Benefits of Starting a Business Overseas

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 May 18, 2017 Global Expansion , HR , International Business , New Markets   Global  Arden Ng

Benefits of Starting a Business Overseas

As the world economies become increasingly inter-connected, benefits of a company starting a business overseas are significant. Companies have recognized the need and opportunity to expand their product and services offering beyond their domestic shores. Through advancement in technologies, communication, and transportation infrastructure, it is now possible to overcome constraints that once limited global expansion.

Some of the advantages of doing business globally include:

Capture New Markets and Consumers

One of the potential problems that companies face today is the saturation of the domestic market due to competition or decline in overall consumer demand. The decision to expand abroad might be driven by the fact that there are markets segments overseas that can help expand market share and increase revenue by meeting the local demand.

Brand Recognition

The advantages of doing business overseas also include enhancement of the company’s brand awareness and recognition. This is important, as the advent and popularity of social media can help spread the brand awareness exponentially beyond geographical borders. This, in turn, generates more anticipation and potential demand in other markets.

Having a presence in key geographical markets also helps to improve customer service and support, therefore increasing customer satisfaction and retention.

Optimizing Capital and Human Resources

Moving operations overseas opens access to a wider talent and resource pool available in the foreign location. Additionally, many companies that have moved their production facilities globally, gain access to lower costs, obtain tax incentives from the local governments, and tap local talents.

New Investment and Growth Opportunities

Foreign investment is valuable for any company, as it can potentially get access to new business partners or investors. This, in turn, leads to additional growth opportunities such as diversification of customer base, and access to the broader local market by leveraging on the experience and reach of the company’s local business partners or investors.

A Global Competitive Environment

Competition in a healthy environment benefits the consumer. The advantage of global expansion comes in the form of healthy competition that spurs innovation, efficiency, and incentives to offer high-quality products or services while minimizing costs.

Government Incentives

Foreign source income and investment are always beneficial for any country. Governments and legislative authorities always seek to provide investment opportunities and incentives to attract investment. These incentives include but are not limited to tax exemptions, reduction in tariffs, such as import and excise duty and government subsidies on products.

Conclusion

The benefits of a company doing business overseas are quite apparent. However, they do not come without challenges. If the company can successfully manage to create an effective global expansion strategy, it can also successfully reap the benefits that globalization offers.

When exploring a new global location, it is hard to accurately predict the market potential and viability at the outset. This uncertainty impacts the key decisions, e.g., the scale of operations you will need in the new location.

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