BBVA API Market
Globalization and the power of the Internet are transforming the world into a single market with growth opportunities also for small companies. Nowadays many startups don’t wait five or ten years to have a mature business and expand abroad, thinking that if they wait too long they may lose many potential international customers interested in what they offer. The truth is that internationalization can help a company generate more market and attract new customers, but without a clear strategy it can also become an important failure.
1. Take the safe path
When you start an internationalization process, it is usually better to take a safe path to minimize the risks that your business may suffer. For this reason, a good option is to go first to markets with similar characteristics to yours; for example, it will be easier to integrate into those who speak your same language or have a similar culture. Surely it will be easier for you to start your operations in Anglo-Saxon or Latin American countries, rather than entering the Chinese market, which even though it has great potential it has more barriers for foreign companies.
2. Identify your business opportunities
Another important way to reduce risks when it comes to expand your business abroad is to establish a strategy to analyze issues such as those presented in “A playbook for International Expansions Teams”. Each market has its own nuances, its culture, customs and political and economic issues, so it’s necessary to reflect on which markets are the most appropriate for your business; when is the best moment for expansion; if your product or service really has business and leadership opportunities over competitors already established in those markets; if your local competitors are also looking to expand and how it might affect your business; how are you going to integrate your team in this phase of internationalization; how are you going to manage multiple resources in different locations, and if there may be any problems (regulatory or cultural) with the services and products you will be offering.
3. Analyze the needs of your customers
Sales and production are the most common reasons why companies expand their business abroad, without taking into account a factor that is also vital: customer service. To keep a good customer service in your internationalization process you have to consider basic aspects such as if the potential customers in the new markets will require an on-site service, if it’s possible to win more customers by offering this service or, on the contrary, if you don’t have offices in the country where you are going to expand the travel expenses will equal or exceed the costs of having staff dedicated to international customer service, and if you could lose customers if the service response is slow or sporadic.
4. Find strategic partners
Another recommendation in which many experts agree is the need to seek alliances with strategic partners in order to strengthen and accelerate the expansion into other markets. Finding partners can help you to the extent that these companies know the domestic market and have networks that can facilitate the connection of your business with the new market. Having a partner or even making a small purchase can open doors to great opportunities, making it easier to achieve new resources or use patented technologies, among other advantages.
For this reason it is also very important to create a group of contacts on the Internet. Through social networks like LinkedIn you can establish links with professionals from other sectors and geographies and gain valuable information.
5. Take smart risks
As mentioned before, a successful international strategy begins with extensive research, a strong network of contacts and a lot of courage. This last concept is very important, as business people are professionals used to take risks… but there are ways to take smart risks. Therefore, you always have to assess the risks considering the worst possible outcome in order to make the best decision.
Finally, we want to end with a good example of business growth and internationalization. The social network Pinterest, with only four years of life and more than 70 million registered users, is in the middle of its expansion to Europe and Latin America. According to Matt Crystal, head of the international division of Pinterest, the company has nearly 30% of its users outside the US, and the website is already available in 32 languages.
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