The U.S. economy has proven to be very prosperous for many businesses. Needless to say, more and more businesses are looking for approaches that can take business operations to the next level.
As a result, expanding to global markets has become an appealing option. Both large and small businesses recognize the benefits the global market has to offer. Dan Brutto, President of UPS International states with 95 percent of the world’s consumers located outside the United States, there is much opportunity for economic expansion for U.S. businesses internationally.
For Americans, Spanish-speaking countries are closest, covering Central America and much of South America, as well. Add in the fact that Mexico is the United States’ third largest trade partner and it’s obvious we’ll be doing business for a very long time.
Some of the countries are already thriving markets while others are only going to grow in size and importance. Thinking ahead is always a sign of success. In the business world getting an online MBA in Spanish is one step ahead of the competition. It makes staying ahead, easier.
By expanding into an international market, businesses are able to capitalize on all the benefits a global market has to offer. Needless to say, a company’s decision to expand internationally impacts not only products, services, and operations, but also impacts the workforce and consumers. As a result, it is a risky decision business leaders make each and every year.
Nonetheless, it is necessary business leadership to assess the risks and benefits of expanding operations globally. By doing so, businesses are better able to predict challenges and implement a strategic approach that will allow the business to outweigh the volatility of the new market. After all, moving operations into international territory can be very challenging.
However, Hilka Klinkenberg, founder of Etiquette International in New York City, suggests that less than 25 percent of U.S. businesses are successful in the global market. Failed attempts are typically attributed to the lack of preparation, planning, research, cultural understanding, and strategy among other key factors. However, as companies seek to increase sales and revenue, more businesses are seeking to expand operations globally.
Here are some of the popular reasons businesses decide to take operations into a global market:
Lower Costs
Oftentimes, businesses are able to reduce costs by expanding into new markets internationally. In fact, more economical cost effective solutions are available to meet the demands of businesses when operations go global. This in part allows businesses to obtain the necessary resources to run operations at a lower and more affordable cost. Reduced labor costs, innovative technology, and natural resources are all advantages businesses can capitalize on in moving operations internationally.
Diversification
Diversification is another attractive benefit of expanding internationally. A business may desire to introduce a specific product line into a new market. When companies are able to expand into new markets in a variety of countries, businesses are better able to weather the storm of recessions and economic decline. Furthermore, businesses become less vulnerable to fluctuating markets. Business leadership has recognized when one market is failing another market is prospering.
Competition
Businesses that are able to expand internationally are able to maintain a competitive advantage. This is because employers are able to increase sales and profits that may have been untouched by the competition. This in part allows the business to set a standard and establish a reputation in new segments. Furthermore, such an approach allows a business to make a name for itself in the new international market.
As international markets continue to expand, develop, and be productive, more businesses are becoming more interested in moving business operations internationally.
In fact, many businesses expanding operations internationally have proven to be very successful. For example, larger businesses such as Apple and Coca-Cola have been very prosperous in a global economy. After all, for many businesses, expanding business operations into new markets typically equates to increased sales and profits.
Through the implementation of a well-developed strategy, business leaders are better able to map out a company’s transition into an international market.