Which Factors to Consider when Formulating a Global Strategy?

Expanding Internationally: Forming a Global Strategy

It does not matter what kind of business you have. Almost every company, unless it is extraordinarily exclusive, has a potential to develop overseas. Going international allows for broader brand awareness as well as huge revenues and beneficial partnerships.

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Environmental Factors

Those are by far the most important and influential aspects of a global strategy. If your target country imposes extremely high import tariffs or draconian fees, you may want to think twice before moving your goods and services there.

Even if the government does not introduce any restrictions, it may not be safe to establish a business there. For instance, heightened political tensions may later result in a full-blown revolution or even war. It will make it hard for you to control any operations in that country.

Moreover, there may be other subtle restrictions like whether the country is prone to draughts, hurricanes and other environmental disasters. In this case, you may want to deliberate whether your business proposition is relevant for people facing other more urgent dangers.

Economic Factors

We've already covered the governmental economic course, but there are definitely other factors to consider. The most obvious one is the GDP per capita, as, perhaps, this is not a good idea to try selling luxury goods in a country with a starving population.

However, at the same time if you know that the top one percent can afford them, then with the right marketing you may be able to make a good profit. Whether it is morally justifiable is a question for a different article. As they say though – nothing personal.

Even if a country is not a good place for selling – perhaps, there are other benefits to derive. For instance, many US companies employ cheaper Mexican labor which allows them to keep the costs low for American consumers. Sounds unfair, but this is the price to pay for inexpensive products.

Cultural Factors

Who has not heard about funny yet disastrous translation mistakes which precluded some pretty successful companies from expanding internationally? For example, those of you who speak Spanish would, probably, stay away from the car named Nova (it does not go).

However, this is exactly the name General Motors failed to localize for the Latin American market. A similar issue befell the baby food company Gerber which sold its product with a cute baby face on the jar. Unfortunately, the African population did not get the metaphor.

They thought it was the baby remains they sold. This, of course, appalled the people, and when the company figured out the issue, it was too late to fix it. Many countries still perpetuate discrimination and religious indoctrination. Thus, you need to be careful when selling your goods there.

Conclusion

Going international with your business is definitely not a piece of cake. It is an expensive enterprise, and the risks are high. It is always safer to continue marketing to local consumers, rather than trying to appeal to the audience you barely know anything about.

However, any successful business at one point is bound to do it. First of all, it is obvious that profits made in 100 countries would inevitably outweigh those in just one as well as cover a couple failures. Secondly, consumers tend to trust bigger corporations rather than a small local brand.

Finally, there is a multitude of benefits to have from cooperation with international partners. You as a company can get cheaper materials and labor, thus, driving the product cost down. So, do not hesitate and start working on a global strategy. It will pay off in millions in the future.