There are 213 million companies globally, and many of these establishments operate in more than one country. Indeed, the ease of doing business across different geographic regions is met with several challenges. So, what makes it possible for some businesses to operate in different countries successfully while others don't? Below is a discussion on some crucial factors that may hinder your business survival abroad.
Human resources or hiring issues
Another vital challenge accompanying the expansion of a business abroad is human resources. When taking your business global, there is the need to create an essential human resource. There are two options to explore here. The first is to send some of your existing human resources to the new country. The second is to hire new human resources from scratch. The problem here is that when you choose the first option, you will have to make up for the vacancies created in the home country. On the other hand, hiring from scratch in a new country automatically increases operating costs. In many instances, some companies prefer to do a little bit of both until the business picks up in the new market. Indeed, either way, some risks should be taken.
Foreign policy nuances
Every country operates under the laws of the country it exists in. This is often influenced by politics and policies. Unfortunately, it is not always a smooth ride when one business is penetrating another market abroad. The challenge may worsen when foreign relations between the two countries are strained.
It helps to know that labor laws, taxes and material costs may also be affected during the expansion stage. If the relationship is strained, the host country could make your business’s economic integration exceptionally difficult. In a worst-case scenario, you can be refused to set up in the first place. To avoid these inconveniences, you are responsible for researching the new market. Finding out more about the international trade ties between the two countries can spare you these inconveniences.
Language barriers
How does your business product or service communicate in the home country? If your language is French and you’re looking to expand into an English-speaking market, there may be challenges. It is essential to consider the dominant language spoken in the country you are expanding into. Without this, your business may struggle to be accepted there. According to language experts, a product’s message often gets lost in translation, which could be inimical to growth.
A classic example was the language challenge automobile giant Mercedes Benz faced during its initial attempt to penetrate the Chinese market. Their product message got lost in translation when they erroneously chose the Mandarin word, Bēnsǐ, to represent Benz. Unfortunately, this translation was disastrous as the English meaning is ‘death rush’. Finally, they corrected the error and chose another Mandarin word, Bēnchí, - meaning to run quickly. Using this example as a guideline, it is helpful to choose a translation agency UK service when penetrating another market outside the home region.
Business expansion and market penetration are complex processes you cannot overlook when setting up abroad. Due to this, you may want to tread cautiously and increase your chances of getting it right from the onset.