The Internationalization Plan for companies is a document that includes the business expansion strategy in foreign markets. This is usually prepared when a company is consolidated and wants to improve or start internationalization.
It is a detailed roadmap that establishes the objectives, markets, products and actions that must be taken throughout the process. It helps to minimize risks, but requires a thorough study of the environment, the company and the market to which you want to expand.
It can be divided into two parts: the investigation and the development of the plan. The more exhaustive the analysis, the more security it provides in decision-making.
In short, the internationalization plan is going to be the roadmap of your business. The way to undertake the adventure of expanding the company to other countries. It will tell you what capabilities you have before starting to act in international markets, which areas show potential and interest in your sector to evaluate, it will define where to go and how.
Advantages of internationalization for SMEs
The benefits of internationalization are numerous, that is undeniable, both for large and small companies. It is true that it is a challenge, different and unknown, but at the same time it can attract great opportunities.
In fact, there are many companies that in recent years have taken this step in their business strategy, seeking to get out of a collapsed domestic market. These are some of the main advantages:
- Grow in the medium and long term, allowing a considerable increase in growth.
- To better cope with crises thanks to the fact that it allows to diversify income in times of economic crisis.
- It allows you to expand your client portfolio and reach a greater number of people who fit into your target audience.
- Increases productive capacities since competitiveness is increased to be able to highlight the products or services offered.
- Strengthen the brand . In fact, consumers have more confidence in international companies.
Risks of internationalization
In this process the advantages are numerous, but it also has its risks. It is not possible to consider preparing an internationalization plan without taking them into account, since it is important to assume the difficulties that may arise during expansion.
The most common are cultural barriers that can pose a problem, either because of the language or because the product is not well focused on the culture of the country. Another of the important ones are the logistics barriers, a key point for the distribution of the product and they are conflicts that must be resolved on an international scale.
In addition, it should be considered that the selection processes are more complex , requiring a more experienced team to achieve the expected objective.
Legal aspects to internationalize a company
Considering the legal aspects is essential. These will depend and vary depending on the type of activity, the sector and the regulations in force in the foreign market. The most common and general are:
- The regulations established by the World Trade Organization (WTO).
- Consider the internationally accepted collection methods agreed to make your exports.
- Know the Tariff Law and the rules that influence international trade operations.
- Have a professional who knows well the taxation of the country where the company is going to expand.