Developing a well-thought-out business expansion strategy will help you to:
A global expansion strategy is a formal business plan that outlines how a company intends to expand its business into foreign countries and markets, while mitigating risk and increasing revenue growth. To be successful, it should include a clear timeline and budget, in-depth research, realistic goals, and dedicated people.
Your international expansion strategy should provide clear structure and guidance to the people responsible for executing it so that it becomes a key part of your global expansion process.
Developing a robust global expansion strategy is a daunting task. It requires sufficient time, dedication and resources. But it’s not an impossible feat, and if done well, your global expansion plan will make expanding your business easier and more successful in the long run.
To help you get off to a smooth start, we’ve broken down the global expansion strategy process into six simple steps.
Before you can begin your global expansion, you first need to set clear company goals. This will provide you and your team with short-, medium- and long-term direction and goals to drive sustainable business growth.
Setting company-wide goals will help you understand where global expansion fits into your company vision and where it can help you achieve your goals. It can also help you prioritize certain aspects of global expansion, set aside an appropriate budget, and provide a clearer timeline for when you need to achieve each step in the expansion process.
When setting goals, consider what your primary objectives for global expansion should be. For example, your global expansion plans may be influenced by the following factors.
Expanding your talent pool to build a diverse team and acquire niche skills
Expanding your business into lucrative new markets
Demonstrating the economic stability of your business through diversified markets
Save money by moving your business abroad
Build a globally recognized brand or enhance your existing reputation
Each of these potential drivers of global expansion will lead to very different goals that you will need to set and plan for.
There are many ways to expand your business globally, but what works for one company may not work for yours. Use your market research, company goals and budget to determine the right international expansion strategy for your company. The main types of expansion strategies are
Each market expansion strategy has advantages and disadvantages. For example, licensing is fairly inexpensive and can allow your business to expand quickly, but it can lead to loss of control over quality, messaging and reputation.
On the other hand, Greenfield Venture allows your business to maintain full control of your operations, but it is an expensive and complex process from start to finish.
To achieve these goals, we have taken a comprehensive and multifaceted approach to global expansion. The following is a brief summary of the work we have done.
To help you set achievable company goals, you can use many frameworks, such as OKR (Objectives and Key Results) or WIG (Widely Important Goals). But no matter which framework you use, your goals should be SMART.
Specific
Measurable
Attainable
Realistic
Time-bound
Once you have set your company goals and understand where global expansion fits them, you need to conduct thorough research on the markets you wish to enter. This will help you identify opportunities and obstacles before you start spending money on your expansion strategy.
When done well, market research can help you maximize profitability, reduce risk, and reassure stakeholders and investors that your global expansion plans are proven.
Here are some questions you should answer before entering a new market.
There are many tools you can use to help you research your target market more easily, such as country/region-specific databases like the OECD. Upon completion, you should have a better understanding of which markets to prioritize in your global expansion strategy.
While the ultimate goal may be to expand into dozens of countries on all continents, it is best to start with a few select high-priority, low-risk markets. For example, you might start by expanding into Europe or other strategic regions.
This approach to expansion will allow you to test your international expansion strategy and make any necessary adjustments before committing more capital and resources.
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