GLOBAL EXPANSION

Global expansion refers to a company's decision to establish a presence and grow in overseas markets
for strategic or financial goals or incentives.

To help your team understand what it takes to expand overseas, we’ve compiled a condensed list of
best practices for global expansion.

First and foremost, we suggest putting together a strategy for international growth. Your company’s
strategy should highlight goals, target markets, and cultural connections to keep your headquarters
aligned with your overseas operations

1. Use an agile approach

Take comfort in knowing that your company doesn’t need to fully commit to a country by establishing a
foreign subsidiary. Your team also doesn’t need to solely rely on international independent contractors
to get work accomplished.

Instead, a more agile approach would be to partner with a global expansion expert, like an employer of
record (EOR). An EOR allows organizations to quickly enter new markets without entity establishment
while ensuring full compliance with local tax and labor laws.

Working with an EOR partner to handle regulatory requirements and difficult tasks like hiring
international staff and administering global payroll and benefits can help your company get established
in a new country quickly and efficiently.

Also, partnering with an EOR allows you to avoid investing in large assets and commitments until you’re
certain that your move will be a success. By taking smaller, flexible steps in international growth, you’ll
typically find greater results.

Learn more: What Is an Employer of Record (EOR)?

2. Embrace the culture

Your target country’s culture will be a key section of your global expansion strategy. Before committing
to a market, even with one of the agile approaches listed above, test the market through personal
research.

Whether it’s you, your business partner, or the entire team, the decision-makers in a company need to
visit the target market and spend some real-time there. While overseas, learn about the customs,
people, places, and successful businesses. This research includes a clear investigation of your
competitors.
The primary cultural differences you’ll find relate to language, religion, management style, gender
discrimination, skills, personalities, and education.

In order for your company to find success, you’ll need to determine if your firm can adapt to the cultural
differences and determine how to do so in a way that stays true to your business.

3. Establish international partnerships

One of the most effective ways to learn the culture is by establishing partnerships with local, trusted
experts. Find an international partner that has access to an extensive network of potential customers
and employees. This helps you quickly gain access to the market when you establish your legal presence.

Your partner may end up developing new business opportunities if you’re not readily available to travel
overseas, which makes their network incredibly valuable.

Also, consider developing relationships with local legal providers, human resource leaders, benefits
brokers, and recruiters. Plus, consider various strategic business partnerships with local companies. A
company that compliments your service or product may be another way to get quickly introduced to the
foreign marketplace.

4. Rely on an experienced team

Velocity Global's team of experts works in over 185 countries and helps businesses, like yours, develop a
legal presence in new global markets.

If you need assistance with global expansion or simply want to know if this type of growth is the best
option for your company, contact Velocity Global today.

What do you consider about global expansion?

1. Market Research: It is essential to conduct thorough market research to identify potential target
markets. This includes analyzing market size, growth potential, competition, cultural factors, and
consumer behavior.

2. Legal and Regulatory Considerations: Understanding the legal and regulatory environment of the
target market is crucial. This includes laws related to business registration, intellectual property
protection, import/export regulations, labor laws, and taxation.

3. Cultural Adaptation: Adapting to the local culture is important for successful global expansion. This
includes understanding cultural norms, values, and preferences, as well as adapting products, services,
and marketing strategies to suit the local market.

4. Infrastructure and Logistics: Assessing the infrastructure and logistics capabilities of the target market
is necessary. This includes transportation networks, communication systems, distribution channels, and
supply chain management.
5. Financial Considerations: Evaluating the financial aspects of global expansion is vital. This includes
assessing the cost of entry, funding options, exchange rates, pricing strategies, and potential return on
investment.

6. Competitive Analysis: Analyzing the competition in the target market is essential. This includes
identifying key competitors, understanding their strengths and weaknesses, and developing strategies to
differentiate your business.

7. Human Resources: Building a strong global team is crucial for successful expansion. This includes
hiring local talent, developing cross-cultural communication skills, and providing training and support for
employees in the target market.

8. Risk Assessment: Conducting a comprehensive risk assessment is important to identify and mitigate
potential risks associated with global expansion. This includes political risks, economic risks, legal risks,
and operational risks.

What is the benefit of global expansion?

Global expansion offers several benefits for businesses:

1. Increased Market Reach: By expanding globally, businesses can access new markets and tap into a
larger customer base. This provides opportunities for revenue growth and diversification.

2. Revenue and Profit Growth: Global expansion allows businesses to generate additional revenue
streams from new markets. It can also lead to increased profitability by taking advantage of cost
efficiencies, economies of scale, and favorable market conditions.

3. Competitive Advantage: Expanding globally can help businesses gain a competitive edge by
differentiating themselves from competitors. It allows them to offer unique products or services, access
new technologies or resources, and leverage their brand reputation.

4. Access to Talent: Global expansion provides access to a larger pool of talent. It allows businesses to
recruit skilled employees from different regions, benefiting from diverse perspectives, expertise, and
cultural insights.

5. Innovation and Learning: Operating in different markets exposes businesses to new ideas,
technologies, and business practices. This promotes innovation and learning, leading to the
development of new products, processes, and strategies.

6. Risk Diversification: Expanding globally helps businesses diversify their risk exposure. By operating in
multiple markets, they can reduce dependence on a single market and mitigate risks associated with
economic downturns, political instability, or regulatory changes in a specific country.

7. Brand Enhancement: Global expansion can enhance a business's brand image and reputation.
Operating in multiple markets demonstrates credibility, reliability, and a commitment to serving
customers worldwide.
8. Access to Resources: Global expansion provides access to new resources, such as raw materials,
manufacturing capabilities, technology, or intellectual property. This can contribute to cost savings,
improved product quality, and enhanced competitiveness.

9. Learning and Adaptability: Expanding globally requires businesses to adapt to different cultures,
market conditions, and consumer preferences. This fosters a learning culture within the organization
and enhances its ability to adapt to changing environments.

10. Long-Term Sustainability: Global expansion can contribute to the long-term sustainability of a
business. By diversifying revenue sources and accessing new markets, businesses can reduce
dependence on a single market and position themselves for long-term growth and stability.