The Benefits of Going Global by Adelene Fri 20 Jul
There are many benefits when a company decides to sell their product in the international market, and also many risks associated with the move.
Firstly, in the production of goods, expanding the customer base internationally gives companies an opportunity to optimise economies of scale. This is the increase in production, resulting in the unit price of the good to decrease, overall increasing total revenue and profitability for your business. This can be financially rewarding if a company takes into account the following:
The first step in the strategy is deciding how much to invest. Expanding your product into the market is an opportunity to build and create a new consumer and target market group, creating global awareness for your brand.
In order for this global recognition to occur, a company must be willing to financially back the move and research into the market is the most fundamental part of going global.
To create and build brand awareness in an international market, a company must have a 3-5 year plan minimum.
As brand awareness is key to expanding the target market, this time invested will increase the exposure the consumer has to your brand.
Well-established brands gain trust from consumers and the target market are more likely to shop with your brand once they are familiar with it.
Research is key
In order to expand and sell a desired product to the overseas market, research is key, as understanding and researching the market will determine the likelihood of success.
Research will determine which countries to enter, the decision to add, delete or modify products in an international market and deciding the best way to distribute the products to the consumers in the international market.
Understanding the target market is the key to providing them with a product that they want at the ‘right’ price.
Research will determine this price that the consumers are willing to pay and will also give insight into the demand curve that links the price and quantity.
Political and economic factors
The political and economic situation of the country must be understood before entry is decided, as this will make or break the company and the particular type of product they want to sell in the international market.
The country and their policies, regulations and technical norms can significantly impact your chances of exporting your products to a foreign country. This is one of the most important parts to research when looking at the global strategy.
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