International Business

While global expansion efforts often yield significant benefits for businesses, the transition to a new market may also include significant challenges and uncertainties.

For this reason, this article will discuss the top global expansion mistakes to help you avoid common setbacks. This way, you can properly prepare for the transition by building an effective expansion plan, ensuring your business’ international success.

What Expanding Internationally Really Means For Businesses

The first global expansion mistake businesses make is thinking the work is done once they successfully enter a new market.

By definition, global expansion refers to when companies extend their operations to new markets and regions. But, this process involves much more than simply selling your products and services in your target countries.

In fact, sustained international growth requires tons of coordination before, during, and after you enter a new market. So, it’s essential to reflect on your business and if expansion is the next best step.

Is Your Business Ready for Global Expansion?

Global expansion isn’t right for every business. And if you try to expand before your operations and teams are ready, it could result in failure. So, before planning to expand globally, it’s important to first evaluate if you’re ready to transition internationally.

Start by asking yourself:

• Why do you want to take your business to a global level? What goals are you trying to achieve?
• Do you have enough resources and people power to expand globally while maintaining the success of your domestic/current markets?
• Does your company have the financial means to sustain international growth? Have you considered moving, labor, shipping, equipment, and other costs?
• Is there a stable demand for your products or services in the markets you plan to expand to?
• Is your management team prepared to meet international demands and challenges?

Take time to decide if this is the right move for your business and learn what factors to consider. Read more in our ultimate guide to global expansion.

8 Global Expansion Mistakes and How to Avoid Them

When properly approached, a global expansion strategy holds many benefits for businesses, including:

• Increased ROI, sales, and revenue
• Access to new markets, skilled talent, and a broader customer base
• Exposure to foreign investment and growth opportunities
• Improved company reputation and global market perception
• Enhanced competitive edge and more.

So, what are the common roadblocks that may be fatal to your expansion plans, and how do you avoid them? Let’s discuss the 8 most common mistakes businesses make when expanding internationally and how to avoid them. This way, you can dodge these pitfalls and successfully grow your business on an international scale.

1. Entering New Markets Without Researching

Entering a new market without data to back your expansion decision is a recipe for disaster. There will inevitably be markets that are not a good fit for your business. So, without proper market research, you subject your business to unnecessary risk. And this could lead to major problems such as diminished reputation, over-saturated markets, loss of revenue and time, etc.

To ensure a smooth expansion, conduct thorough local market research and test your product throughout your target regions. These tactics will help you determine:

• Demand for your product or service
• Target audience segments
• Consumer perceptions and expectations
• Competitive pricing
• Direct and indirect competitors
• Unique selling proposition
• Government regulations
• Effective sales, marketing, and advertising methods
• Local language, culture, and so on

Using this information, you can adequately plan your international expansion and ensure you enter the right markets for your business goals.

2. Using the Same Marketing and Sales Strategies

No market is identical. As such, the same marketing strategies and sales tactics that work in your domestic market may be less effective in others. Everything from how customers place purchases to their preferred communication channels varies throughout different regions.

This is because a country’s cultural and economic background impacts purchase frequency and customer lifetime value (CLV). So, failing to adapt your strategies could result in decreased conversions and, ultimately, a failed global expansion.

To avoid this mistake, it’s vital to adapt your marketing and sales strategies to the needs and preferences of each market.

3. Not Taking Advantage of International Talent

One of a business’s biggest assets is its people. And growing internationally gives your business access to a larger talent pool than ever before. This not only allows you to diversify your teams but also your range of skill sets. On top of that, local talent already has an in-depth knowledge of your new markets. You can use their know-how to enhance your local efforts and better engage with customers.

As you can see, hiring international talent holds many benefits for your business. So, failing to do so would be a critical global expansion mistake.

4. Neglecting Content Localization Strategies

Conversions become increasingly harder to achieve when your global customers cannot understand what you’re offering. And while translating content is a good start, even this strategy can lead to misinterpretations. Or worse, your content can come across as offensive to customers.

Businesses are now turning to content localization as a solution, which includes:

• Accommodating local language needs and preferences
• Opening physical offices
• Observing regional traditions and cultures
• Supporting local businesses and talent
• Providing global customer support, etc.

This strategy not only helps meet the language requirements of your markets, but also considers cultural customs, specific market preferences, local practices, and so on. The result is a more globally accessible and credible business with improved customer satisfaction and sales.

Always localize content before expanding or entering a new market for the greatest effect.

5. Not Getting a Local Business Phone Number

How your teams will communicate locally is another factor often overlooked during a global expansion.

Using the same phone number you use in your home market is a bad idea for 2 major reasons:

1. Low response rates – Customers are less likely to answer unknown or unrecognizable phone numbers.
2. Expensive for callers – If overseas customers choose to contact your business, they will have to pay high international calling fees.

Enter: Local phone numbers.

Buy local phone numbers for each of your target markets. This not only increases connection rates but also charges local calling rates, which are relatively inexpensive.

And, if you sign up with a global telephony provider, you can forward your incoming calls to any location or device. This means your business doesn’t have to be physically present in these new markets to provide services to global customers.

Case Study: CROSSNET launches in new markets with local numbers from GCF

6. Overlooking the Value of Expert Advice

It goes without saying, there are many best practices for successful international expansion. With so many moving parts, it’s easy to make mistakes or miss something important, especially if you’re treading in unfamiliar territory.

This is why expert advice is extremely valuable for companies looking to grow. They can help you understand all business-related requirements, local legislation, and other important factors in your new market including:

• Standard payment methods
• Employment and payroll laws
• Tax regulations
• Foreign exchange rates
• Contract laws
• Corporate and securities regulations
• Transfer pricing, and so on.

While expert advice can be expensive, the results are well worth it. These experts help your business avoid risks and better understand the inner workings of the target market.

7. Only Offering Phone Services in Home Market Language

Since adding new target markets means gaining new customer bases, each comes with its own needs. Among the most critical of these needs is language. And while content localization is a good starting point, it’s not enough. To satisfy these new customers at a basic level, you must also offer phone services in their language.

Let’s say you own a US company. One of your new customers in South America is browsing your localized support page, trying to find a solution to their issue. But since their issue is complex, they have to contact your business directly for an answer. So, they call your business to find that your call system operates only in English. Somehow, they reach the support department to find only English-speaking support reps again.

What happens next?

This customer will most likely grow frustrated and hang up. They might even cancel their service if they can’t find a fix and sign up with one of your competitors that meets their language needs.

To avoid this, consider setting up a multilingual IVR that caters to all of your incoming callers’ language requirements. On top of that, it’s a good idea to hire reps that speak each of your target markets’ languages, particularly for sales, support, and other customer-facing roles. This way, customers always feel supported and taken care of when communicating with your business, leading to improved customer satisfaction.

Related: 7 Must-Have Global Expansion Tools for Communication

8. Disconnected Team Communication

Communication affects many aspects of your business, including efficiency, productivity, employee trust, innovation, collaboration, turnover rates, and so on. When miscommunication occurs, it directly affects these factors in addition to other business metrics.

In fact, results of a study showed that miscommunication costs companies with 100 employees an average of $420,000 annually. And, the chance of miscommunication only increases as you expand your business and add more offices and employees to the mix.

With a VoIP service, you can connect teams distributed across multiple locations through one business phone system. This service is accessible from any location or IP-enabled device, making it a great solution for remote teams, too. You can also scale your VoIP service, as needed. Simply, add or remove users as your business expands globally.

Additionally, cloud phone providers typically offer advanced features with their services that help boost team communication and collaboration, like free in-network calling. And it’s all easily manageable through an online portal.

So, you can centralize business communication, connect distributed teams, access advanced features, and save on traditional phone system costs – all through one solution.

Expand Globally with Global Call Forwarding

Now that you know the top mistakes businesses make when expanding globally and how to avoid them, you’re ready to expand!

Global Call Forwarding can help you transition into an international business. We offer reliable global voice services in 160+ countries, which covers over 90% of the global economy. You can get local, toll-free, and international numbers in each of your target countries to add global coverage to your phone system.

We also offer free in-network calling, centralized call control, multilingual IVR, and more to fit your global expansion needs.

To learn more about how we can help you establish a global presence, call us at +1 (561) 908-6171 or chat with us online!

The rise in modern technology usage and emerging markets has made Africa a prime location for international business.

So, what does that mean for companies wanting to invest in the continent? Whether you’re a multinational business or a foreign investor looking to tap into this growing economy, it is important to take a closer look at what the continent has to offer.

Why Africa is a Good Destination for Foreign Investment

According to the World Investment Report (2022), “FDI flows to Africa reached $83 billion, from $39 billion in 2020.” This upswing was welcomed as the continent worked hard to recover from COVID-related downfalls.

Local companies and global players are continuing to invest in the continent. And governments are expanding their foreign investment policies to encourage more investors, leading to a rebound in foreign direct investment (FDI).

One such initiative is the African Continental Free Trade Area (AfCFTA). This is the largest free trade area in the world, including 55 countries with a population of 1.3 billion and combined GDP of about $3.4 trillion.

AfCFTA creates jobs and incomes, attracts investments, and furthers the development of regional supply chains. With this in place, we can expect an increase in intra-African trade by 81% by 2035. Specifically, AfCFTA’s Sustainable Investment Protocol can lead to a rise in FDI flows – both into and within the continent.

Additionally, high commodity prices, reopening tourism, and dissolution of pandemic restrictions are a few other factors contributing to Africa’s positive economic outlook.

All of this means new sources of investment are becoming available, and emerging sectors are expanding.

Remittances into Africa are Growing

As global remittances are expected to reach $630 billion in 2022, remittance inflows into Africa will continue to grow. In fact, 2021 saw gains in Sub-Saharan Africa with 14.1% and the Middle East and North Africa with 7.6%. And the driving force is an increase in investment and access to credit.

“There are significant numbers of people from Africa that live and work in Europe and America and send money to family and friends. The funds are used for investments, medical expenses, school fees, and day-to-day expenses,” explains James Kimani, Workforce Manager, NatWest.

The top 3 destinations in Africa for remittances are Kenya, Nigeria, and Zimbabwe.

In Africa, the labor supply is abundant, and the people are willing. These incoming remittances bring new economic opportunities such as the growth of small businesses and self-employment, and they help reduce poverty within the continent.

According to Kimani, “Technology has made it easier to send money. However, the main challenge as I see it is that the margins are very thin for [remittance] businesses. So, increasing volumes of transactions will make it a more viable service.”

What Makes Africa Popular

Unlike its reputation for being conflict-ridden and inundated by corruption, Africa offers countless opportunities for establishing profitable businesses. Often described as the fastest-growing continent, there are many reasons why local and global players continue to invest in Africa.

The continent boasts a large, young population and a steady rise in the middle class. It is also going through a telecommunications boom and technological revolution. This means that more and more people from the continent are online and reachable. And your business has access to an educated and skilled workforce.

In fact, keeping the growth of mobile connectivity in mind, experts at Deloitte are convinced that Africa’s telecommunications sector will attract more inbound investment and economic development.

On top of that, Africa has over 400+ companies with revenues of over $1 billion. And thanks to major multinational corporations investing in the continent’s natural resources, infrastructure, and more, Africa has a pretty sizable consumer market with over $1.4 trillion in consumer spending.

What Industries are Most Poised for Growth?

In 2022, African start-ups seem to be taking off, with more and more investors interested in and ready to support up-and-coming businesses. In fact, African start-ups attracted a record $5.2 billion in venture capital in 2021, which is more than the previous seven years combined.

Financial Technology (FinTech), particularly, has great growth potential, with new opportunities and start-ups leading the way. According to a Disrupt Africa report, investors in African tech start-ups more than doubled in 2021, an increase of 108.4%. This boom is corroborated by those in the African financial services and FinTech industries.

Munya Chiura, Head of Growth Rest of Africa, Flutterwave, suggests that FinTech has brought about “multiple opportunities to continue to drive financial inclusion.” Kimani seconds this opinion of FinTech and financial services thriving in Africa. Specifically, he explains that “Mobile Money is very big in Kenya,” referencing businesses like Safaricom, which provides the mobile wallet product, M-PESA.

African industries and emerging markets most poised for growth include:

• FinTech and Mobile Money
• Renewable Energy
• Technology
• Telecommunications

According to Chiura, “Other industries that are exciting [and poised for growth] are e-commerce, mobility services, agric-tech, and healthcare.”

Experts predict that North Africa and Francophone Africa have the potential for accelerated growth because they do not have as much venture capital funding as other regions of Africa.

Have a look at FT’s ranking for Africa’s fastest-growing companies in 2022.

But, There are Challenges in Doing Business in Africa

Despite its growth potential, there are a few things to keep in mind when doing business in the continent:

1. Skepticism of Foreign Investment

Africans tend to be wary of foreigners that want to invest and do business in the continent. This is often chalked up to historical, ideological, and political reasons. While changes in economic policy and growth in FDIs have welcomed foreign investment, there may still be a few indirect barriers preventing Africans from doing business with global parties.

So, as a newcomer, you’ll want to establish a local presence. You may even benefit from connecting and building relationships with locals on the ground.

2. Rate of Digital Adoption

Secondly, while new technologies are being developed and used, digital adoption is still relatively low. For instance, smartphone and 4G usage are not as high in Africa compared to the rest of the world. In fact, by the end of 2020, only 46% of Sub-Saharan Africa was subscribed to mobile services. And 4G adoption is expected to reach only 28% by 2025.

Because of this, not a lot of consumers even have access to WhatsApp, video conferencing, etc. And others might not know how to use such services, except for making a basic phone call.

3. Telecommunication Scene

Additionally, high tariffs still exist for African locals who want to call internationally. So, it may benefit you to have a local number in countries where you want to do business. This way, local customers and interested prospects can call your international business without paying high long-distance rates.

But, local and international toll-free numbers are difficult to come by for some hard-to-reach and rural areas. Unless telecom providers have connections with local, regional operators, they cannot guarantee connectivity to different parts of the African continent. This is true even of some major global telecom providers. So, it is always a good idea to double-check a provider’s coverage before signing up.

How Can African Call Forwarding Services Help?

To combat these challenges, you can work with an Africa call forwarding service like Global Call Forwarding. This way, you can get local phone numbers or international toll-free solutions to target different countries in Africa and then forward incoming calls to your business wherever it is located.

Our parent company, United World Telecom, has extensive experience navigating Africa’s complex telecommunications environment. This also means that you don’t have to spend time managing contracts with a bunch of different local vendors because we take care of that for you.

Since our early callback days, we’ve been providing global telephony solutions to businesses and consumers in the region. Find out how we can help you expand your business in Africa; call us today or chat with our experts online!

Part of growing your business means expanding to regions beyond your country. This can come with its own challenges — restricted access, strict investment laws, unreliable phone service, and more.

But with Global Call Forwarding as your business phone provider, you can bypass those challenges and easily enter new markets. Start building your global network of customers, suppliers, and vendors simply by using international virtual numbers.

Voice Coverage Still Matters in Emerging Markets

There’s significant potential in emerging markets — specifically, in BRICS (Brazil, Russia, India, China, South Africa) and Next Eleven (N-11) countries (South Korea, Mexico, Indonesia, Turkey, Iran, Egypt, Nigeria, the Philippines, Pakistan, Bangladesh, and Vietnam). These regions are experiencing a wave of economic transformation, supported by demographic shifts, improved mobile infrastructure, and digital advancements.

Phone calls are still a vital and secure means of communication for businesses in these rapidly expanding regions, especially across Latin America, the Middle East, Africa, and Asia. In many of these regions, internet access is limited, unstable, or costly; especially in rural areas, making video calls impractical. Voice networks, on the other hand, are more reliable and widely available, providing immediate communication without requiring a lot of bandwidth.

In markets where digital trust is still growing, a simple phone call can be the key to building credibility and closing deals—important for high-priority conversations in sales, support, finance and healthcare.

However, a significant challenge still exists—many global service providers struggle to offer reliable, high-quality voice connectivity in these regions. This gap in coverage and quality can severely hinder businesses looking to tap into these vibrant markets.

Additionally, some countries aren’t well-established or politically stable. As a result, reliable phone service and global connectivity are hard to come by. This may make it even harder to connect with potential customers or provide necessary services in these regions.

All of this, coupled with a limited-coverage telecom company as your provider, might lead you to miss out on global business opportunities.

Global Call Forwarding Goes Where Others Don’t

Most providers only offer coverage in the USA and Canada. While other services only cover major English-speaking countries like the US, Canada, the UK, and Australia. They fail to provide uninterrupted global voice coverage in other parts of the world, namely Asia-Pacific (APAC) and the Middle East and North Africa (MENA) countries.

As a global IP network owner, Global Call Forwarding can directly connect you to 160+ countries across the world. And our global coverage is not limited to just the US and UK or only English-speaking countries.

We provide reliable voice coverage in over 160 countries, covering more than 90% of the global economy. You can get international phone numbers—local, toll-free, Local 2-Way Voice, national, etc.—in these countries to establish a local virtual presence and use advanced features for all your global telephony needs. This enables you to build trust, improve call pickup rates, and offer 24/7 support across time zones.

We even offer communication solutions and can help you manage global voice coverage in hard-to-reach areas, such as Latin America, the Middle East & Africa (MEA), APAC region, the European Union (EU), remote island territories, and developing economies. Our FlexDial solution works as a regional trigger to make it easy for local customers to contact your business, wherever it is located.

Simply integrate our service with your current phone system, and you’re good to go!

Integrate Global Voice with Your Existing Communication Stack

Whether you’re using a legacy phone system or a modern cloud-based solution, our platform is built for flexibility. You can easily add international phone numbers from Global Call Forwarding to your existing business systems and applications such as CRMs or help desk software like Zoho, Salesforce, HubSpot, Intercom, etc. Similarly, through Bring Your Own Carrier (BYOC) and SIP forwarding, you can connect our reliable global voice network to your preferred PBX system or UCaaS or CCaaS provider like Microsoft Teams, Zoom Phone, etc., maintaining full control of your setup while expanding coverage.

To know more, check out our Integrations and BYOC solutions.

By integrating with us, your business can access a wide range advanced features:

• Call Forwarding: Effortlessly forward incoming calls worldwide to any landline, mobile, PBX, or SIP address, with the flexibility to update your destination numbers anytime.
• Advanced Call Routing: Direct calls based on custom preset rules to cover different time zones, locations, departments, or agent shifts.
• IVR and Auto-Attendant: Design custom call flows for your different phone lines to route callers efficiently through your global phone system.
• Failover Routing: Maintain business continuity and ensure uninterrupted communication in case of network issues or other crises.
• AI Call Insights: Analyze call traffic and improve customer interactions through transcripts, summaries, sentiment analysis, and keyword search for efficient call monitoring.
• Local Caller ID: Make and receive calls using local phone numbers across over 160 countries and increase call answer rates by displaying a local caller ID.

Together, these benefits give you an important competitive edge in emerging areas, increase customer satisfaction, and improve your international operations.

Get Global Phone Solutions Today!

Don’t wait to take your business to the next level. Partner with Global Call Forwarding and gain access to a reliable international voice platform that scales with your business. Whether you are entering to a new market or quickly growing across many continents, our global phone solutions are made to be scalable and grow with your company.

Speak with our telecom experts today! We’re here to help you identify the right communication solution that will meet your needs and budget. To start your international expansion adventure, call us at (561) 908-6171 or chat with us online.

There’s a stage in every small-to-medium-sized business’ life where you ask: is it time to take the next step and pursue international expansion? And while many companies have achieved global expansion successfully — and many have failed as well — there is a general tendency of doubt whether it is worth the gamble.

Especially now, after the global pandemic and with so many businesses having to shut down or halt operations.

But while expanding your business after COVID-19 may seem challenging, it is a worthwhile and beneficial avenue to consider with the support of the right resources and people.

Why Should Businesses Go Global?

So then, what really is the benefit of entering your business in the global market and taking the risk? Besides opening up a whole new revenue stream, international growth allows your business to establish a global reputation. Such a reputation will help you attract and retain more high-quality customers. And it will open up more investment opportunities that will help your business further scale.

What is the Cost of Global Expansion?

But is it worth the risk? The short answer: it depends on your business and the demand for your products and services.

Not every business is suited for the global stage. Maybe your industry is too niche, or your services are useful only to a specific group. In that case, international expansion may not be for you.

It also depends on which stage of growth your business is in right now. If you are a start-up still trying to find your footing, then it’s better to put off global plans. But if you are an established business gearing up to release new products and features that might appeal to a broader audience, then you might benefit from taking them global.

You need to consider international expansion costs when looking at the best countries to expand to in 2023. Important factors to consider include:

• State of the region’s economy post-COVID-19
• Demand for the product and service
• Overhead costs — office space, supplies, and equipment
• Moving costs
• Cost of labor and materials
• Logistics and shipping costs
• Country’s rules and regulations regarding foreign businesses, and so on.

Thankfully, careful budgeting and a clear expansion plan can help you keep costs low. You can use one of these various types of international expansion strategies to expand globally efficiently while staying within your budget. Additionally, instead of jumping right in and investing everything in your expansion plan, start slow with a light footprint, and grow gradually.

Learn more about global expansion strategies and best practices in our global expansion guide.

8 Benefits of International Expansion

That said, what can your business achieve by growing internationally and why should you consider it? Here are the main reasons to consider international expansion:

1. Increased Revenue Potential

Most businesses look outside when they have exhausted growth opportunities at home. But even for companies that are relatively new (7+ years in business), there’s much to gain by entering new markets. You can explore new markets, market to new demographics, offer diversified products, and increase sales as a result of all this.

2. Entry into New Markets

International expansion also means access to more markets means more customers and more sales. Part of successfully entering a new market is researching the region and its demographics to ensure your business provides valuable and relevant products and services. This means working close to the ground to understand the needs and desires of the locals in these markets.

By doing that, you would create products and services they want to purchase and invest in. This is yet another way of showing your customers and prospects that you care about how they use your service. And that is crucial to building customer loyalty and responsiveness.

Side note: Entering new markets also means exposure to new investment opportunities but more on that later.

3. Access to Diverse Audience and Customer Base

With our heavily globalized world, your business is probably already catering to a diverse audience. Yet, you are limited when you stick to just one market or region. Instead of putting all your eggs in one basket, it is a good practice to diversify and spread them across multiple target markets. This way, if one market changes or slows down, you can rely on revenue streams from other markets.

Additionally, by catering to a diverse customer base, you will be required to create new products and services to meet their needs. This gives your business the opportunity to establish itself as a local entity or local-supporting business. A broader and diverse customer base always helps generate more business and sales.

4. Foreign Investment Opportunities

New markets mean new investment opportunities and access to new materials and talent. The main benefits of foreign direct investments include economic growth, access to greater resources, job creation, innovation and R&D, and support for developing countries. Foreign investments give your business the opportunity to not only access resources in other countries but also support developing and growing economies.

5. Opportunity to Diversify Your Business Portfolio

Another significant benefit of international expansion is the ability to diversify your business portfolio. Entering a new market allows you to invest locally. You can support other local businesses, and regional sustainability efforts, and partner with local organizations that align with your mission. This further lends to your business’s reputation and brand personality.

6. Offer Global Customer Support

When you open your business to international sales, you may find customers and prospects from different parts of the world. This means you will need global sales and support teams to nurture these customers.

While running global customer support may seem expensive and difficult to manage, you can adopt a follow-the-sun support model to manage your teams efficiently and cost-effectively. A follow-the-sun model uses advanced call forwarding to route incoming calls from one location to another. For example, you can route calls coming in from Europe to your remote team in London. Or, you can forward calls made between 9-5 within the Eastern Standard time zone to your team in New York. Or, you could just forward all calls, from anywhere in the world, to your main office in Mexico.

Some common routing strategies include:

• Time-based routing – route calls based on the time of the call
• Georouting – route calls based on the location of the caller
• Skill-based routing – route calls based on the skills needed, such as language preferences or technical skills.

With such routing strategies available by cloud phone service providers, you do not need to have multiple offices globally. You can offer global care and support from your headquarters or through remote agents.

7. Access to Diverse and Skilled Talent

Next, you get to build a diverse workforce by accessing a large pool of skilled talent. Hiring global talent means variety in language skills and educational background. In fact, certain countries are known to excel in certain industries — like India with engineers and technologists. And so, you can attract high-quality talent from these regions as you expand internationally.

There are many benefits of having a diverse workforce:

• Variety in skills and talent
• Employing local workers and building local trust
• Supporting locals
• Reduced turnover rates, to name a few.

8. Gain a Competitive Edge and Improved Business Reputation

Together, all of these factors only add to your business’ diverse portfolio, helping you gain an edge over your competitors. By being accessible globally, your brand can develop an international presence and reliability. Customers will be familiar with your business and service, leading to more sales, partnerships, and profits.

Is Internal Expansion the Future for Your Business?

Expanding globally is a big step, but thankfully, there are countless resources and support centers to help businesses take this step confidently. If you need a global telephony provider to support your global business communications, consider Global Call Forwarding.

We can provide you with local and international toll-free numbers from more than 160 countries worldwide. We also offer cloud communication solutions for remote countries so that you can communicate with your customers no matter where they are located. Want to learn more? Browse through our features and services, or speak with our representatives today.

A time comes in every business’ lifecycle when it needs to expand to new markets and regions in an attempt to keep growing. However, such a move can be overwhelming and cost-heavy, especially if not planned out strategically.

Here we will go over the different types of international expansion strategies with examples. Comparing these different strategies and entry modes can help you decide how to plan your business’ global expansion.

Topics covered

• How to Enter the Global Market
  • Global Markets Post-COVID-19
  • How to Create an International Expansion Plan: 5 Key Steps
• Types of International Expansion Strategies
  1. Multidomestic Strategy
  2. Global Expansion Strategy
  3. Transnational Strategy
  4. Foreign Direct Investments (FDIs)
• Common International Expansion Entry Modes
• How Can Global Call Forwarding Help Your International Expansions Efforts?

Expanding Internationally: How to Enter the Global Market

Before we get started, why should your business even consider entering the global space? And are the benefits of expanding internationally worth the costs and risks? The short answer is, it depends. It depends on the kind of business you operate and how you execute your international expansion strategy.

When done strategically, there are many benefits to expanding internationally, including:

• Access to new markets and a diverse customer base
• Increased ROI and profits
• Access to local and skilled talent and workforce
• Global business recognition and reputation
• Establish regional offices
• Stay ahead of the competition
• Access to foreign investment opportunities.

And since you open new revenue streams, you can expect the ROI and profits to offset the costs spent in entering new markets. But for everything to fall in place according to plan, you first need a solid international expansion plan.

Global Markets Post-COVID-19

Expanding globally after COVID-19 can seem a bit challenging. But with the right plan and resources, you can enter a new market smoothly and cost-effectively and add a new customer base to your business profile.

The key to successfully expanding your business is to:

1. Create a clear global expansion plan.
2. Choose the right international expansion strategy.
3. Identify the best entry mode for the new market.

Let’s look at each of these factors in detail.

How to Create an International Expansion Plan: 5 Key Steps

Before we compare the different types of international expansion strategies and entry modes, let’s look at the critical steps involved in creating a global expansion plan. This will give you context about what your business needs so you can identify the right strategies for international growth.

1) Pick the Right Markets to Enter

The first thought generally is to expand to a big, metropolitan area. However, certain businesses and industries do better in less developed and developing regions. Depending on your business type and stage of growth, identify the right markets and regions for your business to expand. And local market research can help with this.

Don’t know where to start? Here is a list of the best countries to expand to in 2021.

2) Conduct Market and Competitor Research

Then, you need to analyze how well your product or service will do in this new region. Is there a demand or market for your products or services? What is the quality of that demand? What demographics or portion of the population can afford to buy your products? How many competitors will you face? What is the demand for these competitors, and what resources do they have available? How does that stack up against your organization?

3) Understand Country and Governmental Regulations

Every country has its own foreign investment regulations. And so, before you start setting the groundwork for your expansion plan, you first need to familiarize yourself with these regulations. You can do so by visiting the country’s primary website or their trade website. For example, the United States has an International Trade Administration website where you can get information for US and international businesses. You can also learn more about these regulations on the country’s embassy websites.

4) Finalize on Entry Mode(s)

Next, you decide what entry mode is best suited for your business. Below we define and compare the different entry modes you can choose from.

You might even consider keeping a light footprint. That is, holding off on infrastructure and heavy investments till your foreign operations have grown and matured. You may decide to hire a few local employees and use cloud-based communication solutions to manage your operations. Have these employees identify untapped opportunities, conduct market research, and test the market gradually. This will help you save costs in the long run and ensure higher ROI.

5) Prepare Marketing and Expansion Plan

Once you have identified your markets and entry modes, you can start making a global expansion and marketing plan. This will outline your moves, budget, advertising campaigns, overhead requirements, and so on.

Learn more about global expansion best practices and planning strategies in our free global expansion guide.

Types of International Expansion Strategies

Here are the different strategies to expand internationally. But which one of these international expansion strategies is suitable for you depends on your business’s specific needs and goals. So educate yourself on the options available and make a decision accordingly.

1. Multidomestic Strategy

A multidomestic strategy focuses more on catering to locals within the new market. It is known as the strategy that sacrifices efficiency to improve the responsiveness of local requirements. Rather than forcing its parent country’s requirements and preferences onto the new market, it customizes its offerings and services to better meet the needs of the locals in the new market. As such, marketing and advertising efforts are geared towards the locals instead of taking a universal approach. A great deal of local research is required to execute a multidomestic strategy successfully.

Advantages of multidomestic strategies

• Diverse customer base
• Increased local responsiveness

Disadvantages of multidomestic strategies

• Uncertainty because of tailored and customized strategies spread across various countries
• Hard to achieve economies of scale that would help reduce costs

Examples of multidomestic strategy

• MTV customizing programming on its channels in different countries
• Heinz removing garlic and onion in its Indian ketchup recipe
• KFC selling tempura crispy strips in Japan and pastries with chicken in France
• McDonald’s offering multiple vegetarian options in India such as McSpicy Paneer, McAloo, and Green Chilli Aloo Naan

2. Global Expansion Strategy

A global expansion strategy is the opposite of a multidomestic strategy. The global expansion strategy is centralized—that is, the primary office controls it. This strategy maximizes global efficiency, so products and services are standardized and not tailored for local markets. The business units in each country are considered interdependent and respond to the primary office.

Advantages of a global expansion strategy

• Low risk for the firm
• Emphasizes economies of scale
• More opportunities to utilize innovations developed at a corporate level
• Effective for firms whose product is mainly hidden from the user’s view and where differences in local preferences is not an issue or requirement

Disadvantages of a global expansion strategy

• Trouble gaining a high market share in local markets
• Coordinating strategies and operations may prove challenging to manage
• Resources need to be shared and coordinating across boundaries and countries

Examples of a global expansion strategy

• Intel
• Microsoft offers the same product globally but with local languages
• Procter & Gamble (P&G) creates global brands whenever possible

3. Transnational Strategy

A transnational strategy combines the multidomestic and global international expansion strategy to create an international expansion strategy that caters to both global efficiency and local needs and responsiveness. Therefore, the two main characteristics of a transnational strategy are:

• High global integration
• High local responsiveness

To this end, balance and flexibility are key to executing a successful transnational strategy. And companies that do so perform better than competitors using a multidomestic or global expansion strategy.

Advantages of a transnational strategy

• High efficiency and low costs
• Wider reach
• Diverse market

Disadvantages of a transnational strategy

• Difficult to centralize and manage international offices
• Potential risk of alienating local customers

Examples of a transnational strategy

• McDonald’s offers custom menu items globally but has a cohesive global identity
• Unilever sells different brands in different regions but still maintains a singular corporate identity

4. Foreign Direct Investment (FDI)

FDI is when an organization enters an international market by investing in that country. Of all the international expansion strategies, this one is a good idea when demand and size of the market justify the investment. Some things to keep in mind when considering FDI:

• Your business can benefit from low-cost labor and cheap materials.
• You can avoid import duties when you manufacture locally.
• There may be import restrictions and limits for certain products.

Advantages of FDIs

• Retain control
• Low-cost labor, cheap material and manufacturing costs
• Diversified investors portfolios
• Provides financing and technology to developing countries
• Access to subsidies, tax breaks, and other concessions from the government

Disadvantages of FDIs

• High investment required
• High risk, related to change in policies against foreign companies
• Investors may have fewer moral attachments
• Potential unethical access to local markets

Examples of Foreign Direct Investment

• Mergers & acquisitions
• Horizontal FDI, where a firm replicates its entire organization in different countries
• Joint ventures
• Research & development
• Facilities
• Sales and customer support
• Manufacturing and logistics
• Retail and services
• Administration
• Greenfield investments

Common International Expansion Entry Modes

There are a few different ways to enter a new global market. And each of these international expansion strategies comes with benefits and potential issues. Here we will look at the various international expansion entry modes that your business can choose from when deciding how to enter a new market:

How Can Global Call Forwarding Help Your International Expansions Efforts?

Global Call Forwarding has helped thousands of businesses enter new markets and regions cost-effectively. Whether you plan to open regional offices or want to conduct operations virtually, our cloud communication solutions can ensure that your business communicates with team members and customers efficiently. Our high-availability network and partnerships with local, regional providers enable us to offer our customers cloud phone numbers (local and toll free) from more than 160 countries worldwide. And our phone numbers come equipped with advanced call management features such as call routing, automated voice response, softphones, and more.

We can support your international expansion strategies and help you enter new markets with a light footprint and low overhead costs. And as your business grows, you can add more service lines and features to our highly scalable solution.

Expanding internationally is a big step, and we are here to make the process less stressful when it comes to business communication. Want to learn more about how we can help you set up more points of contact in different countries and regions? Speak with our representatives today or chat with us online!