The internationalization of companies

• The internationalization of a company is a process with which an organization operates in a foreign market
• This process is increasingly common among Spanish SMEs

What is the internationalization of companies?

The internationalization of a company is a process with which an organization operates in a foreign market and is increasingly common among SMEs, in a world of economic globalization.

To this end, resources are strategically arranged with the aim of taking advantage of the opportunities and situations of the different world markets.

Companies that want to internationalize must meet certain prerequisites, aimed at an in-depth analysis of their global operational capacity. SWOT analyses, the creation of a specific department, determining the new international business objectives, studying the current situation and future financial needs, or creating the commercial strategy for new markets are, among others, some of the necessary preliminary tasks. .

Types of strategies

Bearing in mind that both direct and indirect sales in markets other than the local are considered internationalization, there are various situations:

• Sell to local customers for them to export the products
• Export products through intermediaries
• Sell to local representatives of foreign customers
• Export directly and on your own behalf

Depending on each of the above operational situations, different internationalization strategies will be necessary:

• Multinational strategy, used by multinational companies that have subsidiaries in other countries
• Transnational strategy, applied to companies that have a parent company and, from this, have been expanding with new ones to different countries
• Global strategy, with each country in which a company works is a segment of a global market

Benefits of internationalization

Its main benefits are:

• further company growth
• increased customers and revenue
• consolidation of the product or service and the brand
• cost savings
• improvement of risk management
• growth of motivation among employees

drawbacks

It is not easy for a company to open up to new markets and this situation requires a high volume of information and data on the specific market, taking into account economic, cultural, political or social factors, among others.

In addition, each market will have its times and particularities, starting with the different legal or regulatory frameworks to be able to operate in each country.

In summary, the internationalization process requires a high level of specialized work and a long-term temporal scope.