Opening up new markets at international borders

19/10/2024
Externa World

Learn about the expansion and growth strategies that enable the opening and development of new businesses internationally.

Discover the stages of International Trade and how to maximize your profits

For a company to successfully expand into foreign markets, it must follow a series of structured steps that guide its foray, market research and adaptation to new environments. Each stage of the process enables the company to minimize risks and optimize opportunities, ensuring that its business expansion is more secure and sustainable.

How to trade in international trade

Business expansion is a fundamental concept in the world of business, involving the process of expanding a company’s presence into new markets, both nationally and internationally.

This phenomenon is essential for the growth and survival of any organization, as it allows to take advantage of opportunities for growth, diversify risks and increase profitability. I assume a strategic market approach that seeks the growth and diversification of a company through the exploration of new markets and opportunities.

We detail the fundamental strategies to follow to achieve international commercial expansion:

  • Market research. It is essential to understand the foreign market, its opportunities and threats in depth, before making any significant investment in it. The priority is to study the demand for products or services, analyse local competition and understand the legal and regulatory framework of the country.
  • Strategic Planning. Based on research, the company must develop a clear market entry strategy. This may involve the choice between different models of expansion, such as direct export, opening subsidiaries, forming strategic alliances or acquiring a local company. Each focus has its own risks and benefits.
  • Development of marketing strategies. Marketing tactics and practices need to be adapted to the preferences and needs of the new foreign market.
  • Adaptation of the Product or Service. Companies must adapt their offers and products to meet local preferences, which can vary significantly in terms of quality, price, packaging and after-sales service.
  • Strategic alliances. Forming alliances with local or foreign partners can facilitate business expansion, as they provide access to established distribution networks, market knowledge and shared resources that facilitate entry and growth into the new market.
  • Commercial prospecting. Generate contacts to create relationships of trust and proximity with suppliers and customers.
  • Monitoring and evaluation. Execution and tracking allow for quick adjustments and opportunities as they arise, for optimization and business performance.

What benefits does trade expansion across international borders promote?

> Market diversification and risk reduction. It favours the diversification of sources of income. By expanding into foreign markets, firms can balance revenues and protect themselves against fluctuations in local demand.

> Increased growth opportunities when local markets cannot provide sufficient demand or because demand is stagnant. In emerging economies, for example, there may be a significant demand for products or services that are no longer growing in developed countries.

> Access to new technologies and global talent. Being present in several countries allows companies to access cutting-edge technology and foster innovation, continuous improvement and commercial positioning.

> Economies of scale. The expansion of operations internationally allows companies to increase their production volumes, which translates into reduced unit costs and the exploitation of economies of scale.

> New sources of revenue and growth in business results. This ensures greater stability in the company and helps it to remain competitive.

> More diversification, less dependence. This reduces the risk of relying solely on the functioning of a particular local economy.

> Access to global talent. The ability to form more diverse work teams and access specialized profiles that may not be available in the local market is an effective tool that companies use.

Advantages of commercial implementation

It is clear that business expansion facilitates sustainable and profitable growth for any corporate entity, and also brings benefits and advantages to make the business more competitive.

  • Increase and diversification of income. Business expansion can generate significant revenue growth by opening up new markets and customers.
  • Brand strengthening. Presence in multiple markets can strengthen the brand and improve the overall perception of the company.
  • Access to global talent and resources. International expansion can give you access to talent, technology and resources that may be difficult to find in the home market.
  • Increased competitiveness.  Business expansion can increase competitiveness by forcing the firm to constantly improve and adapt.

Challenges of landing in the foreign market

  • Cultural Differences. One of the main obstacles is to understand and adapt to cultural differences. What works in one market will not necessarily succeed in another. Factors such as consumer preferences, business practices and social norms can vary dramatically, which may require important adjustments to marketing strategy, product design and customer service.
  • Regulatory and Legal Barriers. Each country has its own set of trade regulations, tariffs, labour laws and environmental regulations. Compliance with these laws can be complicated and costly, and any non-compliance may result in fines, penalties or even the inability to operate in that country.
  • Currency Risk and Economic Volatility. Fluctuations in exchange rates can significantly affect the profit margins of companies trading internationally. In addition, economic conditions in foreign countries may be volatile, increasing the risk of financial losses due to currency devaluations or economic crises.
  • Logistics and Supply Chain. Managing logistics in international markets can be much more complex than in local markets. Delays in shipments, customs barriers and additional costs for transport or storage can impact profitability. In addition, companies must ensure a robust supply chain to avoid disruptions.

Substantial positioning

As mentioned, international business expansion represents a crucial opportunity for those companies that seek to grow, develop their markets beyond local borders, diversify their products and services and remain competitive over time; the challenges of expansion, such as taking on different cultures and regulatory risks; although the long-term rewards are substantial.

From Externa World, we invest our resources and efforts, working with enthusiasm and dedication, to offer companies in various market sectors, Strategies for expansion and business growth that will help them to develop their desire to open and develop new businesses.