The desire of companies to internationalise, that is, to enter unfamiliar markets by assuming new risks is often influenced by the glimpse of improved performance and larger profits. SMEs across the globe are renowned for their relentless pursuit of growth and superior performance. Entering the international market can be a daunting task for any company, but with the right strategy and preparation, it can be a major source of growth and success.
In this article, we will continue to explore the key factors that determine a company’s success in foreign markets and the legal and contracting considerations that must be taken into account.
I. How does a Company Experience Success in Foreign Markets?
Leadership Matters – Entering a new market requires a lot more than just translating your product or service into a new language. A company must be equipped with the skills and knowledge to respond to external pressures, such as cultural differences, economic trends, and local regulations. To experience success in foreign markets, company leaders must have a sophisticated understanding of local infrastructure, regulations, and customer preferences. This can only be achieved through market research, competitive analysis, and customer feedback.
Additionally, a solid marketing strategy and a competent business development team are essential components of success in foreign markets. A company’s marketing strategy should focus on developing a unique and compelling value proposition that speaks to the local market. This may require a restructuring of the company, including the creation of new business units specifically focused on international markets. The restructuring of the company must consider the research necessary. In this context, many major companies dedicate special teams to carrying out a PESTEL analysis when penetrating a new market. This analysis aims to present the Political, Economic, Social, Technological, Environmental, and Legal factors to consider.
Additionally, a solid marketing strategy and a competent business development team are essential components of success in foreign markets. To explain further; there is a collection of intangible capabilities that are especially salient to firms seeking to internationalise. International business competence (IBC) is an intangible often overlooked, it’s an overarching firm resource that engenders superior international performance.
This context calls for an understanding of the competencies required for the success of international marketing activities. Competencies that managers perceive as more important for dealing with the complexities of export, international and global marketing. Often the specific challenges of marketing at the international level and the need for specialized knowledge in international marketing environments and in operational techniques, as well as the importance of specific competencies for international marketers is overlooked.
Companies must be able to balance the needs of the local market with their global objectives, while also ensuring that all international expansions are aligned with their overall business plan. This requires a combination of technical expertise, business innovation, and a strong understanding of the local market.
II. LEGAL & CONTRACTING CONSIDERATIONS
Legal and contracting considerations are an important part of any international business venture. Companies must understand the different legal systems and jurisdictions that may impact their operations, as well as the importance of business ethics in a global context.
To protect their intellectual property (IP), companies must be aware of the various types of IP rights available, such as patents, trademarks, and copyrights. The World Intellectual Property Organization (WIPO) provides a range of services to help companies protect their IP in foreign markets.
Standard contract elements, such as governing law, dispute resolution processes, and professional liability, are also critical components of successful international business. Companies must ensure that their contracts are clear and concise, and that they align with local laws and regulations.
It is important for companies to establish clear policies for fraud and corruption, and to monitor their operations closely to ensure that these policies are being followed. This helps to build trust with local partners and stakeholders, and helps to minimize the risk of legal disputes.
To conclude, entering the international market requires a balanced approach; financial capability with an accurate cost of entry, an understanding of the buyer persona in the new market, an efficient analysis of competitors and a clear understanding of legal and contracting considerations. With the right combination of skills and knowledge, companies can experience great success in foreign markets, and achieve their goals of new market penetration and growth.