Globalization and technological evolution make companies look for new ways to expand their business. From this necessity, the internationalization of companies arises.
When a company chooses to expand its business to new international markets, it is necessary to make a series of decisions, including the target markets to be addressed. This decision, although complex, is essential for the success of the internationalization process, and brings a set of factors to consider.
International Expansion and Market Selection
The selection of markets consists in choosing the foreign market(s) that best fit the objectives outlined in the company’s internationalization strategy and that best adapt to its its individual characteristics.
The selection of international markets constitutes one of the main decisions of the internationalization process, and is a determining factor for its success or failure.
There are several ways to make an effective selection of international markets. However,
many companies do not have or know the necessary tools to do so, so they are not able to accurately identify the markets with the greatest potential to satisfy, meet and promote the needs of their business.
It is common that SMEs, due to lack of knowledge or resources, internationalize based on the perceptions of the decision maker, or by merely following the strategies of similar companies, not valuing the unique characteristics of their company unique characteristics of your company in terms of cultural, product, competition regulatory issues, etc., which often leads to these companies not approaching markets that could provide them with greater success and international growth.
Internationalization is a process with risks and high potential costs, so the failure in this selection can have serious financial consequences, as well as a strong impact on the impact on the company’s reputation in the target markets.
This emphasizes the need and importance of developing appropriate models for the selection of international markets.
Globalization has led to the lowering of several barriers regarding international trade, but on the other hand it has intensified competition on a global level because of the stimulus it gives the companies to approach foreign markets.
Thus, the decision making process with respect to which international markets to approach being complex, it is strongly advisable to make this selection using specific methodologies and based on objective criteria.
In Market Access we are always paying attention to the demands of the markets and the needs of our customers. If you are looking to expand your business, but do not know how to select which are the best markets to approach, we have the right solution for you. Contact us!
International Business Consultant