A mini project on Internationalization (i18n)
Good afternoon everyone, thanks for giving me this opportunity to express my view and highlight the importance and advantages of internationalization.
Internationalization can also be referred to as “i18N”, is the process to plan and implement products and services in a manner that makes them conducive (making a certain situation or outcomes favorable or possible) to localization — the process of adapting to specific local languages and culture
In the context of economics, internationalization can refer to a company that takes steps to increase its footprint or capture greater market share outside of its domestic territory by branching out into international markets.
“internationalization is the process of expanding a business or organization’s activities beyond its domestic borders.”
Internationalization includes:
[Exporting is the simplest form of internationalization, where a company produces goods in its home country and sells them abroad. This strategy can be a good way to test foreign markets and generate additional revenue, but it can also be expensive due to tariffs (A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods) and transportation costs.
Licensing involves giving another company the right to use a company’s intellectual property in exchange for a fee or royalty. This can be a good way to enter a new market quickly and with minimal investment, but it can also be risky because the licensee may not adhere to the licensor’s quality standards.
Franchising is similar to licensing, but it involves giving another company the right to use a company’s brand name, business model, and operating procedures in exchange for a fee or royalty. This can be a good way to expand rapidly with minimal investment, but it can also be challenging to maintain consistency across different franchise locations.
Joint ventures involve partnering with a company in a foreign country to establish a new business entity. This can be a good way to share the risks and costs of entering a new market, but it’s challenging to find a suitable partner and negotiate the terms of the joint venture.
Foreign direct investment involves establishing a wholly owned subsidiary or acquiring an existing company in a foreign country. This can be a good way to gain full control over operations in a foreign market, but it can also be expensive and risky due to differences in culture, legal systems, and business practices.]
internationalization can be achieved through three strategies broadly categorized as multi-domestic, global, and transnational strategies:
- Multi-Domestic Strategy: A multi-domestic strategy is a type of international business strategy in which companies try to meet the specific needs of each local market by customizing their products, services, and marketing strategies accordingly. This means that a company may have different product offerings, pricing strategies, and promotional campaigns in each country or region where it operates. The international company seeks to compete more as a domestic player than as a foreign provider of goods and services. Multi-domestic companies typically have a decentralized organizational structure, where decision-making is pushed down to the local level to ensure responsiveness to local market needs. This approach can be effective in highly fragmented markets with diverse consumer preferences and cultural norms, but it can also be expensive and difficult to manage. (examples to be included if necessory)
- Global Strategy: A global strategy is a type of international business strategy in which companies try to standardize their products, services, and marketing strategies across all markets in which they operate. This means that a company may have the same product offerings, pricing strategies, and promotional campaigns in all countries or regions where it operates. Global companies typically have a centralized organizational structure, where decision-making is made at the corporate level to ensure consistency and efficiency across all markets. This approach can be effective in highly integrated markets with similar consumer preferences and cultural norms, but it can also be challenging to adapt to local market needs and regulations.
- Transnational Strategy: A transnational strategy is a type of international business strategy in which companies try to balance the benefits of global integration with the benefits of local responsiveness. This means that a company may standardize certain aspects of its products, services, and marketing strategies across all markets while also customizing other aspects to meet local market needs. Transnational companies typically have a hybrid organizational structure, where decision-making is both centralized and decentralized to balance global and local priorities. This strategy is a middle-ground between multi-domestic and global strategy. It calls for slight modifications to products or services according to the needs of local markets but keeps consistency at the same time. This approach can be effective in complex, diverse markets where both global consistency and local responsiveness are critical for success.
Advantages of International Expansion
Obviously, one of the biggest advantages of international expansion is new sales. Increased sales equal more revenue, which can often lead to further business expansions. So, with that in mind, what are the other advantages of international expansion?
1. Entry into new markets
The first advantage of international expansion is access to new markets. Once a company has built deeper roots in its home country and found great success, then it makes sense to take business abroad. With access to new markets, a business has the potential to build a new customer base.
In addition, open borders provide businesses with access to more untapped markets quicker. For example, a business that expands into Europe has access to many more countries and customers via open borders.
2. Access to local talent
Specialized talent can be hard to find in your home country. However, expanding abroad gives you access to a pool of potential workers with unique skill sets. As an added bonus, local talents get room to explore and expand their experience by working abroad and encountering new opportunities and obstacles.
3. Increased business growth
One of the biggest advantages of international expansion is increased business growth. Entering overseas markets allows faster growth for businesses. By extending the businesses to foreign grounds, new audiences experience your product or service. This could lead to further expansions and increases the chances of success of the business.
4. Stay ahead of the competition
Go to market before your competitors do. Expanding abroad allows you access to new customers and visibility that your competitors might not have. Expanding abroad is also a benefit to get out of a saturated market and be one step ahead of the competition. It helps the business to get out of a monotonous market and explore a wide and vivid range or spectrum before anyone else
5. Regional centers
One of the reasons why businesses expand globally is to be able to provide a reliable service to their international clients. By setting up in a new country, a business will be able to lower its operational costs. In addition, it facilitates the hiring of local workers who know the local language, and customs you can easily modify and customize your product in accordance with the needs of the locals without complications or delays. This enables you to reach a wider international audience.
Disadvantages of International Expansion
As well as there being lots of advantages, companies do face a lot of challenges and risks while expanding abroad. (And as we know to gain something one must be willing to lose something.) Below, is information on the potential pitfalls and risks associated with international expansion.
1. Cost of establishing and termination of an entity
Whether you are planning a long-term expansion, or just testing a market you need to prepare and factor in both setting up and shutting down costs. Building infrastructure, setting up a business entity, and paying local workers can be very costly. Not to mention, it can be very time-consuming.
Each country’s government operates differently. Therefore, to work legally and compliantly, you may need to hire lawyers, local tax accountants and international HR experts. In addition, ongoing costs are required to keep running the business successfully.
Again, if plans don’t work out you may want to shut the operation down. In some countries, closing operations can be expensive and may take a long time — sometimes up to two years depending on the country.
2. Compliance risk ( the state or fact of “according to” or “meeting the rules or standards”)
Entering new markets can be complex. When expanding into a new market, a business must adapt and operate accordingly to the country’s regulations. These regulations may be very different from country to country and might be different from your home country Therefore, it is important to partner with the right people who help you to remain compliant and ensure the correct business procedures are followed every day.
“Remaining compliant is key to successful global expansion. failure to remain compliant can lead to serious cases and costs.”
3. Business practices and cultural barriers
Business and Cultural operations are different in each and every country and can be challenging to cope with. If you are expanding to a country that has a different business culture to your own, it’s best to receive some cultural training in their business practices as well as social customs.
“Language issues can also cause problems. So, it’s beneficial to understand the country’s language. This eases smooth the transition of expanding into the new country.”
4. Managing international employees
Going global brings many advantages. However, hiring international employees requires a new level of HR support and administration. If you do not have the capabilities in-house, then you will need to outsource.
As mentioned before, business and employment regulations may be different than in your home country. Therefore, it’s vital that you partner with an international HR expert who will ensure your workers are legal and compliant to work.
Building a team that meets your requirements and understands your plan of action is important so that your plants are completed on time, consistency and quality of work is maintained with customer satisfaction and with customer retention(the continued possession, use, or control of something.)
Conclusion
Finally, I would like to bring this speech to an end by concluding that Internationalization is an initiative that facilitates the expansion and diversification of business opportunities, reaching out to a wide range of audiences, and taking advantage of new technological developments.
“Internationalization is the key to understanding different cultures by mastering our traditions and customs to reach out and compete at global levels”
internationalization means the ability to understand the local needs of every market globally and provide them with a solution that meets their interests and keeps the product consistent at the same. ( can add your views too, data and examples are up to you)
thanks to: GPT, Capital-GES, Investopedia, and Technitrad for the inspiration
//////
