Hello! My name is Ioana and in these series of articles I am going to present how and why you should extend your business abroad and which are the most profitable countries to invest. in.
Let’s begin with a short introduction why I decided to start writing about this subject and why I think that every CEO should consider extending their business abroad. It is not only about how to do that, but also when it is the right time to act. Making a good decision at the wrong time can destroy your idea and you may not even be aware of that.
For a well-operating company remaining visible only in its own area leads to a restriction limit that is unnecessary. Sometimes the fear of trying something new can stop you from developing your business and you may skip a big step (that could be taken) for your future. It is true, that when you decide to go straight with a plan without thinking what to do on your way, you may end up with a big fail and you will start wondering why. You can have this wrong concept that extending your company across the borders can be a bad option in general.
In addition, I am going to indicate some major things that you need to consider when extending your business area. After all the organizational tasks, the next step is making an appointment with the foreign partners. This meeting will influence the whole project. Everybody knows that the first impression counts the most, so in order to make it a good one, you need to check in advance and make sure that you have all the information that you need. Some basic things as greeting forms or the dress-code may sound too typical, but trust me, when it is about different cultures, those things cannot be ignored.
It doesn’t take too long to be informed about some main stuff such as the way the other cultures dress or behave during a meeting. Take your time and check these things before you go and meet your business partners, because you may not think of that, but some cultures are so different than ours and our daily gestures can indicate something completely wrong for the others.
If you follow the next articles you can see exactly what you should or should not do in order to make a good impression concerning a specific country. I hope you will find your favorite business area and these articles will help you with your future partnership.
Before that, let’s get to learn why it is so important for your business to be extended abroad. After all, business is all about that. Why you should spend time and effort on learning about other cultures, when you can stay in your comfort zone and keep your usual customers. Well, these are some of the opportunities that come when making a foreign partnership:
- Increased output: it is more than obvious that your output will be higher after you will start promoting your business abroad; bigger covered zone, more new customers; your effort will turn out to be more productive than you thought;
- Benefits that are not available at home (home country): as I said previously, one of the big advantages are the new customers that are harder to find while keeping your business in your local area; moreover your services might be more valuable abroad; there can be customers that are prepared to spend more money on your products and you can test that only by putting it into practice.
After you have realized how to begin with this process and you also found some good opportunities that will make it become real, another important step is awareness. None of the things above are possible without being completely aware of why, when and how you need to start the process. A crucial thing is making a difference between the areas where you want to extend your business.
The developing countries are not the same as industrial developed countries and you might consider that before you decide where it is better to implement your idea. Developing countries do not always have a well-functioning infrastructure and their population is mostly poor; the citizens will spend all their money on food, and they will probably not be interested in your services.
To clearly see the difference between these two, you need to have a correct view about what a developed and developing country means. To be able to classify a country you need to look at its GDP (gross domestic product per capita). GPD is the total of the goods and services produced in one year, measured in US dollars. GDP is calculated by dividing a country’s GDP by its population. In order to classify a country as a developed one, it must have a GDP equal or more than $25.000. Here is a short list of some developed and developing countries:
- Developed countries:
- Australia: $49.144
- Canada, it does have a high level of natural resources such as oil or gas
- France: $39.678
- Germany: $47.268
- Developing countries:
- Argentina: $12.494
- Brazil: $8.727
- Chile: $13.576
- China: $8.123
Very important to know is that the price for a specific product varies from country to country. A variant of GDP makes equalization between the purchasing power by converting the product valued at US price. Another thing that you need to consider is that the GDP also depends on the size of the country. A bigger country will have a higher GDP compared to a little one. Therefore, GDP needs to be measured per capita.
There are also other indicators in order to identify a developed country. Here are some of them:
- A developed country is also a highly industrialized one;
- The birth and death rates are stable; a developed country has a good health system, so that the population can be treated well; on the other side, the families do not want to have more children, so that they can have less but healthy ones; life expectancy is 70 or more;
- The women of developed countries are career-oriented and moreover, they also have high positions at the workplace ;
- Developed countries use a disproportionate amount of the world’s resources such as oil (for driving cars);
Another measuring device is HDI (human development index) developed by United Nations. It is a metric to evaluate the social and economic development levels of countries: (such as) life expectancy, educational achievement and income, all of these become a standardized number between 0-1. The closer a country is to 1, the more developed it is.
I hope this first article has helped you on having a better vision about the first important steps to expand your business. Now that you have a general idea about this long process, you can work more on why you should consider extending your company in some specific countries.
Bibliography:
https://www.investopedia.com/updates/top-developing-countries/
http://www.diva-portal.org/smash/get/diva2:206119/fulltext01
https://keydifferences.com/difference-between-developed-countries-and-developing-countries.html
