Going Global: How to Develop an International Expansion Strategy for Small Business

Going Global: How to Develop an International Expansion Strategy for Small Business

Are you considering expanding your business globally? Or you've already started on this path but aren't seeing the results you were hoping for. 

As your company grows and gains market share, you may be considering how to continue its rapid expansion into new territories on a global scale. According to a report from global fintech platform Airwallex, UK-based small and medium-sized enterprises (SMEs) are optimistic about international growth, with nearly three-quarters (70%) planning to expand into or further into foreign markets in 2023. 

Going global can be a risky and daunting experience, but that shouldn't stop you from expanding your business. In this article, we will explain what it means to expand into new markets, the advantages and strategies of going global, and an overview of the initial steps required to achieve your international business goals. We will cover the following topics: 

  1. What is a global expansion, and why do you need a global expansion strategy?
  2. The benefits of globalisation 
  3. The types of expansion strategies 
  4. International expansion challenges and solutions 
  5. How can small businesses expand internationally? 
  6. How to create your global expansion strategy? 

What Is Global Expansion, and why do you need a global expansion strategy?

Global expansion refers to the strategic process by which companies extend their operations and reach beyond their home market and into foreign markets. It’s different from selling across borders.  

Global expansion requires clear objectives, extensive research, allocating resources, and establishing timelines and budgets in detail. Whereas selling across borders often refers to reacting to the opportunities from the overseas market. But for many small businesses, selling across borders could be a window to understand the opportunities and potential customers in the overseas market and the first step to help form a more structured international expansion strategy. 

Although it might be a daunting process, the rewards of going global are considerable, and a structured strategy for expanding your company can help you: 

  • Expand to new markets at the right time 
  • Save time and resources efficiently 
  • Reduce risk and stay compliant with local regulations 
  • Scale your business faster 
  • Increase your revenue 

The Benefits of Globalisation

Globalisation has several impacts on the world economy, including increased trade and lower prices for goods and services. This is because countries can specialise in producing goods and services; they have a comparative advantage, leading to greater efficiency and lower costs. 

However, globalisation also intensifies competition within domestic markets for products, capital, and labour and among countries that adopt different trade and investment strategies. This competition can have both positive and negative effects. 

The most compelling reasons for expanding into international markets are listed below. 

Access to New Markets & Customer Bases 

Companies like yours benefit significantly from globalisation because it opens doors to previously inaccessible markets. Bilateral and multilateral trade agreements facilitate the expansion of businesses into new markets. It allows you to expand your brand's global reach, learn more about the market, and increase revenue. 

Development of Product Standards

Companies can guarantee product consistency by adopting global standards. Experts from around the world agree on ISO standards. Consider them a formula that describes the best way to standardise a wide range of activities, such as manufacturing, process management, service delivery, and material supply. Most of the world's well-known technology companies have adopted the international product standardisation strategy. It has helped them achieve global product consistency.

Creation of Diversely Skilled Workforces

Managing an international workforce can be challenging but positive in the workplace as it brings together different ideas, insights and perspectives. According to a Boston Consulting Group study, companies with more diverse management teams generate 19% more revenue due to innovation. It demonstrates that diversity is more than a desirable metric; it is essential to a profitable business.

Creates New Revenue Streams

When a domestic market becomes saturated or stagnated, creating new revenue streams becomes crucial for businesses to sustain their growth. One effective way to do this is by exploring international markets, which may offer untapped potential for expanding a business's customer base and increasing revenue. Alternatively, if a product or service reaches the end of its lifecycle in one market, it may still have the potential to thrive in a new market. By diversifying their revenue streams and exploring new markets, businesses can reduce their dependence on a single market and increase their chances of long-term success.

Boosts your Global Brand Recognition

Brands with a global presence are seen as more credible and valuable by customers, who see them as part of a more significant, more established industry.  It fosters a more personal relationship between the business and its customers, strengthens existing ties between the company and its customer base, increases brand value, and sets the business apart from competitors. Likewise, it bolsters prominent brand awareness and marketability. 

Types of global expansion strategies

Global growth can be a significant challenge for any business. What you found to be successful domestically may not easily replicate abroad due to differences in cultural norms, consumer preferences, and market competition. 

In fact, according to Harvard Business Review, going global too quickly can be catastrophic for a company. Only 40% of companies reported a return of more than 3% from international expansion. So why is that? Companies were unprepared for the difficulties of global expansion and saw it more as a fallback growth strategy rather than a strategic investment. 

Many companies must develop a well-thought-out expansion strategy before they rush into growth. Therefore, the first step is to agree on which business model to use. Below we introduce four types of comment international expansion strategies.

International Strategy

An international strategy is a business approach where a company seeks to expand its operations beyond its domestic market by offering its products or services in new countries. It requires maintaining a consistent standard of product or service quality across all locations so that customers in different countries receive the same high-quality experience. 

Rolex watches are a perfect example of a successful international business strategy. The Swiss-made quality and reputation of a Rolex timepiece are major selling points. If you're looking for a Rolex watch, you can expect to pay the same price no matter where in the world you are.

Multi-domestic strategy

A multi-domestic strategy is a business approach that involves customising products or services to meet local markets' specific needs and preferences. This can involve significant investment in research and development, marketing, and manufacturing to ensure the product or service is well-suited to the local market. 

For example, a large wellness brand like Johnson & Johnson may sell different products under different names in other countries. If you've bought Band-Aids or Tylenol in the United States, you may not have realised that these products are made by Johnson & Johnson. 

Global strategy

If you adopt a global strategy, your company will likely establish itself as the market leader in your industry. This strategy emphasises the importance of gaining economies of scale by offering the same product or services in various countries. 

When companies create a single global brand and make minimal changes for local markets, the most outstanding example of a complete global takeover is Apple, which uses the same technology in all its markets. 

Transnational strategy  

A transnational strategy is a type of business strategy that combines elements of both global and multi-domestic approaches. It offers customised, low-cost products and services that meet local customers' unique needs and preferences.  

It involves tailoring products and services to local markets while achieving economies of scale and cost efficiencies through global standardisation and coordination. Companies like McDonald's, Nike, and Coca-Cola use this model because it allows them to operate efficiently on a global scale while still meeting the demands and preferences of local customers. 

 International Strategy   Multi-domestic strategy    Global strategy    Transnational strategy    Focuses on exporting products or services to foreign markets while maintaining the same products and processes in the home market.   Focuses on tailoring products and processes to meet the specific needs of local markets.   Focuses on offering standardised products and processes across all markets, with little adaptation to local market conditions.   Combines elements of global and multi-domestic strategies to create a hybrid approach that balances standardisation with local adaptation.

Don’t assume that your current business model will work internationally. At gigCMO, we often discuss, debate and challenge our clients when it comes to assessing their international expansion, which includes evaluating their business models, value propositions in the new market, pricing strategy and brand. 

We have developed this FREE Market Expansion Readiness Audit to help you self-assess how ready you are to expand internationally.

International Expansion Challenges & Solutions

When embarking on international expansion, there are several challenges that businesses need to consider. One example that illustrates the challenges of globalisation is the ancient Roman Empire. The establishment of the empire was not a smooth process, and it took many years to build.  

Similarly, the effects of globalisation may take time to materialise and may not always be positive. The Roman Empire faced challenges such as political instability, economic crises, and social unrest as it expanded its territory and integrated different cultures. 

Here are some of the challenges you need to take into consideration when entering new markets internationally:

When a business grows and expands into new regions worldwide, it also takes on additional compliance responsibilities. Compliance with local rules, tax obligations, and regulations can become more challenging as a company grows its global reach and workforce. 

Investing in technology infrastructure to help your teams comply with the latest legislation is a good idea, but a local specialist in this area can give you guidance and help you minimise any unnecessary risks and investments.

Language, Culture, & Politics

Challenges may arise when doing business across international borders due to cultural and operational differences. This could include language, cultural, and monetary adjustments. In addition to being a time-consuming and labour-intensive process, localisation is also complex. 

Use the knowledge and insight of natives by contracting with local experts. No one can help you more with localisation than someone who is fluent in the target language and culture. They can help you spot problem areas and steer clear of social mistakes.

Managing Distributed Teams

Managing employees who are located across the globe is another difficulty of doing business internationally. It can be challenging to work as a team when members speak different languages, have different cultural backgrounds, work in different time zones, or rely on various technologies. 

You need to organise the way your team communicates with one another. The success of a business in a foreign market depends on the team's ability to communicate, report, and track its progress. With the right leadership guidelines, protocols, and systems in place, you can conquer the difficulty of going global. As a global business ourselves, we ensure to have effective communications and work towards a mutual goal. At gigCMO, we’ve developed our structure, process and standards.

Local Competitors

Being the first to market has benefits, but you should still expect to face competition from other businesses in your area. It's possible that these companies are already well-known and respected in the communities where your ideal clients live and work. 

Before entering a foreign market, it’s important to conduct thorough research. Competition, niche offerings, and market share can all be determined with the data. The results of your research will tell you whether or not this market is worth pursuing and when to pursue it. At gigCMO, we have developed a Business Growth Playbook, where we can help you evaluate your international market growth model and competitor intelligent research.

High Investment Costs

Multinational corporations face difficulties associated with globalisation in capital investment and corporate leadership. Starting a business from scratch is a costly process anywhere, especially so in a developing nation. It's possible that critical support systems need to be put in place.  

Another challenge is finding and keeping executives who can contribute to the company's success and thrive in the local culture. By prioritising the development and retention of local talent, multinational corporations can build a strong and sustainable business presence in different markets while contributing to the local economy and community.

Communication Struggles

When expanding internationally, connecting with other countries can be challenging, mainly if there are language or cultural barriers. Companies must be aware of the potential communication risks arising when working across different time zones and language barriers.  

Microsoft Teams and other video conferencing applications can be valuable tools for multinational corporations to facilitate communication and collaboration across different time zones and locations. By using these technologies, businesses can improve the speed and efficiency of communication, reduce misunderstandings and errors, and foster a sense of connection and engagement among employees and stakeholders. 

How Can Small Businesses Expand Internationally?

Small and medium-sized enterprises (SMEs) play a crucial role in the global economy. You may be surprised to learn that small and medium-sized enterprises (SMEs) make up 95% of all businesses in the world.  

While operating within their domestic markets is the norm for most small businesses, access to foreign markets is required to survive and expand. American Express research indicates that almost three-quarters (73%) of SME respondents state that conducting international business creates resilience by providing protection against changing domestic market conditions. 

However, SMEs face unique challenges when expanding overseas, especially when compared to large enterprises. Here are some characteristics of SMEs that can impact their ability to expand internationally: 

  • Limited financial resources and smaller teams  
  • Less operational experience and knowledge of foreign markets 
  • Limited brand recognition and marketing reach in foreign markets 
  • Limited access to financing for international expansion 

Despite these challenges, small businesses can still successfully expand internationally by developing an effective strategy and leveraging the right resources. One resource that small businesses can turn to is a trusted partner that can provide guidance and support for their international expansion efforts.  

gigCMO is a company that provides marketing leadership specifically for small businesses looking to grow internationally. With gigCMO, small businesses can gain access to expert marketing guidance and support tailored to their unique needs and challenges.   

From conducting market research and developing market entry strategies to implementing digital marketing campaigns and building strategic partnerships, gigCMO can help small businesses overcome the challenges of expanding internationally.  

Is your company getting ready for an international expansion? gigCMO outlines the steps below to prepare your small business to expand into global markets. 

How to Create Your Global Expansion Strategy

A successful global expansion requires careful planning, and the following strategy can help you get started.

1. Set Company Goals to Guide Your International Expansion Strategies

Before embarking on a global business expansion, you must establish clear company objectives. It will provide you and your team with direction and purpose in the short, medium, and long term, allowing you to drive the business forward in a balanced way.  

Consider what you want to achieve with your international expansion before you set goals. Your intentions for going global may originate from things like: 

  • Expanding your business into profitable new markets 
  • Providing economic stability for your company by diversifying markets 
  • Saving money by relocating operations abroad 
  • Creating a globally recognised brand or improving your current reputation 
  • Increasing your talent pool to build a diverse team and source niche skills  

Your goals and plans for global expansion will look very different depending on which of these factors is most influential. You can use a variety of frameworks, such as Objectives & Key Results (OKRs) or Widely Important Goals (WIGs), to help you establish reasonable business objectives. The goals you set should be SMART regardless of the method you employ. 

  • S - specific 
  • M - measurable 
  • A - attainable 
  • R - realistic 
  • T- time-bound 

2. Perform Thorough Market Research

Once you have established your company's long-term goals and determined the critical position that international expansion will play in achieving those goals, you can conduct in-depth research into the target markets. If you do this before investing money in implementing your expansion plan, you can better anticipate opportunities and prepare for challenges. Sometimes, you may need to do some preliminary research in order to help you refine your goals.  

If done correctly, it will allow you to maximise profits, reduce risks, and give confidence to stakeholders and investors in your global expansion plans. During your research, you may want to look into the following topics further:  

Market segmentation:Who is your target customer? Consider narrowing down your Total Addressable Market to Serviceable Obtainable Market and developing a persona by selecting a real-life or fictional individual (or company) representing your ideal customer. What do they want, and who are they?  

Market demand:This will assist you in better understanding customer needs in each of your target markets. Is there a market demand for your product or service? What is the size of that demand? The more precise your estimate, the better. 

Trends:How do customers perceive your type of product or service? What are customers looking for, and how do they typically select the right brand or product? What is the market's level of change or stability? 

Market entry strategy:What factors will influence your market entry strategy, and how will you enter the market? Consider logistical details, business goals, lists of action items to complete, and the timeline you should expect to follow.

3. Evaluate and learn from your competition 

A close look at the work of competitors already present in a new market can help you differentiate your market positioning. The following are some factors to think about:  

  • Who are your big competitors in that specific market? 
  • Do you face competition from domestic or international firms? 
  • What do you see as the strong point of your competitors? 
  • Similarly, what are your competitors doing wrong, in your opinion? 
  • In what ways do you excel as an organisation?  

The best way to save time and money is to avoid making the same mistakes your competitors have already made. To better understand your market, you should look to your competitors.

4. Evaluate the different types of global expansion strategies available & choose wisely

There are many ways to expand internationally, but not every strategy suits every business. Determine the best approach to international expansion based on your market analysis, company objectives, and available resources. The most common methods of growth are: 

  • Exporting 
  • Licensing 
  • Franchising 
  • Mergers and acquisitions 
  • Greenfield Investments 

20230412 - International Market Expansion Evaluate the different types of global expansion strategies available & choose wisely Image - gigCMO

5. Develop a marketing strategy that resonates with local buyers

Prioritise developing a well-thought-out marketing strategy for local buyers once you decide which countries to expand into. It is crucial because the best strategy for promoting and selling your goods and services in one country may not work at all in another.  

For instance, what succeeds in the UK may not be effective in China, and vice versa. It’s important to understand your value propositions in your chosen market towards each of your target audiences. Then demonstrate your value proposition through a structured go-to-market plan, which could consist of some of the following as examples: 

  • Modify your messaging and positioning to better suit the tastes of local markets and consumers. 
  • Create an account-based marketing strategy targeting potential clients interested in collaborating with multinational corporations. 
  • Reach out to your niche market's local decision-makers and thought leaders. 

6. Launch Your Product or Service in New Market & Continue Monitoring

Time to reach out to your target audience and introduce your product to the new market! If you want to make an impact, it's important to test, deploy, and adjust your go-to-market strategies, including inbound marketing campaigns and outbound sales activities.  

Once the project has begun, it will require constant monitoring and strategy adjustments based on the results. You can learn more about the target market and what improvements need to be made to meet their specific needs if you routinely ask for feedback from local customers. 

Any plans for expanding into new markets should be based on the results of an analysis of your initial global expansion strategies. That way, you can take advantage of globalisation's many benefits without exposing your company to unnecessary risk as it expands. 

Go Global with an Experienced Partner at Your Side 

Businesses that want to grow internationally should plan carefully, analyse the market thoroughly, and implement a solid business development strategy. Businesses need to partner with experts in international expansion to be successful.

Why work with gigCMO in Expanding your Business Globally?  

We understand the complexities and challenges of taking business operations globally, as a fully remote and international team with clients worldwide. That is why we help businesses like yours save time and money by simplifying international expansion strategy.

gigCMO Playbook 

We have developed a Business Growth Playbook containing a set of instructions for entering a new market by following tried-and-tested procedures. When you delve into the depths of an internationalisation playbook, the seemingly simple word takes on a decent level of complication.  

Some companies, like Uber, have business models that require expanding to new cities one at a time, while many SaaS solutions take a more macro view of new markets and focus on expanding into entire countries. Both scenarios call for a comprehensive playbook outlining the most up-to-date information on how your business can enter new markets successfully.  

The gigCMO Playbook uses best practices and comparative data to help you in areas like evaluating and consolidating your business foundations, pricing model, and developing campaigns. The Playbook provides the landing team with a blueprint for the most effective way to enter a new market, which they will naturally modify to suit the specifics of the target market.  

  • Develop an international marketing strategy that is in line with business objectives. 
  • Put together a global team of stakeholders and executive leaders. 
  • Create long-term objectives as well as SMART goals. 
  • Prepare for localisation and identify priority markets. 
  • Select technologies wisely and plan for future tools and needs. 
  • Scale across borders and help in the globalisation of other areas of the business. 

Experienced and Knowledgeable Team of CMOs (Chief Marketing Officers) and Marketing Specialists  

Expanding into foreign markets can be an exciting opportunity for small businesses, but it also comes with challenges. The process requires careful planning, research and management to ensure success. However, this can be a daunting task for small businesses that may not have the resources or expertise to navigate the complexities of the international market.   

That's where fractional CMO services come in. gigCMO assists B2B and B2C companies all over the world in growing their business and revenue. We are experts in global marketing that can provide numerous benefits to start-ups, scale-ups and established SMEs. The two key competitive advantages that set us apart from other fractional CMOs in the industry:  

  • Firstly, our experienced international team has operated and developed businesses in international markets. This means that we deeply understand the target market and cultural nuances, allowing us to fine-tune your digital marketing strategy for optimal performance in emerging markets.  
  • Secondly, we offer a comprehensive Playbook that provides our clients with leadership, best practices, and knowledge transfer to improve their performance in the long term. Our Playbook includes market entry strategies such as brand positioning, channel strategy, identifying target customers, and product market analysis to ensure that your international marketing campaign is successful.   

If you're looking to expand into international markets and want expert guidance to help you achieve your goals, gigCMO is the perfect partner for you. Learn more about our services and how we can help you grow your business and revenue in international markets.