How to Create a Global Expansion Strategy

‍Global expansion is undoubtedly one of the best ways to tap into international markets, acquire world-class experts from a large pool of talent, and set your company up for long-term success. 

But without a solid global growth strategy, expansion into a foreign market is near-impossible and can result in delays, extra costs, and wasted resources. Even some of the world’s most successful brands—including Target, Starbucks, and Walmart—have struggled to succeed in some overseas markets.¹

Therefore, an international expansion strategy isn’t just a smart tactic: It’s a business imperative.

But where do you start? What can you expect along the way? And how can you uplevel your efforts throughout the process to ensure successful global expansion?

This guide will give you a clear understanding of what a global expansion strategy is and how your business can formulate its own plan successfully. Below, you’ll learn the leading strategies to expand business globally and step-by-step guidance on mapping out your unique international business expansion strategy, from the consideration phase to a company’s launch.

What Is a Global Expansion Strategy and Why Do You Need One?

A global expansion strategy is a formal business plan that outlines how a company intends to expand its operations into foreign countries and markets while mitigating risks, planning for challenges, and enhancing revenue growth. To be successful, your global expansion strategy should include clear timelines and budgets, thorough research, realistic goals, and dedicated talent.

Having a considered international business expansion strategy in place will help you to:

• Expand into the right markets at the right time.
• Use time and money efficiently towards your global growth.
• Reduce risk and stay compliant with local regulations.
• Build a competition-crushing team.
• Scale your business faster.
• Increase profitability.
• Amplify brand awareness and recognition.²
• Bolster your company’s resilience.³
  

Your strategies for international business expansion should give clear structure and guidance to those in charge of executing it, thus making it a crucial part of your overall global expansion process.

How to Create a Successful Global Expansion Strategy

Creating a robust international business expansion strategy is a big task; it requires substantial time, dedication, and resources. And yet, it certainly isn’t an impossible feat. Data from 2022 indicated that 72% of global businesses were determined to move forward with their global expansion plans despite looming economic concerns and uncertainties.⁴

Crafting a global expansion plan will make scaling your business far easier and more successful in the long run.

To help you hit the ground running in a different country, we’ve broken down the global expansion strategy process into these simple steps:

1. Set Company Goals to Guide Your International Expansion Strategies

Before you jump into a global business expansion, you first need to set clear company goals. This will give you and your teams direction and purpose for the short, mid, and long term. This will help you drive—and scale—your business in a sustainable manner. 

Setting company-wide goals will help you to understand where global expansion fits into your company vision and which goals it can help you achieve. It’ll also help you prioritise certain aspects of global expansion, set aside an appropriate budget, and give you a clearer timeframe for when you need to achieve each step in the expansion process.

When setting goals, consider what the main aim(s) of your global expansion should be. For example, your global expansion plans may be led by factors such as:

• Widening your talent pool to build a diverse team and source niche skills
• Expanding your business into a lucrative new foreign market
• Proving economic stability for your business by diversifying multiple markets
• Improving risk management and resilience
• Saving money by moving operations abroad into a different country
• Building a globally recognized brand or improving your existing reputation
  

Each of these potential drivers for expansion into a new global market will result in very different goals that you would need to set and plan.

To help you set achievable company goals, there are many frameworks you can use, such as OKRs (Objectives & Key Results) or WIGs (Widely Important Goals). But whichever framework you use, your goals should be S.M.A.R.T.:

• Specific
• Measurable
• Attainable
• Realistic
• Time-bound
  

2. Do Thorough Market Research

Once you’ve set company goals and understand where global expansion fits into them, you need to carry out thorough research into the markets you wish to enter. Global market entry research will help you identify opportunities and obstacles before you start spending money to execute your global strategy.

When done well, market research can help you maximise profitability, decrease risk, and reassure stakeholders and investors that your global expansion plans are substantiated. 

Here are just some of the questions you should answer before entering a new foreign market:

• Is there a demand for your product or service?
• What are the purchasing habits of people in the foreign market?
• What is the country’s (or region’s) purchasing power? What is their GDP per capita?
• What is the total addressable market (TAM)?
• What is the total serviceable addressable market (SAM)?⁵
• What’s the socio-political and cultural landscape like? Is it ready for a product like yours?
• How can you adjust your product or service to ensure it’s welcomed and wanted in the new market?
• Who are your competitors, and can your product or service offer something new?
• How will the local laws and regulations affect your expansion plans? Can you overcome these barriers?
• Is there someone you can partner with locally to assist with complying with the region’s customs, preferences, and regulatory standards?
• Will you need to invest in localisation to make your product or service successful in the new market?
• What kinds of global talent are readily available in the target country? For example, does the country produce high-quality academics, leaders in a specific industry, or an abundance of tech talent?
  

There are many tools you can use to help make researching target markets easier, such as country-specific databases like the OECD. Once completed, you should have a better idea of which markets to prioritise in your local market entry and global expansion strategy.

While the end goal may be to expand into dozens of countries across all continents, it’s best to stick with a select few high-priority, low-risk markets to begin with. You could start by expanding into Europe or another strategic area like Southeast Asia, for example.

This expansion method will allow you to test out your global strategy in a new international market and make any necessary adjustments before investing money and resources.

3. Evaluate the Different Types of Global Expansion Strategies Available & Choose Wisely

There are many methods to expanding business globally, but what works for one company may not work for yours. Use your market research, company goals, and budget to determine which international expansion strategy is right for your company. 

The main types of expansion strategies are:

• Exporting goods or services
• Licensing & franchising
• Forming strategic partnerships and alliances
• Acquiring or merging with foreign businesses
• Setting up wholly owned foreign subsidiaries abroad (also known as ‘Green-Field’ venture)⁶
  

Each market expansion strategy has pros and cons. For example, licensing is fairly inexpensive and allows your business to expand rapidly in a different market, but it can lead to a loss of control over quality, messaging, and reputation.

On the other hand, ‘Green-Field’ investments allow your business to remain in full control of operations, but it’s an expensive and complex process from start to finish.

Which Option Should You Use to Expand Internationally?

Choosing the right business expansion strategy when entering an international market depends on your timescale, budget, and goals. Global expansion isn’t just for big corporations anymore—more and more startups and small businesses choose to expand overseas—but the size of the company will likely determine the type of expansion strategy you opt for. 

For enterprise companies with an expansive budget and plenty of resources, acquisition or Green-Field efforts may be the most attractive option, for example.

However, for start-ups and SMEs with a lower budget, partnerships, licensing, and exportation may be more cost-effective methods of global expansion that allow you to get your foot in the door.

At Omnipresent, for example, we use a mixture of owned entities and strategic partnerships to carry out our own global expansion strategy. Our two main reasons for expanding internationally are:

1. To hire a global workforce
2. To build a network of entities and local expertise to be able to offer the very best service to our clients.
   

To achieve these goals, we’ve adopted a thorough and multi-faceted approach to global expansion. Here’s a brief overview of what we do:

• Conduct research on local regulations all over the globe.
• Analyse client demand and growth patterns.
• Research the complexity of setting up and acquiring the proper licences to be fully compliant.
• Evaluate internal expertise to determine which markets we should prioritise and how aggressive we should be.
• Set up local entities in viable markets.
• Partner with trusted local service providers to harness their expertise and resources.
• Build a world-class team by remote hiring from across the globe (with partnerships in 160 countries) using our own product and EOR solution.
  

4. Hone in on Cultural Sensitivity and Localisation

One of the primary complications of globalisation is that it may alter a geographic area’s unique culture, appearance, and ethos. These situations occur when companies like Starbucks and McDonalds arrive in historical small towns. When these large companies enter a new foreign market, they may edge out smaller, local businesses or transform a region’s cultural identity.

If the market’s landscape changes this way and products lose their authenticity or identity associations, it is referred to as ‘product homogenization.⁷

To this end, it’s vital to practise cultural awareness and sensitivity—a task that can be managed with the assistance of a local consultant who’s well-versed in the area’s language, customs, cultural norms, and preferences. 

Further, it’s important to recognise that some geographical regions beyond the borders of your home country or nation may be composed of multiple ethnic, racial, and cultural groups.⁸ It’s crucial to understand how these groups interact with each other and how well each will receive your product or service and overall presence.

To account for cultural sensitivity and localisation, you may want to incorporate the following considerations into your global expansion strategy.

Familiarise Yourself with Local Business Etiquette

It’s one thing to get a handle on a country or nation’s language, cultural norms, general perspectives, and chief customs. It’s yet another to also grasp the area’s standard business etiquette. To do so, you may want to research (yes, a global expansion strategy, once again, requires a significant amount of research!) the region’s social and political climate, its demographics, its unique gender roles, its spirituality, and both its recent past and current events. Further, what is the area’s status on remote work? How do both business leaders and employees tend to communicate—in person or digitally? And what is the region’s preferred (and expected) level of customer service?

Practise Active Listening Communication Styles

Naturally, being fluent in a new country’s language would be a boon for your global expansion strategy. However, fluency isn’t always possible. Most expanding businesses work with an interpreter, but it’s also critical to practise active listening and observing to pick up on the nuances of speech and nonverbal behaviour in your desired foreign market. Doing so helps set the stage for stronger, longer-lasting relationships with local leaders, workers, and customers. 

Understand the Region’s Perception of Time

Punctuality is of utmost importance in some parts of the world; Denmark, Switzerland, Japan, and Germany are just four countries that expect it.⁹ In other places, such as Nigeria, India, Brazil, Mexico, and Turkey, flexibility reigns.¹⁰ Understanding this from the get-go can help you diminish upset and disappointment for all parties involved. 

5. Hire the Best Local Talent

Hiring global talent can make expansion simpler and more cost-effective, especially if the target market is very different culturally and linguistically from your existing markets. Having staff on the ground helps you to:

• Tap into local expert talent.
• Gain first-hand knowledge of the market and local culture.
• Benefit from local language skills.
• Save money by not having to travel as much or relocate existing staff.
• Ensure your current leaders maintain business success in your home country.
• Gain trust in the local market by building on existing relationships.
• Leverage existing business contacts and networks.
  

If you’re worried about the costs of hiring a lot of new talent, don’t! You don’t need to hire a fully fledged team in each new market to reap the rewards. Think strategically:

• Do you want customer support staff available in the local time zone?
• Do you need sales representatives who can speak the local lingo?
• Would you benefit from project managers who have strong existing relationships with local service providers?
  

Every business has different needs, so evaluate what local talent would benefit your global expansion strategy the most.

How to Hire Local Talent

Hiring remote employees abroad may seem daunting. After all, setting up a local entity in each new market can be time-consuming and requires a sound knowledge of local regulations for compliance. You may be tempted to hire independent contractors instead, but that can be risky, too.

The simplest solution is to partner with an Employer of Record (EOR) service, like Omnipresent, which employs staff on your behalf and handles all the associated administration for you when undergoing an overseas expansion. Using an EOR is faster and less risky than employing international talent directly, and it’ll make the global expansion process much smoother as a result.

6. Select Local Partners Carefully

Even with employees based in your target market, you’ll likely need to work with local partners in some capacity. For example, you may need third-party logistics partners, legal advisors, or marketing & PR agencies to execute your international expansion strategy successfully.

But before signing any contracts, be sure to create a company due diligence protocol. Here’s what to look for in a reliable global expansion company partner:

• An impressive portfolio of existing clients mirroring your own business
• Positive references from those clients
• A competitive quote for their services
• Timely and considerate customer support
  

You may even consider implementing a trial period with your chosen partners to assess how well they work with your business before committing to a long-term relationship.

7. Monitoring and Adapting Strategy Post-Launch

Now’s the time to launch your product in the new market and get your message out to your target audience! First impressions matter, so you’ll want to leverage your market research to ensure your launch efforts and associated marketing align with your target audience.

For example, prioritise relevant marketing channels to create a stir, choosing to add localised advertising campaigns, dedicated social media accounts, local media coverage, special events, and more within your marketing strategy based upon audience preferences.

Once launched, you should continually monitor progress and adapt your overseas expansion strategy as appropriate. By seeking regular feedback from local customers, you’ll have a better understanding of the target market and what you need to improve to meet their specific needs.

In particular, monitor the following key performance indicators (KPIs)¹¹:

• Brand awareness – How well or commonly do consumers in your target market know your brand?
  

• Product adoption – How well do consumers know your product, and how often do customers use it?
  

• Traditional sales metrics – How effective are your sales processes? Leads, conversions, and other traditional sales metrics still provide considerable value when monitoring product and personnel performance.
  

• Monthly recurring revenue (MRR) and annually recurring revenue (ARR) – Accurate financial records enable businesses to gather granular insight, produce reports, and form projections used to demonstrate growth or secure additional funding.
  

• Market share – Identifying how much market share you hold and how much remains available will help determine growth projections and new strategies to achieve more than your competitors.
  

Some of these metrics will be easy to collect and analyse with the appropriate technology platform. Others may be difficult or require adjusting for your specific market and industry.

For example, a Customer Relationship Management (CRM) system will provide extensive reporting on leads, conversions, and lost deals that sales and marketing teams can use to refine their approaches. However, other metrics like brand awareness may require partnering with an expert to perform a survey or another assessment that collects data directly from your audience.

Continually assessing the success of your initial global expansion strategies will help guide any subsequent market expansion plans you may have. That way, your business can continue to grow sustainably and you can enjoy the many benefits of globalisation while mitigating risk as much as possible.

8. Embrace Technology and Digital Tools

Technology plays a vital role in global business expansion. Indeed, leveraging the latest tools may help you:

• Enrich collaboration and communication (across geographic borders) – There are dozens of indispensable tools to ensure that communication for your geographically dispersed teams and customers is smooth, speedy, and efficient. These include video conferencing technology (such as Zoom and FaceTime), instant messaging platforms, project management software, and the use of AI in customer service. 
  

• Streamline business operations – Data analytics and automation software may reduce the need for manual, repetitive tasks and optimise operations overall. For instance, supply chain management software may uncover new efficiencies in how your company handles logistics, monitors inventory, and guarantees the prompt delivery of goods to consumers globally. 
  

• Enhance market research and insights – Knowing the foreign market you’re entering is key to your international expansion strategy’s success. Technology will be crucial when conducting your research. Data analytics, social media, online surveys, and more can help your organisation collect invaluable information on the market and consumer habits.