13 Jun The Path to Expanding Businesses Internationally
The four paths to expanding businesses internationally are importing, licensing, joint venture and investment. Importing is less risky and it allows for companies to get to know international organizations and learn how to work with them. It familiarizes the domestic company about international guidelines and trends. It allows local companies to learn about the international products and helps to establish a business relationship with them. Licensing is also less risky and is necessary to make sure trading meets guidelines, rules and standards. This is essential to any international trade because without licensing there is no way to monitor each company’s standards. Joint venture is also less risky because you are splitting the risk with another company.
Make sure to find a company that has a similar philosophy to yours and they should also have similar goals. Get all agreements for joint venture in writing and make sure there is constant communication with both companies. Finally, investment is more of a risky venture. When you are investing in the company, you are taking a chance with your money. Unless you have a secure foothold on the everyday operations of the company, your investment is in the hands of those in control, so they need to be qualified people who can be trusted. They have to be great communicators and have the knowledge and drive to reach the company’s goals and protect their investment. Before even deciding to expand abroad, a company should determine its global position in the market. That way they will be able to work towards maintaining and even improving their global position through expansion.