In this day and age, we are all connected. Whether through the internet, communication, or trade, borders are crossed every day. With such a connected world, your business’s revenue does not have to be confined by borders. You can employ a global business strategy to reap the rewards of trading in a worldwide market.
Generally speaking, a global business strategy refers to taking your business beyond your home market, or international expansion. There are three different classifications of international expansion: International, Multinational, and Global strategies. Often times, these three areas are grouped together and just called “Global Business Strategy.” While all involve taking business outside of one’s own country, they have different variations that suit some companies better than others.
The “International” classification of a global business strategy is employed by companies who may sell in foreign markets, but their primary focus is on their home market.
These companies may include international strategies in their business model to increase sales, but they know that their main target consumer is local.
The “Multinational” classification of global business strategy is utilized by companies who decide to market their products differently per country they are sold in. This marketing can come in terms of branding, or just in the medium in which the company advertises their services. Companies who use a multinational business strategy adapt differently to each market they are in. The “Global” classification is more of a “one size fits all”
Organizations that have a global business strategy are more likely to penetrate global markets faster and more effective
approach. These companies try to make their products and marketing generic enough that they can use them anywhere. This can save time and money as individual branding can be very costly.
This can save time and money as individual branding can be very costly. Determining the best classification of global business strategy for your company to utilize largely relies on what your product or service is. For example, it might make more sense for a meat company to stay local/international than to go multinational and global. Meat spoils, and shipping internationally could be extremely expensive. Another example would be a software company. Computers and software are global, so it might be wise for that company to global as well.
So why does a global business strategy matter? By going international, you can expect the benefits of a worldwide revenue. The further your reach and the bigger your consumer base, the more sales you make.
Localization is key to any Global Business Strategy
In order to make your global business strategy truly work, you have to have a localization strategy. Localization is the process of formatting your product/service to the market in which you are providing it. It stretches beyond just translating advertising and services into the target language. It requires analyzing the culture of your target market and catering to it. Some advertising that works well in Germany
might not be as positively received in South Africa. When you localize your global business strategy, you increase its success rate.
Many companies prefer standardization over localization, perhaps this is to save costs on individual marketing. Standardization could best be associated with the “Global” classification previously defined. Standardizing your product might be best for your company. If you are looking to have the most expansive reach possible, standardization of your product/service will save you time and money. However, if you are looking to expand into a more specialized market or area, localization is worth the time and money.
Which Classification Of Global Business Strategy Is Right For You?
International:Your product or service is geared more towards your regional market. This could be because your product is perishable or because it is so specialized that other markets have no little to no need for it. You can introduce your services internationally, but you will focus most of your efforts on your local market.
Multinational: Your company provides goods or services that appeal to a wide range of audiences. If your company fits in the multinational classification, localization will be a good strategy for you.
Global: Your product or service is standardized and appeals to all. Your marketing and branding can be generic. You will have a comprehensive strategy that appeals to most, if not all, audiences.
If you are looking to increase profits and the reach of your company, a global business strategy is a must-have.