WHY GO INTERNATIONAL

Reel in the benefits As companies, both large and small, search for new international markets in today’s global economy, they appreciate the differences between trading in their home market, with its known parameters, and marketing products overseas.

Competing overseas usually involves greater risk and requires a detailed understanding of uncertainties – such as currency prices, payments, regulations, cultural matters, market structures and protocols. Competing overseas requires business partnerships to provide local expertise and support.

Achieve more by going international Yet, a successful presence in overseas markets will help businesses achieve:

•   Increased growth beyond what is possible domestically – leading to economies of scale, such as larger production runs that reduce costs

•   A competitive edge – exposure to intensive competition, new products and ideas, more efficient technologies and better working practices increase the company’s ability to compete

•   Greater sales volume – translating into higher earnings, especially where margins in some markets exceed those in the domestic market, thereby increasing resilience of revenues and profits

•   The ability to spread risks – while product sales in the home market
may be in decline, those in overseas markets may be booming

•   Higher profile and brand
awareness – leading to increased reputation with existing customers and improved staff morale

•   Spreading the exchange rate risk –
for example, if a business does most of its trade in US dollars, it may want to start trading with Japan to spread the exchange rate risk between the dollar and the yen

•   Increased commercial lifespan of products and services – and therefore increased returns
on investment in research & development.

Key performance factors

The size of your business is not a key factor; nor, often, is the product sector.

What is important is:

•   The product meets local need

•   Overseas teams are trained

•   Long-term partner relationships  are established

•   New markets are established to compensate for less buoyant ones

•   Focus is on marketing and customer service

•   Products are robust enough to compete within overseas markets.

Economic research by business advisory services, such as chambers of trade, consistently shows that companies
which export to any country, in any financial climate, perform better than those which do not.

 UHY-International-Business June 2013