Go Global to Increase Sales
Companies are looking overseas to tap into global trade for a number of reasons. Among these are avoiding the risks associated with focusing on a single market, capitalizing on new growth in emerging markets, and taking advantage of lower foreign costs as compared with domestic costs. If you are thinking of going global, consider the following tips:
1. Determine appropriate targets. Focus on one country at first. After things are happening there, then move to the next hot spot. Don’t try and expand internationally too fast as some businesses make the mistake of spreading themselves too thin in their global expansion.
2. Make friends with the locals. Determine whether there are individuals and companies who you can align with to help pave the road ahead. Each market is different in regards to business culture. For example, what works in Japan may not necessarily work in the Philippines.
3. Leverage local currencies to drive the cash. Leverage the appropriate foreign exchange (FX) strategies that can take advantage of currency fluctuations. Don’t view FX strategies as an operation function. When businesses simply look at FX as an operations function, often international transactions get treated by the accounts payable or accounts receivables department as just another payment that needs to be processed. This is dangerous as the foreign currency markets are volatile and if exposure is not actively managed, it can have a negative consequence for your firm.
Though your company may have many reasons to go global, the main motivation is usually to make more money. If your global business strategy is implemented properly, the benefits can be yours for the taking.
Ryan Gibbons Managing Partner GPS Capital Markets Salt Lake City