Traits of successful international businesses

Many companies nowadays have understood the benefits of expand their businesses on an international scale. Whether it is to diversify their market, increase their revenues or just explore a market they have not before, international business expansion is something that can be extremely beneficial for companies if executed properly. 57% of Google’s revenue comes from […]

Many companies nowadays have understood the benefits of expand their businesses on an international scale. Whether it is to diversify their market, increase their revenues or just explore a market they have not before, international business expansion is something that can be extremely beneficial for companies if executed properly.

57% of Google’s revenue comes from outside the United States, while Apple with a similar number, has 60% of its 2014 fourth-quarter revenue coming from international markets. International business expansion can therefore be an asset to your company, but for many, it can also be a great challenge that ultimately leads to failure and a waste of not only time, but also energy.

In an effort to guide business owners hoping to expand their businesses on an international scale, this article is going to give some insight regarding the different traits of those who have been extremely successful when it came to international business expansion.

1: International understanding:

The companies who are generally doing well on an international scale usually have a founder or an executive on their team who is either from a foreign country or is a first-generation immigrant. Having leaders of the company with these kind of international experiences makes it more likely that their business practices will eventually be optimized for international growth. Think about people such as Apple’s Steve Jobs (the son of a Syrian immigrant), Facebook’s Eduardo Saverin (Brazil), Google’s Sergey Brin (Russia), and Microsoft’s Satya Nadella (India).

According to the National Venture Capital Association, 40% of publicly traded venture-backed companies operating in high-tech manufacturing were founded by immigrants. Furthermore, more than 40% of the 2010 Fortune 500 companies were founded either by foreign-born immigrants or first-generation Americans, according to a study by The Partnership for a New American Economy.

On the other hand, companies without an international perspective among their leaders are often reserved when it comes to moving into new markets. Because they do not have first-hand experience, they sometimes fail to recognize the importance and opportunities that comes with exploring global markets. Because they are not convinced they need to diversify geographically in order to scale, international business expansion is therefore neglected.

2: Web presence:

Businesses providing to their clients products and services that are based online, such as e-commerce, SaaS, PaaS, and consumer web and mobile, generally tend to experience very fast global growth, simply because they can take their software or website international without needing a large investment or to alter their structures and business processes.

Even companies that have been existing before the Internet, such as manufacturing and pharmaceuticals, tend to have faster rates of global growth if they invest heavily in online and software-based models for strategic areas of the business. Moving to the web makes a company more flexible and capable of responding to opportunity in international markets, and therefore achieve international business expansion more easily.

3: Local partnerships:

Successful global businesses tend to have an ecosystem of channel relationships, resellers, and partners who help them with their international expansion processes. Choosing international partners carefully and thoroughly is very important before entering new markets overseas, especially when you are trying to get a significant part of the market share. For instance, Apple’s partnership with China Mobile, the largest wireless network in the world, helped the company become the no. 1 smartphone maker in China. The company moved past five local competitors that previously were dominating the market one year after the deal was announced. Similarly. Uber recently announced a relationship with Starwood Hotels that will help it strengthen its presence in 100 countries.

4: Understanding metrics:

Most of the companies that have seen their revenues increase globally are rigorous and dilligent when it comes to analyzing international and domestic sales as well as marketing data.

Companies struggling with international growth generally tend to have a hard time answering basic questions such as: What are your top 10 countries by revenue share? By customer base? What percentage of your marketing budget is allocated toward international? What percentage of your sales team? Very often, just answering these questions allow companies to gain a better understanding of where they are as a business and the work necessary in order to ensure that they are having a successful international business expansion.

5. Understanding and valuing opportunities:

When thinking about international business expansion, you have to wonder whether or not the company thinks about international markets as a strategic advantage, a hassle, or something in between. Successful companies think about global markets as areas of untapped opportunity that simply must be explored. Global business is talked about as an investment in the future and a way to diversify and achieve scale.

Companies that have a harder time with international business expansion will interpret the same data negatively, thinking of global markets as more of an annoyance than an opportunity. They tend to underestimate the revenue they currently obtain from international markets, and they view any spending on global markets as a cost to be reduced.

6. Customers first:

Some of the most successful businesses all have this important mission in common. If the customer lives outside of their home markets, customer-centric organizations make an even greater effort to go the extra mile. Gobal marketing and localization is not viewed as a burden, but rather as an advantage against competitors, allowing them to attract customers in other markets, better serve them, and ultimately convert them into advocates for their brands.

7. Importance of international strategy:

If they hope to ever be successful, businesses need to value the people and processes that are critical to global expansion. Driving international revenue hinges on two key functions within the company: global marketing and localization. These areas are prioritized by fast-growing companies, often by assigning an executive helping drive strategy for international markets.

Businesses having a hard time with global expansion usually make the mistake of diluting the importance of international growth, either by placing ownership at lower levels of the organization that cannot influence strategy or within multiple channels across the organization. The business struggles to coordinate all the moving parts and drive international strategy forward when globalization becomes decentralized and has no clear owner, which is why it is important to have an expansion strategy put in place.