Strategies for International Business
- Strategies for International Busines
- International Strategy
- Multi-Domestic Strategy
- Global Strategy
- Transnational Strategy
- How to use Localization to Boost your Business Growth
- 1. Research the Culture of the Market you are Targeting
- 2. Get Local Translators to Work for you
- 3. Advertise on Multiple Platforms
- 4. Become a Part of the Local Community
- 5. Start Small, Expand Later
- 6. Keep Branding Consistent
- 7. Don’t Forget About Mobile Users
- Final Thoughts
Strategies for international business are all about operating on a global level.
An international business refers to any business that functions both in its domestic country as well as internationally. In addition to selling products between countries, an international business can also include customer service or a company that produces products overseas and sells them domestically.
Companies decide to go international to expand their reach in different markets. Market expansion allows companies to gain more revenue via reaching new customers, creating stable values of income via diversifying their markets, and gaining new talent from other countries. While there are many benefits from taking your business international, there are a few risks involved as well.
Every foreign country has its own government, language, business regulations, inflation rates, and customs that must be researched before one decides to expand. If proper analyses aren’t conducted, one runs the risk of expanding their business in a market that may not drive the company any growth.
There is no “correct” way to expand your business internationally. However, there are four common business models used by companies to place their businesses on a global scale:
- International Strategy
- Multidomestic Strategy
- Global Strategy
- Transnational Strategy
Strategies for International Busines
An international strategy is the strategy most companies start off with when trying to expand to international markets. Companies using an international strategy tend to keep their main operations domestic while shipping products and services globally.
Many companies use this strategy as a way to test the waters and see how successful they can be in an international setting. However, while many companies that use international strategy are businesses that are just starting out, there are numerous successful businesses that employ international strategy as their primary source of expanding globally. These companies include Moet and Chandon, Red Bull, and Porsche.
A multi-domestic strategy is another international business strategy where a company will focus on adapting their products to the needs of a local market rather than try to create one universal product.
Companies that want to implement a multi-domestic strategy will invest resources into researching the cultures of the areas they want to advertise so that they may tailor their products to local preferences. If certain cultures have similarities with one another, companies can use a singular multi-domestic strategy to target multiple groups with some slight modifications if need be.
For example, instead of creating one television channel that is advertised globally, MTV has created channels targeted at different countries’ music scenes, such as MTV Japan or MTV Australia. Other examples of companies that implement multi-domestic strategies include Procter and Gamble, Johnson and Johnson, Heinz, and Nestlé.
A global strategy is the opposite of a multi-domestic strategy. Instead of creating advertisements based on the cultures of different markets, companies will focus on offering the same products or services in each market with only necessary modifications in order to create a consistent brand experience.
Microsoft, for instance, offers the same products such as Word and Excel across the world, with the only modification being translating it to a market’s local language. Examples of other companies that implement global strategy include Amazon, Intel, and Apple.
A transnational strategy combines the ideas of multi-domestic strategy and multi-domestic strategy in one. Companies using a transnational strategy attempt to create a standardized product or service that can be advertised in any market while also creating products that are tailored to a local market’s tastes. McDonalds, for instance, offers its Big Mac product across all its franchises both domestically and internationally.
Outside of the United States, however, McDonalds also offers products that can appeal to local customers in foreign markets, such as India’s Veggie Maharaja Mac or Singapore’s Seaweed Shaker Fries. Other companies that use the transnational strategy include Nike, KFC, and McDonald’s.
How to use Localization to Boost your Business Growth
In the same way that International Business Models are important for expanding internationally, localization is key for boosting your business growth. Localization is the process of adapting content or products for a new region to help it perform well in the new market.
It is no secret localization is beneficial for business growth. By adapting products to reach a new market, you can develop a larger customer base, thereby creating more revenue and increasing the opportunities for even more business expansion. A proper localization strategy isn’t just replacing English words with translated text but understanding cultural nuances to make potential customers feel truly comfortable with your product.
1. Research the Culture of the Market you are Targeting
A successful localization campaign starts by understanding the cultural norms and values of your target market. The purpose of gaining this information is to make it easier to establish a connection with your target market.
Consumers are more likely to want to use the services or products of a company that they feel is more native to them.
As a result, make sure you are using your resources efficiently to research your target market.
2. Get Local Translators to Work for you
Getting local translators to work for you is far better than directly translating your content to a native language. Local translators are able to understand both the culture and language of their community. By recruiting local translators, you are also ensuring that your company can provide the most accurate and localized experience for any potential consumer.
Local translators are also able to give feedback on what may or may not be working in future marketing efforts. Therefore, it is important to make sure that you hire or make connections with local translators so that you are able to understand local market dynamics as much as possible.
3. Advertise on Multiple Platforms
Take advantage of the different platforms a local community has to offer. Many countries have their own newspapers, radio stations, and social media platforms you can use to promote your company, their product, and/or service.
4. Become a Part of the Local Community
Becoming a part of the local community not only gets your name out there in the marketplace, but also creates trust between your company and your target audience.
Getting involved in the local community can be done in a variety of different ways. Perhaps there are events or festivals native to a community your company can sponsor and employees can attend.
If tragedy strikes the local community, such as a natural disaster, and they are in a time of need, consider volunteer efforts or donations done in your company’s name. Such acts create trust between your company and the community.
5. Start Small, Expand Later
Global expansion comes with its risk, and by expanding too quickly, there is a possibility that you spread your resources too thin. As such, remember to start off by trying to build your company in local markets first.
As you establish yourself in more and more local markets, the risk of error when expanding decreases as you will generate more revenue and have more resources to expand as a result.
6. Keep Branding Consistent
Brand consistency is important.
Just because you are localizing to suit the needs of different communities does not mean your overall branding should entirely change. Things such as your logos, company colors, and fonts should remain the same as often as possible to make sure your company and brand are as recognizable as possible to multiple communities.
7. Don’t Forget About Mobile Users
With smartphones becoming more common every day, the usage of mobile platforms has increased as well. When localizing your products, remember to make sure your website works well on mobile devices and browsers.
In addition to making your website mobile-friendly, it is also important to consider developing mobile applications as well. Localized apps are important not only because they create more brand awareness and recognition, but they can also provide consumers with general info, pricing, and news about your company. Mobile applications can also be helpful for collecting customer data which can be used (with their consent) to assist with your marketing strategy.
Using strategies for international business in combination with localization can help your company achieve more revenue, more talent, and more customers.
However, it is important to make sure you have done the research and allocated resources properly to ensure that you do not fall victim to any of the risks that come with taking your company globally. Choose an international business model that aligns the most with your goals for your company and use localization to your advantage.