How to Expand a Business in the Global Marketplace
Published: 06/05/2009 by Alan Vandenbroek
Due to economic recession and a weak dollar, small businesses that were planning to expand themselves beyond the country may consider venturing into international market and profit from it. In doing so, they must implement various strategies and take into consideration some important facts before planning to expand their business in the global marketplace.
Residents of Canada, New Zealand, Slovakia, Turkey and European Union countries like Britain have benefited from a weak dollar. They can now purchase more in terms of dollar as their currency has appreciated with respect to the dollar. Export of products and services in these countries is a sensible proposition. Therefore, small businesses planning to expand should consider tapping this vast pool of wealthy consumers by aggressive marketing and exporting in these countries.
Technical competence and experience in wide range of products and services is a stronghold of many Canadian firms. A weak dollar has presented an opportunity to make this knowledge and expertise available to firms of other countries in affordable rates. Small businesses may consider manufacturing products for foreign companies to reap profit.
Profit of a foreign firm is expected to be in currencies that have appreciated in terms of dollar. Converting the profit into dollar terms is a sensible idea. Investing in a foreign firm is risky but licensing products to them is safer. Cost of manufacturing in countries like India and China is quite low due to cheap labor and low manufacturing resources. So after building the brand, a company of that country should manufacture the product. Lower cost of production would help to increase the profit margin.
Looking for a potential business partner from a foreign country is also a good idea. There are established cash rich companies of developed countries who are eager to invest their capital in Canadian business and manufacturing. There are also firms who want expertise to complete their projects. These prospective routes of attracting foreign investment in business should be taken into account.
Expanding business on foreign soil may ultimately involve opening a branch or subsidiary there. This proposition becomes more attractive when a suitable and responsible business partner can take charge of operations in that country. To manage the foreign office from the country and dealing with the foreign laws may prove to be costly. However, if the business runs smoothly for few years then plans may be modified accordingly.
Investing and expanding business in foreign countries need a lot of sophisticated planning and aspiration. Many small businesses may lack that vigor. However, they may consider optimizing their profit by increasing exposure in foreign sales and sourcing low cost manufacturing resources from countries like China. However, outsourcing of resources should not mean compromising with the quality of products and services. Expanding a business has its own risks, but there is no reward without risk in business.
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