There are many factors to consider when deciding whether to take all, or a portion of your business, global. The world is more interconnected than ever before, and only shows signs of becoming more so as time moves on. Because of this, there are many opportunities awaiting the skillful entrepreneur. However, there are also many pitfalls to be aware of -- so be able to navigate the waters, if you plan on going global.
The standing of your national currency is a major factor to consider when deciding whether to take your business global. Depending on the level your currency is trading at, on currency markets, your product will either be priced higher, or lower, in other currencies. A strong home currency can be a disadvantage, since your products will cost more in other markets.
"Comparative advantage" is a standard doctrine, justifying free trade, in classical economics. In this doctrine, tasks a country is uniquely suited to, will be those it specializes in when trading with other countries. In this way, the most efficient economy is generated globally. You should consider when going global, whether your company possesses a comparative advantage in the unique product that it creates, versus competitors elsewhere in the world.
Of course the major reason for going global is to expand your customer base. When considering whether you'll go global with your company, you should consider if there is, indeed, a larger market waiting for your product in other countries. A major 'pro' of going global is finding a market for a product that doesn't exist in your own country. Going global increases your options.
By opening your business up to a global community, you'll also be opening it up to increased competition at a global level. This competition will help your business become more efficient and capable of adjusting to changes. However, it may also lead to your business being outmaneuvered by more adept companies and beaten out for business. Any business going global should consider if it's ready to compete.
- New York Times: An Eye on Growth, Deals Stretch Across the Pacific
- New York Times: Tips for Increasing Sales in International Markets
- New York Times: Weak Dollar Has Small Businesses Thinking Globally
- Business Week: Where Businesses Expect High Profit Growth in 2010
- Economist: Global trade- what's not to like?
- Economist: Global trade is slowing
- global stamps image by jesse welter from Fotolia.com