud-based project management solutions like Workfront.

Support team bonding

Support international team bonding by bringing teams together when possible. This might be through an annual in-person summit or virtual gatherings that can accommodate multiple offices. Publicize successes of international departments. This signals to all employees and teams the global impact your company is making. As your business strategy evolves, solicit input from your global teams to help everyone get involved and feel valued.

Learn More About Ensuring Global Business Success

International expansion can be an exciting time for a company. It can help you gain more customers, bolster international local economies, and provide other benefits to the world.

If you are involved in an international business, or you’re interested in global scaling, the Managing in the Global Digital Economy course from Wharton Online can help you succeed. 

This course:

• Covers the growth of the digital economy through various digital platforms, 
• Details how the network effect can unfold at global levels
• Explains the risks of international expansion
• How to develop a successful digital strategy

Learn more and enroll her e .

The Wharton School is accredited by the International Association for Continuing Education and Training (IACET) and is authorized to issue the IACET CEU.

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7 Steps to Choose the Right Market for Your Startup's International Expansion Choosing the right market is crucial for a successful expansion, especially for startups with limited resources. Here are seven crucial steps to guide you in selecting the most promising international market.

By Slava Bogdan Edited by Micah Zimmerman Oct 22, 2024

Key Takeaways

• Evaluate market readiness by analyzing industry maturity and consumer buying habits.
• Use scoring models to prioritize markets and ensure an effective expansion strategy.
• Achieving product-market fit is essential before hiring a local country manager.

Opinions expressed by Entrepreneur contributors are their own.

Global expansion is a goal for most startups, as it provides access to larger markets and a more diverse customer base. In fact, 60% of startups aim to expand internationally within their first three years of operation; however, only 4.6% successfully transition to scaleups.

Achieving scaleup status enhances your chances of success in international markets, but this is a challenge in itself. Only 2.5% of startups formed in the activation-phase ecosystem reach this milestone.

The choice of market will determine whether your expansion becomes a success or a costly misstep. This is especially true for startups , where resources are often limited, and early failures can have lasting consequences. But how can you ensure you're making the right decision? Here are seven crucial steps that can guide you through the process of choosing the most promising market for international expansion.

Related: How Small Businesses Are Teaming Up to Boost Local Economies

1. Assess the market's readiness for the product

How well has the market been informed? Consider factors like internet penetration, the maturity of your industry, and consumer buying habits that will help you gain a comprehensive insight into the local landscape. For example, if your business is e-commerce, seek out markets where people have already begun ordering online.

An alternative strategy involves entering less developed markets that are not as accustomed to your field and are, therefore, less competitive . However, in this case, it is a long-term play as you need to invest time in cultivating new habits among customers and targeting early adopters. Your business may also alternate strategies based on the location: we currently operate in both mature and emerging markets, each with different levels of e-commerce and e-gifting adoption.

2. Analyse the competitive landscape

If three or more competitors share the market, it is a highly competitive environment that will require significant investment to achieve meaningful results. However, if there is one dominant competitor whose ways are relatively rigid, you can attempt to secure the second position in the market by leveraging your agility, modernity, and a different approach to customer engagement.

At this stage, it's important to evaluate the overall market size and its distribution among competitors in monetary terms. The key metrics include:

Total addressable market (TAM) : This indicates the total revenue potential available in the market. In our case, it reflects the overall flower sales across the country.

Serviceable addressable market (SAM) : For Flowwow, this reflects the current online sales figures and the revenue generated by our competitors.

Serviceable Obtainable market (SOM) : This metric estimates the share that you can realistically capture, representing the portion of the market revenue that you can control.

3. Utilise scoring models

Once you have assessed the product's market readiness and analyzed the competition , you will have identified several priority countries that can be considered potential markets for scaling. Scoring models can be very helpful in selecting the one or two best options.

For instance, Amazon used a scoring model to evaluate key success factors when expanding into Asian markets . The focus was on India and Japan, where the company made significant investments in infrastructure, local partnerships, and the adaptation of payment systems. In both countries, Amazon became one of the market leaders, overcoming a complex and diverse environment.

4. Conduct field research

Field research is one of the key steps in the business scaling process, helping to understand the real situation in the target market. This method reveals customers' actual pain points, which may not be evident from general data. Customer development interviews provide a deeper understanding of cultural nuances, local habits, and the specifics of interacting with the product or service. If in-person meetings aren't possible, conduct online interviews with customers (you can find them on LinkedIn or in interest-based communities).

For instance, our startup is a gifting marketplace primarily relying on online payment methods. Through market research, we discovered that online payments are a customer favorite, but method preferences can vary significantly. When entering a new market, we must integrate local payment systems, a process requiring legal and technical work and thorough research. If the preparations aren't complete, the marketplace simply won't be able to accept new orders.

Related: Why Research Is Key to Startup Growth and Customer Centricity

5. Test the loading speed of your website and app

In the era of high-speed Internet, user experience is critical to e-commerce success. Slow-loading pages frustrate users, leading to high bounce rates, reduced conversions, and a negative impact on brand perception.

According to Amazon, a 100-millisecond delay in page load time could lead to a 1% loss in sales , while another survey suggests that 53% of site visitors will leave the page if it takes longer than three seconds to load. In contrast, satisfied customers can spend up to 140% more and will recommend companies to others when they feel valued.

6. Find a product market fit

Start by developing a Minimum Viable Product (MVP) that directly addresses the core issues of your target audience. Launch this MVP and gather detailed feedback from users, analyzing their behavior and preferences. The key is to refine your product based on these insights, tweaking its features to better align with market demands. Regularly track performance indicators such as user satisfaction and engagement to confirm whether your product solves the market's problem. Continuously iterate and improve until you reach a steady stream of sales from the local audience, signaling that you've achieved PMF.

A well-known example is Airbnb , which began during a conference in San Francisco when its founders rented out their own property to address a shortage of accommodation. By collecting user feedback, they refined their offering, highlighting the value of unique stays and ease of booking. This iterative process, combined with a focus on user needs, helped Airbnb grow into the global leader in short-term rentals today.

Related: Product-Market Fit: How to Measure If Your Business Is Filling a Need

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What to Consider When Expanding a Business Internationally

When expanding your business internationally, important considerations range from the obvious, like financial viability, to less evident, like cultural concerns. Understanding local market dynamics, international laws and regulations, and new cultures  is crucial for businesses dealing with the intricacies of building a presence in new territories. 

Key Takeaways: Per the World Trade Organization, key considerations for international expansion include 

• Market research
• Legal compliance
• Cultural differences
• Financial planning

Understanding local consumer behavior is crucial to developing a successful expansion strategy.

Expanding the borders of your business is difficult, but not impossible. Let’s look at the many elements of expanding a business beyond the United States.

Table of Contents

Key considerations for entering a global market.

It's important to weigh several key considerations before expanding into the international market. These include:

• Market viability
• Political and economic situations
• Local infrastructure
• Costs of expansion
• Identifying potential business partners
• Cultural and/or linguistic barriers

These and other factors play an important role in shaping your approach and strategy for global market entry.

Assessing Market Viability

This process ensures that your product or service has a viable customer base in the new market. Take this time to see if your business practices line up with the local regulations and culture. Can your business compete effectively with existing offerings in foreign markets? This and other questions should be answered before you pull the trigger on international expansion.

Business owners can use the following steps as guidelines during this crucial phase.

• Find Your Target Demographic

Who’s most likely to buy your services or goods? Research their age range, budgets, and buying habits.

• Determine Your Growth Potential

Estimate the current market size. Has the area grown steadily year over year? This will help you decide if it can support your business.

• Evaluate Market Needs and Gaps

Look for unmet needs or poorly served segments. Your product or service could fill these gaps, providing a competitive advantage.

• Study Legal and Regulatory Landscapes

Gauging the legal and regulatory environment is crucial for successful market entry. Pay particular attention to intellectual property laws.

• Find Your Competition

Determine who they are, their market share, and their strengths and weaknesses. 

• Perform a SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. This analysis will help you understand your potential position in the market.

If you haven't already, now is also the time to calculate initial investment costs and project your return on investment (ROI).

By following these steps, businesses can get a solid grasp on whether their intended market is viable. This minimizes risks and improves your chances of successful market entry. However, the work doesn't end there.

Economic and Political Climate

Stable economic and political environments make any business venture easier. Before taking your chances in a new market, understand the local economic indicators and the political landscape.

Here’s a detailed exploration of how the economic and political climate of another region can impact your business, along with a list of potential pitfalls.

Impact of Economic Stability on Business Operations

Economic stability is a good sign of a market’s profit potential for new businesses. Inflation rates, currency stability, and GDP growth reflect the health of an economy and its future direction. 

A stable economy suggests a good target for investment and business growth. On the other hand, unstable economies pose risks to business operations, affecting everything from pricing strategies to logistics.

Dealing with Political Relations and Trade Agreements

The political environment in your target market can greatly influence the ease of doing business. Political stability, trade agreements, and diplomatic relations with the U.S. all play a role in defining the business landscape. Examine policies on foreign investment, taxation, and repatriation of profits.

Some potential pitfalls caused by economic or political Instability are:

• Currency Fluctuations : Volatile exchange rates increase the cost of doing business and impact pricing strategies.
• Trade Restrictions : Tariffs and embargoes can limit access to the market or increase the cost of goods.
• Regulatory Changes : These can occur with little notice, disrupting business operations and increasing costs.
• Political Unrest : Instability can cause disruptions to supply chains , and even pose security risks to assets and personnel.
• Expropriation : In some cases, governments may nationalize industries or expropriate assets. This is particularly possible during wartime.

Businesses can reduce these risks through due diligence. Perform political and economic risk assessments before kicking off an international expansion campaign. Creating diverse supply chains and getting political risk insurance can provide some protection against these issues.

Infrastructure and Technology Accessibility

The United States enjoys a robust network of highways, railways, and ports. We're also a technologically advanced nation. Not every country can make these boasts, and your target market may or may not have comparable infrastructure to the U.S.

Good infrastructure leads to smooth operations, reliable logistics, and the ability to communicate with customers effectively. Your market's access and use of modern technology can dictate your business's capacity to innovate and remain competitive. 

Keep these favorable indicators of infrastructure and technology in mind.

• Well-Developed Transportation Networks : Look for modern and efficient transport systems by land, sea, and air. Having these in place results in easy freight shipping.
• Reliable Electricity and Water Supply : Stable power grids and water distribution systems are essential for day-to-day operations.
• High-Speed Internet : Widespread availability of broadband and mobile internet with high speeds is a must-have for digital operations.
• Modern Logistic and Freight Services : Efficient port and freight services reduce the time and cost of shipping goods into and out of the country.
• Digital payment systems : A strong presence of digital banking and payment services indicates a market's readiness for e-commerce.
• Strong IT Support and Services : Having these in place can facilitate easy maintenance of your technology infrastructure.
• Technology Parks : The presence of these innovation centers can be a sign of a vibrant tech ecosystem.

From bandwidth speeds to roadways, the presence and growth of such modern structures is vital . This will help to identify both operational challenges and local advantages. For instance, a country with a strong focus on digital innovation may offer unique opportunities for digital marketing strategies and e-commerce.

Advancing road and rail systems can mean improved access to both resources and markets that have yet to be tapped.

Developing an International Business Strategy

Let’s say you’ve done all of your homework and performed all the evaluations recommended above. Your target market has sound infrastructure, lucrative growth potential, and it doesn’t look like they’re going to blow themselves up any time soon. What’s next?

Now is the time to start putting your international expansion strategy together. Much like the process of vetting your target market, expansion strategies require a varied approach, encompassing everything from financing to building your brand. 

Let’s take a detailed look at these elements of international business expansion.

Choosing the Right Market Entry Strategy

For U.S.-based importers looking to penetrate international markets, selecting the right market entry strategy is a pivotal decision that can determine the success of their global expansion efforts. This choice depends on several factors, including resource availability and the specific challenges of the target market. 

There are five approaches to expand internationally that businesses usually employ. They are:

• Franchising
• Joint Ventures
• Direct Investments

Below, we outline the pros and cons of these expansion strategies.

This is a fairly simple method of expansion. You simply need to make your products available for international purchases. 

• Low Risk : Exporting involves minimal investment compared to other entry strategies, reducing financial exposure.
• Flexibility : Businesses can test international markets and scale their operations up or down without significant commitments.
• Leveraging Existing Infrastructure : Companies can use their current production capabilities without the need for additional investment.
• Market Barriers : Tariffs, trade barriers, and local regulations can complicate exporting.
• Reduced Marketing Influence : Relying on third parties can lead to less control over how products are marketed.
• Logistical Challenges : Managing international shipping and customs can be complex and time-consuming.

If you decide to go this route, you can use the information below to help you decide which markets to target.

Top Five Purchasers of US Goods Exports in 2022

Source: https://ustr.gov/countries-regions

Exporting your goods or services may be the most direct option to participate in global trade. However, it’s not necessarily required if your brand is strong enough.

If your business’s value is in the strength of its name and IP, licensing may be a viable way to generate more revenue.

• Low Cost & Risk : Licensing allows businesses to enter foreign markets with minimal investment compared to setting up their own operations.
• Income Stream : Generates a steady income stream from license fees or royalties.
• Market Penetration : Allows businesses to enter the market quickly by using the licensee’s distribution networks .
• Limited Control : You won’t have as much control over the manufacturing process and quality control of their products.
• Revenue Sharing : Profits from product sales must be shared with the licensee.
• Risk of Creating Competitors : There's a risk that the licensee might become a competitor in the future.

If you like the sound of licensing but prefer a more extensive partnership, you might want to explore franchising options instead.

A popular option among domestic restaurant chains, franchising your business provides fast growth with a few drawbacks.

• Rapid Expansion : Franchising allows business to quickly establish a presence with relatively low costs.
• Local Knowledge : Franchisees bring local market knowledge, reducing the market entry barriers.
• Brand Growth : Helps in building brand recognition and loyalty across international markets.
• Quality Control : Making sure your product’s quality is consistent across franchises can be a challenge.
• Cultural Adaptation : Franchise models may need significant changes to fit into local market norms and consumer preferences.
• Legal Complexity : Agreements can be complex to negotiate and require that you adhere to local laws.

Similar to franchising, our next option means sharing the risks and rewards of expansion between two or more parties.

Partnering for mutual benefit reduces individual risk for all businesses involved. 

• Shared Risks and Costs : These are shared with the local partner, making it a less burdensome investment.
• Local Expertise : Local partners provide useful insights into the market, culture, and legal environment.
• Access to Established Networks : Your partners may have access to existing distribution channels , cutting down on logistics concerns.
• Shared Control : Conflicts may arise during the shared decision-making process.
• Cultural and Management Differences : Differences in corporate culture and management styles can affect the joint venture’s operations.
• Legal and Financial Complexities : Creating and managing a joint venture involves complex legal and financial arrangements.

If the idea of sharing control with one or more partners doesn’t appeal to you, direct investment will probably be part of your expansion plans.

• Direct Investment

When in doubt, do it yourself. You’ll make all the decisions and take all the risks.

• Full Control : Businesses have complete control over their operations, meaning they can implement their business model and practices effectively.
• Long-term Presence : Indicates a long-term commitment to the market, potentially leading to stronger market presence and brand loyalty.
• Access to Local Resources : Allows companies to fully access local resources, including labor and materials.
• High Investment : Requires significant upfront investment and involves higher financial risks.
• Complex Management : Managing overseas operations can be complex due to distance, cultural differences, and local regulations.
• Political and Economic Risks : Direct investment exposes the business to the economic and political issues addressed earlier in this article.

Choosing the right market entry strategy requires thoughtful consideration of these options, pros, and cons. Additionally, businesses can benefit from combining different strategies as they grow, adapting their approach to maximize success and reduce risks.

Building an International Brand

All the strategizing and market research in the world will prove useless if you don’t build a reputable brand people can recognize. To do this on a global level, you’ll need to get familiar with local culture and consumer behavior. 

An effective international brand strategy helps you create an identity that resonates with customers worldwide. Use these guidelines to build your identity in a thoughtful way.

• Culture-Focused Market Research : Understand the cultural nuances of your target market. This research should inform all aspects of your brand strategy, from product adaptation to marketing language.
• Localize Your Brand Messaging : This might involve working with local marketing agencies who are experienced in the local market.
• Leverage Local Partnerships : Collaborating with local influencers, celebrities, or businesses can help increase brand awareness and credibility among local consumers.
• Participate in Local Events : This is a relatively easy way to build good will in any market. Sponsorship opportunities should be easy to find.
• Optimize Your Local SEO : Ensure that your online content is geared toward local search behaviors and keywords.
• Build Social Media Campaigns : Social media platforms can vary in popularity from one country to another. Use localized content to engage with your target market on their favored platform(s).

Building a strong international brand is a long-term effort. Your plan must be adaptable or it’s almost guaranteed to fall flat. 

With a strong enough brand, you may end up attracting something almost as good as customers: investors. 

Financing Your International Expansion

Expanding your business internationally requires a considerable financial investment. You’ll need to cover the costs of market entry, setting up operations, and sustaining your business until it starts to make money. 

Here’s an overview of financing options available to businesses looking to expand globally, along with a brief explanation of each.

• Venture Capital and Private Equity : These investors offer capital and/or other resources in exchange for a piece of the business. 
• Bank Loans : This option may require collateral and a convincing business plan that shows the potential for profitability.
• Government Grants and Subsidies : These funds are beneficial as they often do not require repayment, but they typically come with strict criteria and usage requirements.
• Export Credit Agencies (ECA) : ECAs can lessen some of the risks associated with international trade, like foreign buyers missing payments and political instability.
• Crowdfunding : This can be a viable option for businesses with a compelling story or product that resonates with a wide audience.
• Internal Financing : Reinvesting profits from your domestic operations is a prudent way to finance your expansion without giving up equity.

Your choice of financing options should reflect the needs and circumstances of your business. Evaluate the terms and costs of each option and consider seeking advice from financial experts or advisors with experience in international business expansion. 

Key Benefits of Successful International Expansion

Why should you consider international business expansion in the first place? Some benefits are obvious, but others are more subtle. 

We can group these benefits into the following three categories:

• More profits
• Better brand awareness
• A competitive edge

Let’s take a closer look at each of these benefits. 

• Increased Market Reach and Revenue Potential

Expanding internationally opens up new markets, substantially increasing the size of your customer base. This diverse approach boosts revenue and reduces dependence on a single market.

• Enhanced Brand Awareness

A global presence elevates your brand, giving it international exposure. In addition to enhancing your brand's prestige, this can attract new business partnerships and open up further opportunities for expansion.

• Competitive Advantage

Operating in multiple markets can give you a competitive edge, providing insights into international trends and consumer behavior that you can apply to your operations. Additionally, being an early entrant in an emerging market can establish your business as a market leader.

Cultural Considerations for Global Business

One of the most important elements of successful international expansion is understanding your target market’s culture and language. Effective communication, negotiation, and business practices can vary significantly across cultures. 

Failure to consider cultural nuances can result in less market penetration and a tarnished reputation. Even companies as large and successful as BMW aren’t immune to the consequences of insufficient cultural understanding. 

Anticipating these differences and adapting your strategy is a key step to establishing yourself in international markets. Let’s look at some common cultural considerations and effective ways to re-shape your strategies.

Understanding Cultural Differences

While not comprehensive, the following examples of cultural considerations are a good jumping off point for businesses expanding into foreign markets.

• Communication Styles : Things like directness of language, the appropriateness of humor, and the use of gestures vary across the globe. An ad that’s persuasive to customers in the USA might seem obnoxious or even offensive elsewhere. 
• Values and Beliefs : Core values and societal beliefs significantly influence consumer behavior and expectations. An advertising campaign based on individual success may appeal to audiences in individualistic cultures, while collectivists might favor messages around coming together to succeed.
• Color Symbolism : Colors can symbolize many things from one culture to another. For instance, while white is associated with weddings in Western cultures, it can represent mourning in many Asian cultures. 
• Holidays and Celebrations : Aligning marketing campaigns with local holidays and celebrations can enhance your brand’s perception. Approach these occasions with sensitivity to avoid appearing exploitative.
• Digital and Social Media Usage : A platform that's effective for marketing in one country might have a much smaller reach in another. Additionally, the tone and type of content engaging to  users can differ significantly across cultures.

Changing your business practices to reflect cultural understanding is a powerful way to set your brand apart and build deeper connections with a global audience. In the next section, we’ll introduce some scenarios where businesses adapt their model to thrive in a new market.

Adapting Your Business Model: Prospective Situations

Let’s say a U.S.-based fashion retailer plans to expand into Southeast Asia. This region is known as a hotbed for engagement on social media. 

To adapt, the retailer partners with local fashion influencers and bloggers for social media campaigns. They focus on platforms popular in the region, such as Instagram and TikTok. The business creates localized content showing how its fashion fits into local styles, displaying value in a market sensitive to trends and affordability.

In our second scenario, a tech startup specializing in personal finance apps wants to enter the European market. Given Europe's strict data protection and privacy laws (GDPR), they overhaul their data handling practices to ensure compliance. 

The startup’s marketing and advertising strategies focus on security, highlighting the company’s commitment to protecting user data. Social media campaigns involve discussions about financial literacy and data security, positioning the app as useful and trustworthy.

For our final example, an automotive company wants to introduce its latest electric vehicle (EV) line to the Scandinavian market. To align with local attitudes toward sustainability, the company's marketing strategy focuses on the vehicle's low carbon footprint and use of eco-friendly materials. 

Participating in green energy and sustainability expos help solidify the brand's presence as an eco-conscious choice. Social media campaigns feature pristine local landscapes, underscoring the vehicle's role in reducing pollution.

No matter what products or services you plan to offer, cultural considerations are a vital part of expanding your business internationally. Another important part of doing business internationally is understanding the intricacies of shipping, logistics, and the regulations surrounding importing and exporting goods. If this is an obstacle in your business plans , we can help.

International Commerce With Product Distribution Strategy

Planning to enter the global market is a job all its own.  By working with experts in the field of product distribution,  you can feel confident about your business’s expansion plan.

At Product Distribution Strategy, our team of logistics experts can provide valuable advice and services in all fields of international shipping. From ocean freight to truckload and air freight, we have the knowledge and resources to give you a leg up in the competitive international market.

Trust us with services such as:

• Export consultations
• Distribution strategy sessions
• Return logistics

Helping you grow your business is our business. Give us a call at (855) 863-7672 or contact us online today!

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International Business Plan Structure

Is your business missing the opportunities in the international markets? Are you struggling with where to start your international expansion and how to go about it?

International Business Plan outlines corporate goals and steps towards foreign markets entry. It is also called the  Export Business Plan . At Win Global, we apply a 3-step approach to your international expansion.

Step 1: Building a Solid Foundation for International Business Plan

During this phase we determine the readiness of your business to the international expansion and help you to build four pillars of the successful international expansion:

• Selection of the product, service or solution to expand internationally
• Defining global value proposition for the selected product, service or solution
• Profiling ideal buyers or distributors of the product, service or solution
• Target market selection

Step 2: Analytical Phase of International Business Plan

This is a very important stage of the preparatory period for entering the international markets. It summarizes all the information collected from foreign market research and risk assessment. Based on obtained information a company checks the feasibility of continuing international business planning and makes a first go-or-not-to-go decision.

Step 3: Planning Phase of International Business Plan

This is the final stage when we put together a foreign market entry plan for our clients and consider all steps that must be taken in order to succeed in international business. The typical content of International Business Plan is:

• Executive Summary of International Business Plan
• Corporate Global Vision and Goals
• Four Pillars of the International Business Expansion
• Foreign Market Research Summary
• Risk Assessment
• International Business Strategy At this stage, we identify the best strategy that will help our client to enter each particular foreign market of interest. The examples of international business strategies are exporting, licensing (franchising), joint venture, foreign direct investments, etc.
• International Business Action Plan Based on an International Marketing Plan and the project approach International Business Action Plan contains activities, milestones, estimations, resources, performance measurement and evaluation criteria.
• Cost and Benefit Estimate .

Contact us now to schedule a free and no-obligation discussion about your issues in international expansion and determine if we can help you. Fill out the contact form now .

Navigating business expansion: Strategies for growing your business

Growth is key to any business’s survival. Learn what growth strategies are and how a solid plan can help you hit your business expansion goals.

Webflow Enterprise gives your teams the power to build, ship, and manage sites collaboratively at scale.

Propel your business forward with a tailored business expansion strategy.

Growing your business is essential for your company’s longevity, but the journey varies significantly across different business landscapes. Whether it’s venturing into new markets, diversifying your product line, or scaling operations, the right expansion approach makes all the difference.

A well-thought-out business expansion strategy serves as your road map through this complex terrain. It synchronizes different organizational aspects — like team dynamics and resource management — to ensure that every move is purposeful and aligned with your objectives. This alignment streamlines operations and sharpens your focus on growth-centric activities, helping your business adapt effectively to evolving market demands.

Why your growth strategy matters

Business expansion, or business growth , defines a company’s development in various dimensions, such as increasing its market share, diversifying its product offerings, and acquiring new customer segments. It’s a dynamic and multifaceted approach that involves a wide range of activities, like scaling up operations and exploring new business opportunities.

A strategic growth strategy is pivotal in this process. It acts as a compass, guiding the company through growing pains while aligning with its core values and long-term objectives. Ultimately, a growth strategy helps you build on existing successes, maximize your business’s potential, and drive sustainable growth .

Types of business growth strategies

When selecting a business growth strategy, you need to align your approach with your specific business context and objectives. For a comprehensive approach, consider these key business expansion categories.

Market growth

This strategy focuses on expanding your business’s presence — both in its existing area and new territories. It’s about enhancing your company’s market share: the proportion of total sales to customers your business captures in a specific market. Increasing this metric signifies gaining more customers, outpacing competitors, or both.

You can achieve this expansion through various tactics, including:

• Market development strategy. This involves reaching new demographics or geographical areas where your products or services were unavailable. To expand into new regions or customer segments, an SaaS company might create an internationalized site to attract clients from various countries who prefer to engage in their native language.
• Market penetration strategy. You can attract more customers from existing and new markets by intensifying marketing efforts. For example, a time-tracking software company might launch a targeted online ad campaign focusing on social media platforms popular among young remote workers. This demographic might be more receptive to time-saving apps and insights, so targeting them could allow the company to tap into a new client base.
• Market disruption strategy. A disruption strategy involves introducing innovative products and services that significantly alter the existing market landscape. A cloud storage solution might find ways to leverage artificial intelligence (AI) to suggest items worth discarding, for instance. This innovation could attract those looking to optimize their cloud storage without conducting the tedious task of auditing items themselves.

Customer growth

A customer growth strategy aims to expand your customer base, which is crucial for businesses looking to attract a larger audience and different demographics.

Targeted promotions and pay-per-click (PPC) ads are effective ways to attract new subscribers because they present your products directly to the most likely interested audience. Real-time marketing strategies also play a vital role. They let you quickly adapt to changing market trends and consumer behaviors to enhance your offering’s appeal to potential customers.

Product growth

This approach concentrates on broadening your product range and enhancing existing services to align your offerings with current customer needs . It involves evaluating market trends and customer feedback to guide development, ensuring that new features and product enhancements directly address emerging user preferences and market gaps.

Regular updates and new features in a software product, for instance, keep it technologically advanced and responsive to feedback, helping maintain user interest and loyalty.

Revenue growth

This strategy aims to improve your revenue streams. Methods like upselling to current customers, offering premium service versions, and refining pricing models can effectively increase your revenue. Offering an ad-free premium experience, for example, adds value for your users and provides an additional revenue stream for your business. Such strategies are particularly effective when they complement product growth because enhanced features and services can justify higher prices or premium tiers.

Challenges and risks of business expansion

While business expansion offers significant benefits, it also brings inherent challenges and risks. Proactively understanding and addressing these risks is key to a successful growth strategy.

Financial risks

A major challenge in business expansion involves financial risks, like the considerable investment required to enter new markets and launch new products. You also face potential impacts from economic fluctuations or currency exchange rate changes, which can destabilize your financial position.

To counter these risks, conduct thorough financial assessments to clearly understand your financial standing and the potential impacts of your expansion strategy. Establish realistic budgets to ensure you allocate resources wisely and avoid overextension or growing too fast . And create contingency funds to navigate unexpected financial hurdles — they provide a safety net that helps maintain financial stability during uncertain times.

Legal risks

Expanding into new demographics or geographic territories involves navigating complex legal risks from varying regulatory landscapes. A U.S.-based ecommerce business expanding into Europe, for example, must follow the European Union’s General Data Protection Regulation (GDPR), with noncompliance risking significant legal and financial repercussions.

Engage with local legal experts to ensure you adhere to regional laws and regulations. They can help you navigate these complex legal landscapes. Conduct thorough legal research and analysis to identify potential legal pitfalls early and implement robust contractual agreements to safeguard your business against legal challenges.

Reputational risks

Reputational risks are particularly high when entering new markets, where cultural insensitivities and ethical oversights can significantly damage your brand. Misjudging cultural nuances can alienate new audiences and existing customers, making cultural sensitivity a top priority.By prioritizing cultural sensitivity training, you equip your team to engage respectfully and appropriately with different cultures as you enter new international markets . You can also apply the in-depth market research you conducted while localizing your website to gain insights into your target audience’s values and expectations. This lets you tailor your brand messaging and approach to engage them more effectively. Establishing respectful communication strategies that resonate with your new audience enhances acceptance and builds trust toward your brand.

Discover how the right CMS can allow teams to efficiently scale rich, complex content – all without writing code.

4 analyses to conduct before expanding

Before launching a business expansion, conduct thorough analyses to understand market dynamics and your current business performance. These insights form the foundation for a successful growth strategy, allowing you to tailor your approach effectively. Here are four types of analyses worth conducting before implementing a growth strategy.

1. Customer acquisition cost

This business performance metric calculates the cost of acquiring a new customer by accounting for marketing, advertising, and other overhead expenses. By analyzing customer acquisition costs (CACs) across different marketing channels , you identify the most efficient and cost-effective channels. This knowledge helps you scale your business by telling you where to invest resources for maximum return on investment (ROI) and lowering investment in underperforming areas.

2. Customer lifetime value

Customer lifetime value (LTV) provides a long-term perspective of profitability by estimating the total revenue a customer will generate over their relationship with your company. When you segment LTV by different cohorts and demographics, you can identify which segments are most valuable. This lets you allocate resources effectively so you can focus on retaining high-value segments and tailoring your expansion strategy to attract similar audiences.

3. Sales revenue

Analyzing sales revenue lets you directly assess your business’s financial health. It involves reviewing income from sales, considering factors like pricing strategies, discounts, and sales volumes. Breaking down this revenue by product categories and customer segments can pinpoint your strongest areas. This insight informs where to focus your growth efforts — whether that’s expanding successful segments or revitalizing underperforming ones.

4. Monthly recurring revenue

For subscription-based businesses, monthly recurring revenue, or MMR, is a key indicator of financial stability and growth potential because it reflects steady income generated from ongoing customer subscriptions. Examining MMR trends and other software-as-a-service (SaaS) metrics like churn rate — the rate customers leave your service — can help you understand your subscription stability and identify improvement opportunities. A stable or growing MMR is a positive expansion sign and signals a reliable income stream to support growth initiatives.

How to develop a business growth strategy

Here’s how you can craft and implement a growth strategy that fits your unique business needs.

1. Perform market research

Start with in-depth market research to understand the preferences of your current and potential customers, industry trends, and competitive standing. Obtaining these accurate, data-driven insights early on ensures your growth goals are realistic and achievable. It also illuminates untapped opportunities and potential challenges so your strategy is well-informed.

You can perform market research by:

• Surveying existing customers
• Conducting competitor research
• Leveraging data analytics tools in conjunction with customer relationship management (CRM) software

2. Establish goals

Set clear, measurable goals to craft a successful growth strategy. These goals should be specific, measurable, attainable, relevant, and time-bound ( SMART ) to create a structured, overarching road map that directs and motivates your team.

Once you set an overarching long-term goal, like expanding into a new market or engaging a new demographic, break it into multiple short-term objectives. This helps create urgency and momentum and allows you to regularly reassess and adjust your strategy.

Suppose your long-term goal is to enhance your HR software company’s market presence in a new geographical region. You might set short-term objectives like increasing website traffic from that region by 20% within the first quarter or acquiring 15 new local clients in six months.

3. Identify your growth strategy

After you set your goals, choose the growth strategy that most closely aligns with your organization’s budget, available market opportunities, and competitive landscape. You might explore strategies such as market growth, which focuses on expanding your market share, or product growth, which involves diversifying or enhancing your product offerings.

If your organization has a substantial budget and a strong presence in a particular market, opting for product growth by introducing new services or advanced features makes sense. Since your customer base is already familiar with your brand and offerings, they’ll likely be receptive to and trust your new products and services. But if you aim to tap into unexplored markets with limited resources, a market growth strategy that promotes your existing services in new areas and different customer segments might be more suitable. Customers who aren’t familiar with your brand are less likely to buy into your new offerings.

4. Make a plan

Once you’ve chosen your growth strategy, create a detailed plan that lays out the specific actions your team must undertake to achieve your growth goals. This plan should precisely define the target markets you intend to capture and detail the steps necessary to penetrate these markets successfully. By detailing every step, you eliminate ambiguity and provide a clear direction for your team so they can execute it effectively.

Consider a scenario where your HR software company aims to expand into a new regional market. Your plan might include conducting market research in the area, tailoring your marketing messages to resonate with the local audience, establishing local partnerships, and adapting your website and services to meet local needs and preferences.

5. Monitor and fine-tune your strategy

A business growth strategy is a continually evolving plan. As you implement your strategy, actively assess key performance indicators (KPIs) and stay aware of market dynamics. This ongoing evaluation helps you understand the impact of your actions and whether they drive you toward your growth goals.

Consider adopting an agile approach because market conditions and customer preferences can change rapidly. By keeping your strategy flexible and adaptable, you can respond effectively to these changes. If you notice a shift in HR tactics or new technologies emerging, for example, staying agile means you can adjust your services and marketing approach accordingly.

As you fine-tune your services, don’t forget to leverage the insights you gained from your KPIs and earlier analyses. If your KPIs indicate that your current HR software is in high demand in a sector you didn’t originally target, consider shifting your focus and tailoring your offerings to meet this sector’s needs. By developing specialized features and functionalities catering to that industry’s unique business requirements, you can capitalize on an unexpected market opportunity and maximize your growth potential.

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