Why do companies go international?

Why do companies go international?

 16 Hits - Apr 27, 2022, 8:59 AM

In today’s global economy, companies of all sizes are establishing operations in foreign markets. This type of expansion can provide several advantages, including greater opportunities for market growth and diversification. The trend of Americans going global is also likely to continue. A 2016 survey by Wells Fargo found that 87 percent of U.S. firms believe that international expansion is necessary for long-term growth.  

However, despite the growing number of U.S. companies expanding abroad, there are still many firms that haven’t made the leap overseas. If you’re on the fence about taking your company global, consider these five benefits of international business expansion.

1. New markets  

According to the U.S. Small Business Administration, 96 percent of the world’s consumers live outside of America. For many companies, international expansion offers a chance to conquer new territories and reach more of these consumers, thus increasing sales.

For example, U.S. firms like Nike and IBM maintain operations in the Netherlands because it offers direct access to 170 million European consumers within approximately 300 miles. In fact, Holland’s connection to European markets is one reason why UPS recently opened a new $150 million facility in Eindhoven, one of the company’s largest investments in Europe.

Why do companies go international?

 16 Hits - Apr 27, 2022, 8:59 AM

In today’s global economy, companies of all sizes are establishing operations in foreign markets. This type of expansion can provide several advantages, including greater opportunities for market growth and diversification. The trend of Americans going global is also likely to continue. A 2016 survey by Wells Fargo found that 87 percent of U.S. firms believe that international expansion is necessary for long-term growth.  

However, despite the growing number of U.S. companies expanding abroad, there are still many firms that haven’t made the leap overseas. If you’re on the fence about taking your company global, consider these five benefits of international business expansion.

1. New markets  

According to the U.S. Small Business Administration, 96 percent of the world’s consumers live outside of America. For many companies, international expansion offers a chance to conquer new territories and reach more of these consumers, thus increasing sales.

For example, U.S. firms like Nike and IBM maintain operations in the Netherlands because it offers direct access to 170 million European consumers within approximately 300 miles. In fact, Holland’s connection to European markets is one reason why UPS recently opened a new $150 million facility in Eindhoven, one of the company’s largest investments in Europe.

  2. Diversification 

Many businesses expand internationally to diversify their assets, an action that can protect a company’s bottom line against unforeseen events. For instance, companies with international operations can offset negative growth in one market by operating successfully in another. Companies also can utilize international markets to introduce unique products and services, which can help maintain a positive revenue stream.

Access to talent

Another top benefit of going global is the opportunity to access to new talent pools. In many cases, international labor can offer companies unique advantages in terms of increased productivity, advanced language skills, diverse educational backgrounds and more.