It started as an out-of-the-garage pipe dream funded by two college dropouts. Now, it’s a global titan (Global Expansion) worth $3 trillion. That’s right, we are talking about the Apple corporation.
Every multinational company begins with humble roots in its motherland. Among their kith, they have an established market and a native familiarity. Eventually, though, they ask the big question: should they continue abroad?
Expanding your reach to foreign countries is a monumental undertaking. Cultural differences, foreign tax laws, and local competition all conspire against you. Any practical CEO rightfully questions the benefits of global expansion.
Rest assured, there are many. Read on for five advantages of globalizing your brand.
1. Globalization Increases Your Revenue
Shareholders want only one thing: business growth. Companies that fail to provide increasing profits lose investors. It’s a cruel reality, but that’s how the game works.
An expansion strategy to enter foreign markets increases your profits. More customers equals more sales. It’s basic economics at work, after all.
2. It Strengthens Brand Trust
The first thing global PEO will tell you is that a company’s image is fragile. Even the tiniest hint of speculation could tank well-performing stocks. A brand must do everything it can to give itself a rock-solid public perception.
Being internationally recognized makes you look like a successful business. People assume international businesses are all robust, established, and well-trusted. Whether or not this is true, it benefits you and your brand.
3. It Diversifies Your Income
Every business strategy, from investing to entrepreneurship, is about diversifying income. If one income stream fails, another can make up for it. In your home country, you only have one source of income.
Spreading to foreign countries diversifies your income sources. The more countries you expand to, the more sources you have. These will come in handy during an economic downturn.
4. It Gives Access to Cheaper Labor
Many Western countries have excessively high costs of living. A high cost of living means that employees require bigger paychecks. Bigger paychecks run up your operating expenditures.
In many other countries, cost-of-living is more reasonable. You can hire people for less. If necessary, you can outsource operations that might be more costly at home.
5. It May Give Unique Legal Benefits
Moving your headquarters to another country may provide unique benefits. We’re not just talking about tax benefits, necessarily. These could be legal advantages for your specific business model.
Take, for example, NordVPN. In order to preserve user privacy, they headquartered themselves in Panama. Panama’s strict privacy laws allow companies to safeguard user data regardless of government subpoenas.
The result? Foreign countries cannot demand user data from NordVPN. Foreign laws may help your business in entirely different ways.
Get the Benefits of Global Expansion
Virtually every company can enjoy the benefits of global expansion. It allows you to increase revenues, diversify income streams, and cut down on labor costs. There may also be legal benefits and added strength to your brand image.
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