Over the last years, many small and medium business companies are more often exploring the export markets because of various factors. For mentioning some, the liberation of foreign markets, the developments in transportation, the easiest access to information about different opportunities in the different market worldwide, the desire to diversify investments.
Despite the above said advantageous, the process of internationalization is quite complex. A company that is looking to develop foreign markets for its goods and services need to choose the most appropriate entry strategy as well as consider the advantages and disadvantages associated with each one by giving always due regard to the system of law in place in the foreign market.
The entry strategies include:
- licensing a foreign entity,
- entering into a partnership with an existing entity in the target market,
- setting up a new entity in the target market either alone or in partnership with another local entity, and
- acquiring an existing entity in the target market or merging with one.
HOW CAN WE HELP
If you are thinking of setting up a business abroad or simply aim to extend an existent one, we’re here to help you. By using the most advanced tools, resources, and techniques to analyse, develop, and represent your case, we can assist you in:
- performing a preliminary analysis of the law in place in the target market;
- choosing the most appropriate entry strategy, whether contractual arrangements or equity structures;
- negotiating, drafting, concluding domestic and complex international arrangements;
- setting up the legal entity;
- developing a tax plan;
- looking for funds and financing retrieval for your business;
- dealing with intellectual property matters;
- obtaining any other support for developing and managing the business.
Seeking international growth as an importer-exporter implies facing a variety of new environments and new ways of doing business. Some of the specific advantages presented by successfully growing globally are:
- You can extend the sales life of current products or services. If a product or service is getting obsolete in your domestic market or the domestic demand for it is not enough to expand your sales, you should think about introducing it in other markets with a higher demand. Be sure you choose a market that offers opportunities and whose customers desire to buy your product or service, then you will be able to obtain a new source of revenue.
- You can exploit technological improvements and know how, facing the competition successfully in the international markets.
- You can overcome some government’s restrictions on the production and distribution of certain commodities in the domestic market. These restrictions are generally imposed for social reasons.
- You can Reduce dependence on current markets by spreading your risk.
- You can have fewer business risks.
Whilst going global presents various advantages, it is also accompanied by a lot of aspects that need to be taken into account. The mechanism of carrying out business internationally is long and complex. Therefore, you should be well established and profitable in your domestic country before planning and be developing your international business strategy.
In particular, you should consider the following features:
Economic, technology, social, and environmental factors of the foreign country
If you want to run successfully your business abroad, do not ignore the cultural differences that shape the marketplace. Do your research about the country, get in touch with local entrepreneurs and build a relationship with them. Moreover, analyze your target customers and find out the reasons according to of which they should be attracted by your product or services.
Be aware of the political stability of the country you are planning to start/extend your business in and therefore monitor political development. By doing so, you can take appropriate action at any time. International terrorists, difficulties in moving funds within the country and interference in the ongoing operations, are only an example of the risks that can be occurred.
Assume that the business will be carried out in English, but be aware that your audience will not be bilingual. As a result, you should familiarise with the local language of the foreign country as well as provide the information of your products or services according to it. Bring your own interpreter whenever required and do not rely on the information provided by other parties.
Intellectual property is regulated by the law of the country you decide to invest in and represents an important asset. Therefore, be aware of any regulations that may affect your business in the foreign market.
By going global, you will be involved in several contracts, both domestic and international, so it is important fully understand the fundamental issues regarding them.