Steps to Internationalize your Service Business
Internationalizing a service business is a
significant undertaking, but when you approach it methodically and
thoughtfully, it can transform your company and lead to incredible opportunities.
Let’s take a look at the steps toward internationalizing a business.
1. Choose Your Expansion Country
Using reliable and accurate metrics, evaluate the
market attractiveness of each country under consideration. Look for the best
fit for your particular products and services, noting the following factors:
·
Demand for your products and services
·
Local regulations that would affect your
business
·
Taxation issues
·
Licensing and certification
2. Conduct a Market Analysis
Tools like Porter’s Five Forces and the classic SWOT
analysis can be beneficial in determining the advantages and disadvantages of
setting up a business in specific countries. As you analyze your options, pay
special attention to the external environment, since this will be the most
substantial departure from your current operations.
3. Plan Your Market Entry
Will your current business model work well in the new
country? To successfully enter the new market, you may want to consider
acquiring a local business to capture their core business expertise. In this
way, you can access local knowledge or make a strategic alliance with an
existing company.
4. Evaluate Your Market Position
You know and understand your position in the current
local market, but you’ll need to consider your positioning in international
markets. Evaluate the competition and their positioning to help you find your
own place. Some businesses find that they must seek out a new niche or modify
their products to fit well in their new market.
5. Consider Your Targets
Due to differences in consumer taste, lifestyle, and
spending, you may need to target different customers internationally than you
do at home. Carefully analyze geographical, demographic, psychographic, and behavioral data as you narrow in on your target customer base.
6. Fine-tune your Services
Do your current products and services meet the needs
of consumers in your target countries? Many businesses find that they need to
adapt their products / services to suit the needs and desires of their
international customers.
Market research will help you to determine demand in
your target countries. If you can meet specific needs and wants of local
consumers, your chances of success will increase substantially.
7. Evaluate Core Competencies
Once you’ve gathered about your market position,
target customers, and products and services, it’s time to evaluate your core
competencies.
Do you currently have access to the skills and
resources you need to position your business internationally successfully? If
not, do you know how to acquire those core competencies? Will you be able to
hire locally for critical positions? Alternatively, will you need to relocate
workers for specific jobs?
8. Analyze Supply Chain and Value Chain Options
Internationalizing a business requires attention to
importing / exporting, franchising, regulations, and licensing. Do you have
systems in place to manage all elements of your supply chain? How will you
acquire everything you need in your new location? Moreover, how do the costs
stack up with your current cash flow and budgetary requirements?
Consulting with an international business expert can help you to determine whether now is an advantageous time for your company to internationalize. Team up with an adviser who knows the ins and outs of the process.
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