Why do companies go global? Here are three excellent reasons to start planning your next move that could take you from Copenhagen to Costa Rica and from small markets to a global presence.
Many companies around the world have already gone global or are planning on doing so in the near future. A survey conducted by Wells Fargo in 2016 found that nearly 90 percent of American firms believe that long-term growth is dependent on international expansion. It’s not just American firms going global, though — many European and Asian companies, both big and small, are broadening their horizons, thanks to a more globalised world and better connections across the globe. Why is going global so attractive? Here are three key factors that lead businesses to hop on that aeroplane of global growth.
Greener pastures and stronger roots
Sometimes home just isn’t enough and staying put limits a company’s potential for profit. When your business has grown exponentially and you’re getting close to exhausting your home market, you can either diversify your offering locally or make the jump and push for a global presence. In today’s world, where we are all globally connected to faster-than-ever internet connections and tools for maintaining relationships both within a company and with its client, going global is easier and more attractive than ever before. Taking the leap could go sour — or yield great profits. Using internationalisation as a tool of expansion gives a company that is operating on a smaller domestic market an opportunity to widen the pool of its target audience. Potential for bigger revenue exists for both big and small companies; American firms like Nike have made the Netherlands their home, as it offers them an easy road to almost 200 million European consumers located within under 500 kilometres. Establishing offices in a busy hub allows any business to expand to markets that would otherwise be difficult to access.
When you play the recruitment game like giants such as Netflix, you could end up with a top-tier team assembled from diverse talents from around the globe. Thinking global-first should be at the heart of every company’s global business model. For instance, when Netflix took the leap and set up shop in Amsterdam in 2019, it lauded the city as a potent enabler for a more profitable company culture. In Amsterdam, Netflix found an opportunity to foster an international and multilingual culture fortified with talent from around the world. By recruiting global talent, yet gathering their pool of talent in one central location far from Netflix’s headquarters, the company ensured that they have local talent to answer to consumer demands around Europe, thousands of kilometres away from the original home of the company. By building a company of diverse talent, companies also allow diverse innovation to happen. International labour transforms a company from within: from linguistic skills to cultural flairs and different educational backgrounds, having a global pool of talent ensures that a company is stretched to its full potential.
Diversifying your market and your business
Opening your business up to the world is a way to diversify your market, financing and business. Setting up multinational operations is an excellent way to bring in diverse, global investments and profit from various different governmental incentives. Expanding internationally not only opens up new markets, but also allows you to grow your business to answer not only local, but also global opportunities. Access to new technologies, ecosystems and hiring mechanisms on a global scale fortifies a company’s operations at home, too. Diversifying through global operations has been expertly done by, for example, the Coca Cola Company: by taking over the Chinese, Indian and South-Korean markets, the multinational conglomerate has succeeded in growing both the brand’s reputation and revenue worldwide. A more distributed business is also a safer business: stable global revenue sources ensure that shifts in the domestic market don’t feel like tsunamis in the company’s ecosystem.