The internationalisation of a company is a process that new companies are considering every year. But the decision-making process is often full of questions.
Is selling abroad the best decision for our business? Which markets can we target? What will be the most cost-effective way to start exporting our products?
It is logical that these doubts exist. It would be illogical not to raise them. It is an important decision and as such requires detailed analysis.
From Nexport’s internationalisation consultancy helps companies that are considering taking this step. We advise and guide them throughout the process. If you are considering the internationalisation of your business, in this article we are going to talk about what it is, why it is advantageous for companies and what this process consists of.
Internationalisation of the company: what is it?
It is the process by which companies go to foreign markets to sell their products or services.
Globalisation has brought with it an increase in the internationalisation of companies. But it is an old process, as international trade has existed for centuries.
However, it is not always the same. And you don’t need to look back in time to understand this. Legislation, international relationships, geopolitics or consumer needs change over time. Each type of product or service and each target market is different. Therefore, it is a process that must be approached individually.
And so, sometimes, a reconsideration of the product or service must be made. In some cases, the internationalisation of the company is the practice of designing products or services and internal operations to facilitate the expansion of the business in the international markets to be successfully reached in order to obtain a good profitability.
Advantages of the internationalisation of the company
And what are the main advantages of this process? Here are the most relevant ones.
Increasing competitiveness, a key issue
In order to continue to sell in existing markets and to sell in new markets abroad, you need to increase the volume of manufacturing of your products. This means that you can benefit from significant economies of scale. This eventually means that your production will have a lower unit cost.
This makes your business more competitive.
Moreover, selling in foreign markets requires a great deal of organisation. And the good organizational development you are going to adopt will make you more competitive.
Greater resistance to crisis cycles and risk diversification, major advantages of company internationalisation
Selling abroad makes you less vulnerable to the eventualities that can arise in a market. If the domestic market suffers, you have options to sell your goods in other countries. And the more options you have, the more resilient your business will be to adversity or risk..
Finding new business opportunities by expanding into new markets
Reaching new markets and getting to know them better can help your company to find new business opportunities. You will be able to detect needs that your company is able to meet. And identify opportunities that would otherwise go unnoticed.
Growing and consolidating your business, an advantage to be highlighted
Does the domestic market not allow you to produce at full capacity? Do you have the capacity to grow but the market in which you operate does not allow you to develop it?
The internationalisation of your company is the way for your business to grow and prosper. To make better use of the resources you already have and to consolidate it.
Strengthening your bargaining power
When you have only one market and a small group of customers, your bargaining power is low. As you produce more and reach more markets, your bargaining power increases.
In negotiations with suppliers and distributors you will be in a stronger position. And that will allow you to reach agreements that are more advantageous to your interests.
Improve the brand image and reputation of your business through the internationalisation of your company.
Regarding competitors, suppliers and customers, your company is stronger. Your company will be perceived as more serious, more competitive and more solvent.. It will be better valued and more considered by potential customers and potential partners. And you will even be seen by the media, which can improve your branding and visibility.
Accessing internationalisation grants
You probably already know this, but some governments offer incentives, grants and subsidies for the internationalisation of a company. for the internationalization of the company. This allows you to approach this process in a safer and more cost-effective way. With support that sometimes also includes tax advantages and contacts through trade embassies.
More customers, more sales, more profits
In a simplistic but realistic summary, it all translates into more sales and more profit for your business.
What is the internationalisation process of the company like?
We must start from one premise: the internationalisation of a company is never the same for different businesses. However, there are some basic steps or processes that are usually common.
- Analysis of the commercial offer. It is essential to know your product or service well, to know its strengths and possible obstacles. It is also necessary to assess its potential to succeed in foreign markets with good profitability. Strengths and risks must be analysed.
- Market selection. Different aspects need to be considered. Among them, the potential acceptance of the product and the costs of marketing and implementation. Also, the marketing needs or the existence of contacts that make one market or another more interesting.
- Drawing up a guide for action. Internationalising a business is a process that must be done in a measured and careful way. To do so, sales channels must be chosen, and an adequate commercial strategy must be planned.
- Resources must also be allocated to these processes.
It is important that you consider all the phases of the internationalisation of the company. Even if you focus on the landing, do not forget the possible subsequent steps to be taken. It is always advisable to take them into account in the right measure in order to make successful decisions.