Chapter # 2 : Why International Business
What does this have to do with exporting and international business?
When you play the stock market, it’s essential to:
- Spread the risks
- Keep informed
The same is also true in business. To put all your eggs in one basket (market) is dangerous. If the market collapses or experiences poor performance, your business will be in trouble. Many companies only work on the domestic market and feel that that’s enough. However, that local market may develop slowly or be saturated with established companies, competitors and suppliers.
What happens when the service life of your products or product life cycle is getting shorter? You need to grow. You have to find new markets to survive and remain profitable.
Business today is global. When you’re looking to expand, you have to look overseas. Remember, foreign companies are also looking for growth, and they are aiming at your domestic market and maybe even yours in particular.
To increase your sales at home, you have to take market share from the competition, especially if the market has already matured. To get the same sales from a market 10 times your domestic size, you only need a small portion. Furthermore, that market could be developing quickly.
By expanding to several markets, spread the risks. If the business in one country doesn’t work out as well as expected, the overall effect will be minor.
Assume you’re working in 10 markets and each carries 10% of your sales. If one of those decreases by 30%, you only lose 3% of your total sales. If one drops out completely, you’re still only talking about 10%.
As with your stocks, you want to keep updated. Which are the interesting stocks, and what are the expected developments of those companies. For your international business, you also have to keep yourself informed. Which markets are of interest, which economies are developing and what are your competitors doing?
There’s an enormous amount of information available. The question is how to find what is appropriate. One way is to use commercial online databases.
Use the international market for business growth and for spreading your risks. It takes time to enter new markets but you need to do it now!! When your domestic market begins to slow down it may already be too late to look for new alternatives.
Don’t let the fear of international business stop you. Education and understanding of the global marketplace will help you overcome these obstacles.
Most countries welcome new products and new technologies. However, they are too often turned off by what’s often perceived as an arrogant disregard for their values and ways. Learn as much as you can about your new market, the culture, language, business, practices etc.
Still, hesitating? You want to go out there but don’t even know where to begin? A good international trade consultant can be of immense benefit. Their services range from advice about the next step to actually doing it all with you.
There are many international business options. Identify where you want to go, know what you want to achieve. Do your homework and then, go for it. The global market is full of opportunities. Don’t miss yours!
Leif Holmvall, President
Export Pro Inc.
In our book “Export & Import – Winning in the Global Marketplace”
ISBN 978-0-9681148-1-0 those topics are covered in depth. You can also buy our book for less than $10 as an e-book visit e.g. https://www.amazon.com/dp/0968114814, where you can read part of the book.
Follow us on LinkedIn https://bit.ly/3nvAfY9