The globalization of the modern economy contributes to the desire of companies to develop and enter the international market. Such a step enables them to strengthen their position, find new customers, and as a result, increase profits. In addition, operating in the international arena, the company becomes more competitive and mitigates the risk of losses that may occur in the domestic market.
With the advent of the Internet, the world has become even more globalized, and it has become much easier to present your product. However, the already established strategies have new items added. They require training and the ability to work in the online space. Depending on its field of activity, the company develops its strategy of operation on the global market.
Thanks to modern technology and the Internet, even a small company has the opportunity to enter the global market if it properly allocates resources and thinks through a marketing strategy. At the same time, it is important to take into account the specifics of the region, its features, and traditions, so that the product offered finds its target audience.
How to adapt your business to the global environment
Let us look at the example of the gambling industry where many companies from different countries operate. Before entering the international arena, specialists carefully study the culture, traditions, and economic components of the region where they plan to deploy their activities.
It is equally important to consider the political situation, which is reflected in legislative initiatives that open or block opportunities for legal activity.
For example, a company providing gambling entertainment should understand what permits and restrictions it may face when it enters a particular region. Legitimate activities will allow to reveal all the possibilities of the company, attract more clients, offer a wide range of functionality and a choice of payment systems. At the same time, it will not be required to make efforts to bypass blocking. This means that consultations with lawyers specializing in local laws are a must.
In addition, it is important to take into account the tastes and traditional preferences of the users. For this purpose, the website offers both popular slot games, machines with traditional themes for the region, in order to cover most of the audience. This is the main part of the marketing strategy, which will help to adapt to the new market.
How to enter the international market
Those companies that feel ready to go global do so for several reasons:
- the desire for increased profits and business expansion;
- the local market is overcrowded with similar products and services;
- to minimize possible losses during the crisis by having a presence on the international market;
- possession of unique technologies that will be competitive in the global environment.
Capitalization increases due to expansion of the field of activity, and the company becomes more resistant to changes in the legislative field, as well as the activities of competitors.
Before acting, it is necessary to conduct a thorough analysis of economic feasibility, research current and future trends, and forecasts. In addition, it is important to consider the financial soundness of the company, whether it will be able to compete and implement its product or service in the new environment. At the same time, the support of partners from local businesses is welcome.
A good example of a business adapting to a new environment is the IT sphere, which faced difficulties in operating during the pandemic. Companies use several techniques to gain a competitive advantage:
- transition to cloud technologies;
- priority to peripheral computing;
- autonomy of IT operations;
- expansion of AI capabilities;
- search for qualified employees, retraining of employed professionals.
Management Strategies and Risks
According to Michael Porter, sources of global advantage include actions such as savings due to the production scale and geographic expansion, finding highly qualified marketing personnel to arrange an effective advertising campaign, and business mobility, which allows for painless reassignment of capacity.
Considering the results, and the recommendations of experts, it is important to answer three questions:
- where – which markets you plan to enter while keeping a balance between risk, cost, and industry opportunity;
- when — how favorable is the time to present your product or service at the moment;
- what position the business will take pursuing an aggressive policy or a soft consistent takeover.
Then a strategy is developed that takes into account financial capabilities, management control. Three main options can be used:
- Export activities – when the product is produced in the local market and supplied to other countries. It can be direct, indirect, and joint exports. The advantages of such an activity include a kind of reconnaissance, which will indicate how much demand for the product there is in the new market.
- Intermediary activities – transferring a license to a foreign firm, franchising, contract manufacturing, or joint venture. Distribution of responsibility and control reduces risks and losses.
- Building a business from scratch or acquiring a controlling stake in a foreign company. The advantage of this option is maximum control, while the disadvantages include significant financial investments and time expenditures.
Business from scratch
|Acquisition of controlling stake
Contract with an intermediary in the local market for deliveries to other countries
Regardless of whether a company is already operating in the global sphere or just planning to enter the international market, there are many factors to consider in order to remain competitive, maintain a sphere of influence on the segment it occupies, and make a profit. It is an ongoing painstaking work, which, if approached properly, will help create and expand a successful business.