The challenges of internationalisation
Five challenges when going global and how to solve them.
Taking your business global can open doors, expand horizons, and elevate your organisation to the next level. But, as with any big move, expanding into a new territory comes with its fair share of considerations.
When seeking to internationalise, businesses need to plan around several key challenges. Let’s take a look at these challenges and how to overcome them.
1. Choosing and understanding your new market
Internationalising your business means conducting extensive market research, to determine the best place for your company to expand into. This means gaining a deep understanding of your target market and demographic, and assessing where the appropriate gap in the market exists; to avoid moving into an oversaturated market. Leverage your organisation’s USP (unique selling point), to ensure that the market into which you are expanding is ready and waiting for your product.
2. Navigating cultural differences
When expanding your business into a new country, it’s essential that you learn and understand the local culture and be cognisant that this culture may vary dramatically from what you and your staff are used to. For example, you may be expanding into a country where certain practices, such as drinking alcohol, are illegal, or where the social norms are different from those at home.
Ensuring that you are both aware of the cultural differences in your chosen country - and that you are respectful of the local standards and customs - is key to successfully expanding your business. Extensively researching and travelling around your chosen country, as well as employing local entities and staff, will support you in learning about and appreciating the location’s culture and help you to avoid any faux pas or misunderstandings.
3. Navigating legal differences
Ensuring that you are compliant with local law in your chosen country, is vital to the success and longevity of your business. Law varies hugely from place to place. Ensure to seek local legal advice, to guarantee your company’s compliance with all local regulations. Non-compliance, even if accidental, can lead to fines and legal prosecution .
4. Managing operations remotely
Managing your foreign operations remotely can be challenging. So, taking into consideration time zones and language barriers, when choosing a region to expand into, can be key to successfully supporting your business abroad.
Ensuring that you are equipped to practically communicate with and support your employees in your new location is crucial. Hiring an Employer of Record is one way to ensure that your employees have on-the-ground support and local, professional HR advice available to them.
5. Exchange rates
When internationalising your business, fluctuating exchange rates can be a headache as they can cause precarious financial conditions. One way to mitigate these risks is to use hedging techniques. Hedging techniques can support the stabilisation of exchange rates.
According to Eastern Washington University, understanding the factors that determine exchange rates and the financial risks caused by fluctuating international markets, is key for global business management.
When seeking to internationalise, businesses can face all sorts of barriers. However, many of these perceived challenges can be easily overcome with the right support.
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