As the economy grows slowly at home, your business may have to look at selling internationally to remain profitable.
Before examining foreign markets, you have to be aware of the major trends in international business so you can take advantage of those that might favour your company. International markets are evolving rapidly, and you can take advantage of the changing environment to create a niche for your company. Consider the 7 areas below:
1. Growing emerging markets
Developing countries will see the highest economic growth as they come closer to the standards of living of the developed world. If you want your business to grow rapidly, consider selling into one of these emerging markets. Language, financial stability, economic system and local cultural factors can influence which markets you should favour.
2. Demographic shifts
The population of the industrialised world is ageing while many developing countries still have very youthful populations. Businesses catering to well-off pensioners can profit from a focus on developed countries, while those targeting young families, mothers and children can look in Latin America, Africa and the Far East for growth.
The pace of innovation is increasing as many new companies develop new products and improved versions of traditional items. Western companies no longer can expect to be automatically at the forefront of technical development, and this trend will intensify as more businesses in developing countries acquire the expertise to innovate successfully.
More intense and more rapid communications allow customers everywhere to purchase products made anywhere around the globe and to access information about what to buy. As pricing and quality information become available across all markets, businesses will lose pricing power, especially the power to set different prices in different markets.
5. Increased competition
As more businesses enter international markets, Western companies will see increased competition. Because companies based in developing markets often have lower labour costs, the challenge for Western firms is to keep ahead with faster and more effective innovation as well as a high degree of automation.
6. Slower growth
The motor of rapid growth has been the Western economies and the largest of the emerging markets, such as China and Brazil. Western economies are stagnating, and emerging market growth has slowed, so economic growth over the next several years will be slower. International businesses must plan for profitability in the face of more slowly growing demand.
7. Clean technology
Environmental factors are already a major influence in the West and will become more so worldwide. Businesses must take into account the environmental impact of their normal operations. They can try to market environmentally friendly technologies internationally. The advantage of this market is that it is expected to grow more rapidly than the overall economy.
If you would like to discuss how we can support your organisation to expand overseas, please contact us here or speak to Shelley or Stuart on +44 (0)121 403 3412.