International business expansion – the basics: A primer for businesses


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  1. Introduction
  2. Benefits of international business expansion
  3. How to expand into international markets
    1. Market dynamics
    2. Local partners
    3. Cultural differences
    4. Recruiting a team
    5. Local languages
    6. Time zones
    7. Product value
    8. Payment culture
    9. Legal and regulatory compliance

Expanding your business into international markets presents exciting growth opportunities, but does also introduce a new level of complexity. In a 2023 Outleap survey of chief commercial officers (CCOs), chief marketing officers (CMOs) and chief executive officers (CEOs), 44% of them said that their businesses are looking to expand in 2024.

Below, we'll outline the benefits of international expansion and what you need to know about expanding into foreign markets – including legal and regulatory compliance, and how to approach cultural differences.

What's in this article?

  • Benefits of international business expansion
  • How to expand into international markets

Benefits of international business expansion

Expanding your business internationally is a major undertaking – but one that can yield significant rewards. Here are some of the key benefits that can come from international expansion:

  • Diversified revenue streams: For businesses, operating in multiple markets can mitigate the risks of economic downturns or market saturation in their home country. This diversification provides a more stable cash flow and reduces the business's vulnerability to local economic cycles. For instance, a recession in one market may be offset by robust performance in another.

  • New customer bases: International expansion opens up access to new demographics and customer segments, which offers an opportunity to increase your market size. Taking advantage of these new customer bases requires in-depth market research into local customer behaviour, preferences and purchasing power. Possible strategies include localised marketing campaigns, adapting products and services to meet local tastes and using digital platforms to reach remote customers.

  • Economies of scale: By operating in multiple markets, businesses can achieve economies of scale in procurement, distribution and marketing. Strategies may involve optimising supply chains to source cheaper materials or negotiating better rates with suppliers because of higher volumes.

  • Enhanced competitive advantage: Businesses with international operations can gain a competitive advantage by selling unique products or services that are not available in local markets, relying on superior technology and using more sophisticated business models. Having a reputation as a global player can also benefit a business by enhancing brand prestige. Implementing advanced analytics and customer relationship management (CRM) systems can create tailored offerings and outmanoeuvre local competitors.

  • Access to talent and innovation: Expanding globally lets businesses tap into new talent pools and opportunities for innovation. This can be particularly advantageous in industries in which certain regions are known for having a specific area of expertise, such as technology, manufacturing or creative industries (e.g. being able to recruit tech experts in the United States or Japan). Establishing partnerships with local universities, participating in local innovation hubs and recruiting local talent can accelerate product innovation and adapt business models to local markets.

  • Operational efficiency: International businesses can fine-tune their operations by using the comparative advantages of different regions. For example, manufacturing may be more cost-effective in one country because of lower labour costs, while another country may have an advanced technological infrastructure for research and development (R&D). Businesses must conduct thorough cost-benefit analyses and consider logistical challenges, such as transportation and tariffs, to maximise operational efficiencies.

  • Regulatory and tax advantages: Operating in multiple jurisdictions can create advantages in terms of taxation and regulatory compliance. Businesses can structure their operations to benefit from lower tax rates, tax treaties and government incentives to attract foreign businesses. Working through the complexities of international tax law and maintaining compliance with regulations in all applicable jurisdictions requires careful planning.

  • Risk management and resilience building: International diversification can also help with risk management. By spreading operations across different geopolitical and economic environments, businesses can shield themselves from region-specific shocks, such as political instability, trade disputes and natural disasters. Building a resilient supply chain means creating redundancy, diversifying suppliers and developing contingency plans to protect business continuity.

How to expand into international markets

Here are some of the areas that you'll want to consider when creating your strategy for international expansion.

Market dynamics

To educate yourself about the dynamics in different markets, look at a variety of factors, including economic indicators, customer behaviour and market trends, as well as the competitive landscape and regulatory environment. These elements can differ significantly from one country to another, influencing how a product or service should be positioned and sold. Here are the areas that you'll want to investigate and research when breaking into new markets:

  • Economic indicators: Start by assessing the target country's macroeconomic environment. Examine gross domestic product (GDP) growth rates, inflation rates, employment levels and purchasing power parity for a sense of the market's overall economic health and potential customer spending power.

  • Customer behaviour: Research local customer behaviour patterns, including cultural nuances, purchasing habits, price sensitivity, brand loyalty and preferred channels of communication. You can gather customer behaviour insights through surveys and focus groups, and by analysing customer data via social media and other online platforms.

  • Market trends: Identify and analyse current market trends, including emerging technologies, shifts in customer preferences and societal changes. Understanding these trends is important for anticipating market needs and staying ahead of competitors.

  • Competitive landscape: Conduct a thorough analysis of the competitive environment. Identify direct and indirect competitors, as well as their market share, strengths and weaknesses, pricing strategies and product offerings. This will help you to position your product or service effectively, while identifying any gaps in the market that you can exploit.

  • Regulatory environment: Familiarise yourself with the legal and regulatory framework of the target country, including trade policies, tariffs, import restrictions and any industry-specific regulations. Compliance with local laws is a must to avoid fines and lawsuits, and to ensure that you can continue to do business in the country.

  • Barriers to entry: Assess the barriers to entry in the target market, such as high competition, stringent regulations or high capital requirements. Understanding these barriers will help you formulate strategies to overcome them, whether that's through innovation, key partnerships or by relying on unique selling propositions.

  • Market size and segmentation: Gauge the size of the market and split it into segments based on demographics, psychographics, geography and behaviour. Segmentation allows for more targeted and effective marketing strategies, product development and distribution plans.

  • Distribution channels: Investigate the most effective distribution channels for the market, such as online platforms, retail partnerships, direct sales and third-party distributors. Each market may have a unique distribution scene, influenced by customer preferences and local infrastructure.

  • Pricing strategy: Develop a pricing strategy which reflects the target market's economic conditions, competitive landscape and customer expectations.

  • Feedback loops: Finally, set up mechanisms to gather and analyse feedback from the market on an ongoing basis. This could involve customer satisfaction surveys, social media monitoring and sales data analysis. Feedback loops help with making adjustments to strategies based on real-world performance and insights.

Local partners

Identifying and securing the right local partner is a key step for international expansion. A local partner can provide invaluable insights into the market, facilitate smoother entry processes and provide established networks that may take years to build independently. Here are some considerations to think about when seeking a potential local partner:

  • Alignment of vision and values: Make sure that potential partners share your business's vision, values and objectives. This alignment helps to prevent conflicts and is key for long-term collaboration. Conduct thorough due diligence on their business practices, reputation and corporate culture.

  • Market knowledge and network: A suitable partner should have a deep knowledge of the local market and a robust network of contacts, including potential customers, suppliers and regulatory bodies. This network can accelerate market entry and expansion efforts, reducing the time and cost associated with establishing new relationships.

  • Complementary strengths and capabilities: Look for partners who offer complementary strengths and capabilities. This may include specific industry expertise, distribution networks, marketing capabilities or technological know-how.

  • Financial stability and resources: Assess the financial stability and resources of potential partners. A partner with sufficient resources can contribute to funding the expansion efforts and sustain the operation through the initial growth phases.

  • Legal and regulatory compliance: Confirm that your local partner has a clean track record of legal and regulatory compliance. Non-compliance issues can disrupt business operations and damage your brand's reputation. Employ legal experts to conduct a comprehensive review of the partner's compliance history.

Once you have identified a potential partner, you can start crafting an agreement and negotiating terms. This process should cover all aspects of the partnership, including roles and responsibilities, financial contributions, profit sharing, intellectual property rights, dispute resolution mechanisms and exit strategies. Before finalising a partnership, you may also consider engaging in pilot projects to test the working relationship and evaluate the partner's effectiveness in real-world conditions. These projects can provide valuable insights into the partner's operations, commitment levels and ability to deliver results.

Cultural differences

In every new market, consider the cultural differences that could affect areas such as product value, marketing strategies and recruitment decisions. These include:

  • Cultural research: Educate yourself about the target culture's norms, values, communication styles and business etiquette. This research can help you to build stronger relationships with local stakeholders and prevent misunderstandings.

  • Local expertise: Engage with local experts or consultants who can provide insights into cultural nuances and how they affect business operations. Their expertise can help you to adapt your business model to suit local preferences.

  • Customisation of products and marketing: Adapt your products, services and marketing messages to resonate with the local audience. This may involve changing product features, packaging or promotional strategies to align with cultural preferences and sensitivities.

  • Adaptation of communication style: Be mindful of differences in communication styles, which can vary widely across different cultures. Understanding whether a culture values direct or indirect communication can influence how you negotiate, sell and build relationships.

  • Training and sensitisation: Provide cultural awareness and sensitivity training for your team to ensure that they can interact effectively and respectfully with local partners, customers and colleagues.

Recruiting a team

When you expand into a new market, you'll need to recruit an international team to oversee the region's operations. The following best practices will help you to recruit the right talent:

  • Local talent acquisition: Recruiting local talent offers several benefits. Local employees understand the market's cultural and business nuances. They're familiar with local customer behaviour, legal regulations and business etiquette, which can accelerate your market penetration efforts.

  • Diversity and inclusion: Emphasise diversity in your recruitment strategy. A diverse team brings a range of perspectives, ideas and solutions to the table, which helps with complex problem-solving and innovation. Take care that your recruitment practices are inclusive and non-discriminatory to attract the best candidates from all backgrounds.

  • Tailored recruitment: Identify the specific skill sets and experience levels that your international operations team needs, then tailor your recruitment efforts to find candidates who match those criteria. Your priorities may include language skills, international business experience or specific industry expertise. Looking beyond professional qualifications, you'll want to consider candidates' cultural fit and how adaptable they are. Employees who are flexible, creative, resilient and adaptable – and can deal with cultural differences – will be more successful in international roles.

  • Listing remote and hybrid positions: Listing remote and flexible work arrangements lets you tap into a broader talent pool and accommodate different time zones, improving collaboration and productivity.

  • Legal compliance: Maintain compliance with local employment laws and regulations, which can vary widely by country. This includes contracts, working hours, benefits, taxes and termination policies. Consulting with local legal experts can help you work through these complexities and avoid potential legal issues.

Once the recruitment stage has been completed, invest in training and development programmes to equip your team with the necessary skills for international expansion. This can include language lessons, cultural sensitivity training and seminars on international business practices. Ongoing learning opportunities can help you to retain top talent by showing your commitment to their personal and professional growth.

Local languages

Understanding the languages used in your target market is important for effective communication and localisation strategies. Here are key areas to research:

  • Official and business languages: Identify the official language(s) of the country and any regional variations, including which languages are used in business contexts, such as legal documents, negotiations and corporate communications.

  • Customer language preferences: Investigate the language preferences of your target customer demographic. Preferences can vary greatly within a country, especially in regions with multiple dialects or languages, and tailoring your communications to these preferences can enhance customer engagement and brand loyalty.

  • Language proficiency levels: Assess the general level of language proficiency in the country, especially with English or other languages in which your business operates. This will help you to tailor your communication, product information, marketing materials and customer support to meet local needs.

Once you've assessed the languages in your new market, you can decide what kind of language localisation efforts you need to undertake. This may include translating and localising websites, mobile apps, marketing materials and user interfaces to resonate with local users, if the primary language used in business or preferred by customers differs from the language in which you typically do business.

Language service providers and multilingual staff can be assets when translating your business communications into a new language. Language service providers can assist with translation, interpretation and localisation services, and are a great tool for maintaining accuracy and cultural appropriateness in translation, which is key for legal documents and customer-facing content. Staff with multilingual capabilities can make a major difference in terms of customer service and local market analysis, by bridging language gaps, facilitating smoother operations and providing insights into cultural nuances.

Time zones

International businesses must maintain availability across different time zones to provide timely support to customers, partners and employees around the globe. The following business practices can help you to build a team that is capable of operating in multiple time zones:

  • Building out customer support coverage: Implement customer support systems that can cater to global customers in their time zones. This may involve setting up 24/7 support lines, using chatbots for out-of-hours queries and recruiting support staff in different time zones.

  • Allowing flexible work hours: Adopt flexible work hours for your team to accommodate international meetings and work requirements.

  • Adopting scheduling and remote collaboration tools: Use scheduling tools that can adjust automatically to any differences in time zone, such as World Time Buddy or Google Calendar's world clock, to schedule meetings without the confusion of converting time zones. To support asynchronous work, use remote collaboration tools, such as Slack, Trello or Asana, which allow team members to contribute according to their schedules while keeping projects moving forwards.

  • Implementing rotational shifts: For operations that require constant attention, such as IT support or customer service, consider implementing rotational shifts to cover all time zones. This ensures that someone is always available to respond to key issues or enquiries.

  • Setting clear communication protocols: Establish clear communication protocols which specify when and how to communicate across time zones, including preferred hours for scheduling meetings and expected response times for emails.

  • Honouring cultural differences: When planning meetings and deadlines, be mindful of cultural differences in work-life balance and bank holidays across regions.

Product value

Although translating your product and marketing materials may seem like a logical first step towards international expansion, it's important that you start by assessing the true value proposition for your product in each international market. What resonates in your home market may not translate directly into another, and cultural nuances, economic realities and competitor landscapes can have a substantial effect on your product's perceived value.

Determining the true value of your product in new contexts will enable you to create a compelling proposition that resonates with local audiences, ultimately driving the success of your international expansion. As you adjust your value proposition to new markets, you'll be responding to local customer preferences, market conditions and local cultural norms and values – adjusting your communications to resonate effectively in the target market. During expansion efforts, be prepared to refine your value proposition based on new market insights.

The first step in assessing your product's value in a new market is to conduct the following market research:

  • Determine needs and wants: Analyse local customer preferences, challenges and buying habits, assessing what problems your product solves in this specific context.

  • Evaluate the competitor landscape: Analyse competitor offerings, pricing and value propositions, assessing how your product differentiates itself.

  • Assess local economic factors: Consider purchasing power, income levels and affordability for your target audience.

Once you've assessed how your product fits into this new market, you'll want to adapt your value proposition to reflect its new position.

  • Address market needs and preferences: Emphasise features that address the specific needs and preferences identified in your research. Consider implementing different pricing options or subscription models to cater to a variety of budgets and preferences.

  • Tailor messaging to cultural norms: Make sure that your messaging resonates with the local cultural context and avoids misunderstandings.

  • Reflect any product adjustments: In some cases, it may be necessary to make minor product adaptations to align with local needs or regulations. Make sure that these are reflected in your new value proposition.

  • Communicate comparative value: Demonstrate how your product outshines those of your competitors. Instead of competing solely on price, showcase the unique value that your product provides compared with the alternatives.

  • Highlight intangible benefits: Looking beyond functional benefits, emphasise the emotional or social value that resonates with the target audience.

Payment culture

The key to succeeding in international markets lies in embracing their unique payment cultures. From the dominance of mobile payments in Asia to the prevailing role of bank transfers in Europe, determining each market's payment preferences can help your business to demonstrate respect for and an understanding of your new customers' habits, while creating a convenient payment experience. Businesses should pay attention to the following considerations when adopting a payment strategy in new markets:

  • Payment processing: The payment processing experience can have a dramatic influence over your market position. Work with local financial infrastructure to create a checkout experience that is as smooth and low cost as possible to keep customers coming back.

  • User experience: Providing a local currency option or integrating regional payment gateways demonstrates your brand's commitment to its new audience.

  • Regulatory compliance: Every market has its own financial regulations. Cutting through this regulatory jungle demands a proactive approach to data protection and fraud prevention, which reassures customers that their transactions are secure.

  • Payment security: A robust cybersecurity framework protects against fraud and cyberthreats, which is a technical necessity and an important part of preserving customer trust.

  • Local partnerships: Forming alliances with local banks and financial entities gives your business logistical leverage and an insider's perspective on the payment environment. These partnerships can provide insights into local customer behaviour, regulatory hurdles and potential market opportunities.

Businesses that operate internationally must comply with all local laws and regulations. This may require designing a unique strategy to comply with each market's local tax regulations, data protection laws, employment standards, environmental obligations and more. Adapting your business model to these requirements means taking an in-depth look at local laws, as well as a strategic approach to maintaining compliance, without compromising operational efficiency or brand reputation. The following business practices are key when developing strategies for compliance in new markets:

  • Engage with local legal and tax experts: The complexity of global compliance and taxation often goes beyond the scope of in-house expertise, particularly in markets with opaque regulatory environments. The global tax environment, for example, is a patchwork of regulations, which include value-added tax (VAT), goods and services tax (GST), corporate income taxes and customs duties. Working with local experts clarifies your obligations and provides insights into best business practices within each jurisdiction. This collaboration can extend from initial market entry strategies to ongoing compliance and audit readiness.

  • Use tax structures to your advantage: Analyse tax obligations and opportunities across relevant regions to determine tax credits and incentives, as well as strategies that mitigate double taxation. Tax planning can influence pricing strategies, supply chain design and more, and it should include assessing the tax implications of different corporate structures, intellectual property management and cross-border transactions. Effective tax planning supports sustainable growth by optimising tax liabilities and enhancing operational effectiveness.

  • Rely on technology for compliance and tax management: Advanced technologies and platforms can automate the tracking of regulatory changes, calculate tax obligations in real time and facilitate accurate reporting across jurisdictions. Investing in these technologies minimises the risk of non-compliance and the associated penalties, while freeing up valuable resources to put towards core business growth.

  • Monitor regulatory changes: Businesses must stay up to date with changes in tax and compliance. Create a structured process for monitoring legislative developments and industry trends, which allows you to interpret their impact on your business and implement any necessary adjustments swiftly.

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