IS GLOBALISATION STILL A THING?
When we think of globalisation, we may think it is a relatively new phenomenon. However, international expansion has been around since the 20th century BC. The Assyrian Empire had trading colonies across the Middle East to move goods from places of great supply to places that were lacking.
The American journalist and author Thomas Friedman has identified three phases in the development of globalisation.
- Archaic – Globalisation of countries from 1492 to 1800
- Proto - Globalisation of companies from 1800 to 2000
- Modern - Globalisation of individuals from 2000 to present
Modern Globalisation – Business Expansion Made Easier
The proliferation of the Internet and mobile devices is having a profound impact on Modern Globalisation. The barriers to entry that previously existed due to borders, language, flow of information, cultural and geo-political differences have greatly reduced and been removed in some cases.
here are 7 signs your company is ready to expand business overseas
1. Growth In Your Domestic Market Has Plateaued
After your initial launch your sales team were humming, the order book was filling and all the KPIs were going up. But now the law of diminishing marginal returns has kicked in.
KPIs are still going up but just not as fast as they were. There could be a variety of reasons why your market penetration has begun to plateau.
More importantly, it doesn’t mean you have reached saturation point. The company might not be #1 in your domestic market, but your company doesn’t have to ‘qualify’ in the top spot to expand into international markets.
You can take the learnings from your initial launch successes and apply them to an overseas market giving you the opportunity for growth on two fronts.
2. You Have A Stable & Established Team Working With You
Just like sports teams, companies and their employees thrive on success. Winning new clients and contracts is like filling up the trophy cabinet. The ‘wins’ feel even bigger when it’s on an international stage.
If you believe the company’s success lies in the ability of the people running the business, then it might be time to take on an international market.
A little market research will go a long way. But ultimately, domestic success can be transferable across borders and scalable for your business.
3. “We’re Going To Need A Bigger Boat”
There’s a famous scene in the movie Jaws with Roy Scheider’s character, police chief Martin Brody. When he first sets his eyes on the shark he backs into the wheelhouse and realising the enormity of the task at hand, tells the skipper “We’re going to need a bigger boat”.
The same could apply for your company after a period of sustained growth: ‘You’re gonna need a bigger premises’. If your company has achieved steady growth for a number of years, then domestic expansion was probably on the horizon.
Considering you have been planning for this large capital outlay, why not try and maximise the return on investment. You may be able to get more bang for your buck setting up a similar sized operation in another country.
Which leads us nicely on to...
4. Favourable Cost Benefit Analysis
The financial commitment to setting up an international operation can be huge, especially for a manufacturing type business.
However, there could be some cost savings available in the overseas location.
For example Ireland has particularly attractive rates of taxation, with a corporate tax rate of 12.5%.
The PriceWaterhouseCoopers ‘Paying Taxes 2017: The Global Picture’ report has also ranked Ireland 1st in Europe for ease of paying business taxes.
Also, the cost of labor in some industries would be lower than that of the U.S. Since 2012 Irish wage inflation has stayed reasonably stable, rising by 4% versus an increase of 6.6% on average across the Eurozone.
5. Growth Was Always Part Of The Plan…
… therefore, so was expansion and probably international expansion.
No business plan has ever held mediocrity as one of the goals. If market research has confirmed the viability of your business in overseas markets and you have achieved growth in the domestic market, it’s time to make the move.
There is a lot involved in expanding overseas, which is where a partnership with Smart MBS can be your advantage. We can have the company structure set up and ready to go before you begin the move proper.
6. There Are Customers Overseas Too
The internet has been one of the main driving forces behind the most recent advancements in modern globalisation.
Approximately 53% of the globe has access to the internet. This is higher in places like Western Europe (90%) and North America (88%). Similarly, 68% of the world’s population has access to a mobile phone.
All of the above has helped remove the barriers for businesses and consumers to transact cross-border.
Ireland has been a massive beneficiary of globalisation and despite having a small population and limited natural resources, Ireland is a major player in globalisation for companies.
As part of the EU we have easy access to a consumer market of over 500 million people. In the last 20 years Ireland has become a major exporter in computer software and pharmaceuticals.
7. Your Industry Is Growing
Unless you are an outlier in your field, the success of your company is probably indicative of the success of the industry you operate in.
Therefore, your competitors are probably experiencing a level of growth too. If you have considered a move for your company, so have they. Why put it off?
The prevailing wisdom in business today appears to be to move early rather than wait for perfection to be achieved.
How do I go about starting a Global Business Expansion Strategy?
The first thing to do is contact Smart MBS.
We have over thirty years' experience in helping overseas businesses establish a solid presence in Ireland. In addition to this we have great relationships with all the key influencers, government bodies and regulatory authorities. We will save you time, which means you will save money.
If you have any queries on expanding your business into Europe, please also get in touch today.
While you’re waiting for the call back, why not download our eBook for more information on Smart MBS?
