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Why Do Companies Go Global

Why Do Companies Go Global

Cutting-edge technology and the proliferation of e-commerce have made it easier than ever for companies to tap into international markets. Thus, expanding across borders is considered a natural maneuver for many growth-minded companies.

However, some businesses are still having doubts about going global as it requires starting over in a new market.

Why do companies go global, and what are the advantages and disadvantages of such a move? Read on to find out!

Why Do Companies Go Global

How do companies go global?

Before jumping into international markets, it’s important to consider the “how” aspect. 

Extensive market research is instrumental for any company’s global success. It mitigates the myriad of challenges that come with entering a foreign market, like defining a target audience and taking on the local competition. 

Tailoring products and services to new target audiences is also crucial. A well-developed localisation strategy ensures the services are culturally appropriate and aligned with the customers’ needs. 

Finally, using the right marketing channel can boost customer reach immensely when going global. The ideal digital marketing route should be based on the buyer persona’s age, gender, demographics, and online behavior.

What are the benefits of expanding into global markets?

If done properly, taking a company global can come with tons of benefits. As a result, businesses will reap the rewards and enhance the company’s image and revenue. 

Here are some compelling benefits of going global. 

Gain competitive advantage

Expanding overseas is a strategic way to outpace current business competitors. Global expansion pioneers obtain a first-mover advantage by leaving their existing saturated markets and gaining new customers. 

Moreover, it also allows companies to create brand awareness among local consumers. Even if the domestic competition follows the steps, they will struggle to compete with a reputable brand name. 

Increase in revenue potential

The global market presence helps companies to diminish their reliance on a single fluctuating market. Instead of suffering the highs and lows of one market, they can use the profits of the high-performing market to offset the negative-performing market. 

Products not received well in the domestic market can also be used as an offset in a foreign market. Sometimes, the product’s features match the customers’ needs better in another country. 

Access to global talent

Another reason why companies go global is the access to the untapped international talent pool. Companies can establish global teams with qualified local leaders that have a deep understanding of the local market.

The expertise of the new employees can provide insight into the latest business practices and methodologies that could become the driving force behind the company’s future feat. 

Exposure to foreign investment opportunities

Taking a business across borders can entice international investment opportunities that normally wouldn’t be available at home. Multiple governments around the world advocate for investment and expansion in their country. 

However, before deciding on a particular region, it’s important to research its local regulations and laws to ensure fruitful benefits.

Why Do Companies Go Global

What are the disadvantages of global expansion?

Even though expanding globally gives companies access to global talent, increased revenue, and potential investments, it also comes with associated risks that need to be considered in advance. 

In this section, we’ll cover some of the disadvantages of global expansion. 

Risk of compliance

International expansion comes with many complexities, especially with compliance. This is because they must abide by the new country’s labour laws and regulations, payroll obligations, and taxes. 

These regulations and laws are usually different from the company’s home country. Hence, it’s important for companies to partner with international experts to ensure full compliance. 

Setup and termination expenses

One of the main disadvantages of global expansion is that it is a high-cost endeavor. Companies must factor in setup costs, infrastructure building, and paying local employees. Plus, hiring professional consultants to keep the business running smoothly.

If the expansion plan falls through, termination costs need to be liquidated. Not to mention that closing operations is quite a time-consuming process that can take up to two years in some countries. 

Business and cultural barriers

The polarity of cultural and business practices can pose misunderstandings for global companies. Cultural training on social customs and business ethics can smooth out these barriers and create flourishing collaborations. 

Making an effort to understand the country’s language can also aid in establishing respectful cross-cultural relations. 

Global team management

Handling salaries and absence management with a globally distributed team can be a real hassle. So, companies will need a new level of HR support and administration when entering foreign markets.

A single payroll processing system, where high management can regulate employees’ payments with a single click, can eradicate unnecessary red tape. 

Why Do Companies Go Global

What factors should companies consider when expanding business internationally?

Expanding into foreign markets requires having an international expansion strategy. It enables companies to create a business model that will be sustainable in a foreign market. 

In addition, an international expansion strategy can pinpoint the factors that may prove challenging. 

Here are the factors companies need to address in their international expansion strategy. 

Product distribution

Starting a business expansion without having a thorough product distribution strategy could lead to serious losses. Because of that, figuring out the proper product distribution strategy for the targeted country is vital. 

Keeping abreast with the sales process will ensure smooth goods distribution to new customers. In addition, it maximises the customer’s reach while lowering the distribution costs. 

Brand recognition

Global expansion means expanding into new target audiences with little to zero international brand awareness. A continued effort to promote the brand in the best light facilitates a positive image among customers. 

However, certain targeted audiences might misinterpret the brand name. Being aware of the multiple translations and interpretations will prevent such misconceptions from ensuing. 

Payment methods

Companies can draw in more international customers by having an accessible payment system. Allowing customers to pay in their local currency eases the struggle of creating foreign currency accounts and converting currencies. 

Additionally, integrating a seamless mobile payment system can enable customers to purchase a company’s product or service on the go. 


A business model plays a big role in the company’s operations. When expanding into foreign markets, companies must adjust their current business model to align with the expansion strategy. 

Effective business operations also require having an operational infrastructure. This involves hiring local employees to manage different departments, like marketing, accounting, and business consultants. 

Why Do Companies Go Global

Reasons to expand internationally in 2023

Discovering avenues for business growth is most companies’ top priority in 2023. Once a certain business has proven viable in the home country, it’s only logical to expand it overseas. 

For companies still on the fence about global expansion, here are the reasons why 2023 is the perfect time to go global. 

Accelerated technological transformations

Since the beginning of 2023, the technological landscape has undergone significant changes. As a result, innovative developments in Chat GPT, blockchain, and cloud computing have directly impacted the course of business operations. 

Embedding the right technology can give companies a boost on the global stage. This also means a more effective supply chain of products and services around the world. 

Enlarged virtual talent pool 

According to recent research, 81% of prospective employees prefer jobs with a ‘work from anywhere’ policy in 2023. Companies can capitalise on such opportunities and employ the best international talent to work remotely. 

In addition, hiring foreign workers brings new perspectives on how a company’s product or service is perceived globally based on first-hand experience. 

Reduced overheads

Finding locations with cheaper running costs will be beneficial for companies in the long run. 

The production cost can be lowered by setting up certain operations, like customer services, manufacturing, and research and development, in a low-cost country. 

When planning on where to expand internationally in 2023, it’s also crucial to consider the country’s economy, taxes, and workforce. 

Immersive customer experience

Customers’ interaction with brands has been moved to the front seat, thanks to the newest VR and 3D developments. The immersive technology allows potential consumers to assess products virtually before tapping the ‘buy’ button. 

For global businesses, the customer experience must be covered as a fundamental part of their operations to ensure more accessibility and flexibility with their products. 

Why Do Companies Go Global

To wrap up

Global expansion offers many benefits to companies, as well as daunting challenges. Having a practical strategy to handle potential drawbacks will help companies to reap fruitful benefits. With consideration of the above mentioned factors, companies are guaranteed to scale on the global stage!

Gjurgjica Panova avatar


Gjurgjica is a content writer who is passionate about the written word and the latest digital trends. When she’s not in the writer role, she can be found binge-watching her favourite shows and planning her next trip.

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