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The Advantages and Disadvantages of International Expansion

Updated: Jul 18, 2022

Are you considering taking your business beyond Canada? The global expansion reasons are almost always the opportunity for more net profit. However, you have to consider the pitfalls, too, along with the benefits of international expansion to business.

Let’s take a look at the advantages and disadvantages.

Advantages Of Global Expansion

Enter A New Market

It’s possible your business has reached the end of how much it can grow inside Canada. The logical thing to do is try and see if your product is required in a new market. You can begin with a new region, find a new customer base and slowly make your way to other regions. After all, that’s how most big corporations are made.

Win The Race

Look into regions where your competitors haven’t stepped foot. Expanding in areas where your products are in demand and your competitors have failed to account for them can make your brand bigger. Then, when competitors do enter the same market, you will still have a huge loyalty from your customers.

Find Local Talent

There could be people with skill sets you can’t presently find in Canada. Your global expansion strategy can help you find new, fresh talent. Specialized local talent can also help your business blend in quickly into the market.

Serve International Clients

Is there a country where you get overseas orders anyway? The expansion will make your product accessible to them. In addition, you can lower the operational costs and hire local talent who can speak the local language—this work towards building long-term loyalty even abroad.

Disadvantages of Global Expansion

Setting Up And Termination Cost

If you’re thinking about what to determine before global expansion, the first thing is set up and termination costs.

How much money will you spend to set up offices and factories and hire employees? If you were to close the branch, how much would the potential cost be with severance pay and such?

Different countries have different laws, which you have to factor in. You will need accountants and international lawyers. You are looking to spend lots of money before you can begin earning it back, provided your expansion is successful.

Cultural Difference

There are laws that you have to comply with. In addition, there is a difference in culture and business practices you must learn about. Any employee you send overseas should have cultural training not to offend local employees and customers.

Fear Of Failure

Not every business which expands internationally succeeds. After spending so much capital, you must brace for the fact that the business might be unsuccessful. This is why you should assess the demand for your pre-existing product or create products that will go well with the culture.

Final Thoughts

If you’re expanding globally, you also need to invest in localized digital branding for these countries. Hire companies such as GoYou Branding. They have capable teams who can take care of your brand’s social media posts and websites. You should also contact them if you’re expanding to Canada.

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