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Internationalisation and Globalisation – When is the right time to expand your business?

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At Kooomo, global expansion is always a hot topic of discussion – and in today’s digital-first society, it’s easier than ever to break into new markets (with the right tools, of course.) Many businesses, operating on a local scale, can experience rapid growth from the time they’re established right up until they become an SME. This where they reach the glass ceiling – it can be difficult to overcome the challenges of international expansion. 

At this point, you need to decide how you’ll choose to expand into these worldwide markets. How will you manage your goods? How many resources are you willing to put into this exciting new venture? When it comes to expansion, there is still one question that can cause some confusion – is going international and going global the same thing? 

Internationalization and globalization are two words that hear a lot. But what exactly is the difference between the two?

Internationalisation

What is internationalisation?

Simply put, internationalisation is the first step to becoming a global company. This process involves the exporting and selling of your goods and/or services to other countries. Outside of this, however, you are not putting any further investment into these countries. All of the business functions and headquarters remain in the country of origin of your business.  Nor are you changing your offering to accommodate local audiences.

However, your customer journey will include local taxes and VATs, currencies and languages.

In other words, internationalization refers to the process of entering new markets with a general product or service, with localised messaging and processes. 

Many of our clients would be considered international retailers such as Butlers Chocolates, Avoca and BlauerUSA. Other examples might include the likes of Apple – who are headquartered in the USA and do all product development there. However, they sell their products worldwide. By contrast, let’s discuss Globalisation.  

Globalisation

Globalisation is synonymous with internationalisation and often interchanged. However, it differs in that it is the process of integrating your business into countries around the world. You might now decide to invest in the countries you operate within by opening local sites and alter your product or service for cultural integration.  Thereby, having an effect on local economies.

Take McDonald’s for example. McDonald’s franchises are located all over the world with branding and messaging that is recognisable wherever you go. While their offering (fast food) is the same across the globe, the menu has been customised in many countries. In India, you’ll find that beef and pork products are not served – whereas, in China, there are many rice dishes available.

Is my business ready for international expansion?

Expanding your business internationally

There is definitely a crossover in many of the examples we see today. Nike, for example, is technically an international company as all company decisions are made within the US headquarters and products are exported to other nations. However, at this stage, it would definitely be considered a global company

Blurred lines like this can often mean expansion plans are unclear to both the business and its consumers. It’s important not to skip the internationalization process during your globalization efforts – this could even be the means by which you test the waters. 

So the next question is, how do you know when to begin expansion? 

There comes a time when your business will have reached its short-term goals, and extending into the long terms goals seems like the next logical step.  You should assess the challenges of international expansion before diving into uncharted waters.

Like anything else, for success, you should examine your options, test the market, create a plan and do a little soul-searching before expanding into a foreign marketplace. Here’s where you should start:

Respond to demand

Is there a demand for your product in particular markets? Minimise risks by expanding into markets where you know your product or service is sought after. Have you had inquiries from potential customers in certain countries? You could also seek advice from retailers already in those markets (who are not your direct competition, of course.) 

Before you even consider going global, spend time researching the markets that you’re interested in. Gather industry and consumer data, pull together competitor analyses and get familiar with the legalities associated with trading in each new market or country.  A clear expansion strategy will be the difference between sinking or swimming. 

Do you have the tools for global expansion?

eCommerce platforms for global trade

There is a huge opportunity for retailers and brands to expand into new markets. However, limitations and policy compliance often hold them back. With certain digital commerce platforms, global expansion requires multiple storefronts. It can also require manual input of your product catalogue for every individual language and/or currency you want to sell in. 

You should ensure your eCommerce platform has the ability to grow with you. You will also need to consider the new languages, new currencies, new taxes, VAT and regulations in which your site will operate.

But true localisation goes so much deeper than basic languages and currencies.

Accepting all major credit and debit cards for your international customers at checkout isn’t enough to make you an international player. Did you know that In Italy, prepaid cards are popular amongst online shoppers, while in Hungary, cash-on-delivery reigns supreme?. Did you know that BNPL options cannot be the default payment method in Sweden, while in the UK it annually becomes more popular by 39% YOY? 

If you want to make a successful play international expansion, you should dig deep into all of the cultural nuances and preferences that exist. You can discover more about Kooomo’s unified approach to global expansion here. 

Moving from local to global supply chains 

Supply chain processes and systems will work a little differently when it comes to internationalisation. Transportation and communication will be paramount to your success. When working with smaller quantities on an international scale accuracy is essential. If companies merely dip their toes in global waters, it’s not critical to redesign the whole supply chain network.

However, if the strategy is successful and starts accounting for a significant portion of the business you might need to rethink your strategy to accommodate the shift. For example, distribution points, contractual arrangements with 3PLs, warehouse designs or the level of automation.

Then there is the standard of delivery that you have set for your business. Locally, next-day delivery is easy to guarantee – but what happens when you scale up? Something that merchants often forget is that there is a huge difference between delivering items quickly, and delivering items on time. You could use DOM systems in conjunction with the right messaging and content to ensure that packages reach their destination when and as expected.

Having the right tools to manage your supply chain will be vital for managing your operations as you scale upwards.

Conclusion 

Internationalisation and globalisation are often interchanged, but there are very defining features between two – albeit, you cannot (or are less likely to) have one without the other. Internationalisation is the first step towards going global. However, be sure to set about this journey at the right time – wait too long and your competition might snap up the opportunity, dive too soon and run the risk of losing the market before you’ve even started. 

With an educated strategy, the right tools and effective localisation successful global expansion can very much be within your reach.  Many retailers might want to outsource this to an out-of-the-box solution to ensure the process is done correctly and legally accurate. Kooomo’s unified approach can relieve you of the finicky tasks that come with international expansion – freeing you up to focus on achieving your business goals.

If you wish to chat with us about taking your business to the next stage, why not book a 1:1 consultation with our team? 

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