The benefits of global expansion: 6 compelling reasons to go global

If you have a successful business in the U.S., expanding globally could be a logical step to grow revenue. Companies of all sizes have found new opportunities and gained a competitive advantage by entering global markets. 

Why go global? The advantages of international business

Done right, globalization delivers sizable advantages for your business, including expanding your customer base, opening up new talent pools, driving revenue, and increasing profits. Establishing your business in new markets can take a considerable investment, so it’s important to carefully assess how well-positioned your company is for global expansion before making the move. 

Factors to consider when evaluating if global expansion makes sense

Here are some things to consider when determining the feasibility of global expansion for your company:

Investment required

Globalization takes a significant commitment of resources. It’s important to carefully estimate the investment of both time and money needed for international expansion in order to determine if it’s truly the right move for your organization

Human resources

Doing business in a new market means navigating differences in employment regulations, as well as cultural norms. Making sure you have the right human resources processes and procedures in place is crucial for your success

Market opportunities

Choosing the right markets is key for maximizing the benefits of global expansion. Consider which international markets offer the greatest potential for new customers and revenue, where your company already has some traction in the marketplace, and how difficult it will be to adapt your current offerings to fit local needs

Legislative and regulatory compliance

Laws vary widely from one country to the next, so it’s important to understand the regulatory environment in each new market you’re considering entering and to evaluate whether doing business in that market makes sense given local regulations

Local culture, trends, and norms

Business is shaped by culture and customs as much as it is by local laws. For your global expansion to succeed, you’ll need to consider how your organization can do business in overseas markets in a way that feels culturally relevant to local customers

6 key benefits of international business

If your company decides to invest in global expansion, here are some of the benefits you can expect:

1. Access top talent on a global scale

Employees are a company’s most valuable resource. Businesses that excel at talent management grow 58% faster and are 72% more profitable. Globalization expands your company’s talent pool worldwide, allowing your business to hire the very best employees and to reap the benefits of a more diverse workforce. Diverse companies have 2.5 times higher cash flow per employee, and 3 out of 4 job seekers prefer to work for diverse companies

2. Improve cost efficiency

When your company expands internationally, you increase the market for your offerings and can boost production, which allows you to enjoy even greater economies of scale. Access to new labor markets, resources, and technologies can also help you increase efficiency and lower costs 

3. Leverage financial incentives for entering new foreign markets

Expanding into overseas markets increases opportunities for foreign investment in your business, which brings with it a wide range of benefits, including spurring innovation, opening up access to new technologies and business models, and increasing connections to global supply chains

4. Expand your customer base

Globally, consumers spend 44 trillion US dollars each year, and the value of the global B2B e-commerce market is nearly 18 trillion US dollars a year. Taking your business global is one of the best ways to expand your customer base. In turn, expanding your customer base can help increase sales and revenues, as well as generate higher profits

Additionally, diversifying your markets and customer base helps to create greater stability for your business. If there is an economic downturn or some other unforeseen circumstances that disrupt sales and revenues in one of your markets, you have other markets that can help to balance your company’s finances

5. Increase consumer trust within overseas markets

Investing in new global markets gives your company the opportunity to win the trust of new local customers, and doing that successfully is good for business. In a survey, 7 out of 10 consumers said they make more purchases from brands they trust. On average, people spend 25% more with trusted brands

6. Cultivate competitive advantages

Globalization can give your company an edge over competitors in a number of different ways. If you expand into a market where your competitors don’t do business, for example, you’ll likely gain a first-mover advantage. 

Moving into overseas markets expands your options for potential suppliers, increasing competition for your business, which can lower costs and ultimately improve the quality of your products. 

Likewise, globalization also gives you a larger talent pool, increases your access to new technologies, and lowers production costs—all of which enable your company to offer high-quality products or services at a lower price for your customers

Challenges of global expansion and international business

Naturally, there will be some hurdles your business will face as you expand internationally. Here are some potential challenges to be aware of:

Linguistic and cultural barriers

In a survey, 76% of shoppers said they prefer purchasing products with information in their own language. Similarly, 66% of B2B buyers are willing to spend more for a product or service that delivers a localized customer experience. In order to win over customers in new global markets, you’ll need to speak their language and communicate with them in a culturally meaningful way 

Compliance issues

As your business expands internationally, you’ll encounter vastly different legal environments from one market to the next, affecting everything from governance to hiring to financial reporting. Staying on top of changing regulations is crucial for your global success

Significant costs for both expansion, and termination in the case of failure

While expanding your business internationally does offer important advantages, there are also significant costs associated with it. If you’re establishing a foreign subsidiary or legal entity, which many businesses do in order to comply with local regulations, you’ll need to budget for the initial setup and for annual maintenance fees. 

Other costs you’ll need to take into account include: real estate, taxes, transportation, and labor, which may have stricter protections for workers that raise costs, depending on the market. If your expansion effort doesn’t successfully meet your business goals and you ultimately decide to leave the market, termination costs can also be significant

Managing employees on a global scale

While globalization opens up new opportunities, it can also create additional complexity for your organization. Managing a workforce that’s spread across countries and time zones can certainly pose a challenge. 

In a survey of executives heading up global companies, 74% agreed that maintaining control of international activities was difficult. You’ll need to consider varying employment regulations, how to organize scheduling and workflows, the best way to train and offer professional development for all your employees, and how to navigate cultural differences

A professional translation and localization partner is key for your global success

Globalization offers a wide range of advantages for your business—everything from expanding your talent pool to lowering costs to building new customer bases. However, there are challenges to navigate on the way to global success.

At Acclaro, we partner with your company during every step of your international expansion. We can help you determine your globalization strategy and develop a translation and localization program that’s specifically designed to meet—and even exceed—your goals. 

Get started today to learn how we can help your business open up new opportunities around the world.