Globalization has become a widespread phenomenon in the business sector around the world. Brands are investing in their global expansion strategies to increase their user base and earn more revenues. However, capturing the global marketplace is not an easy nut to crack. First of all, you have to gain the foundational knowledge and right expertise to develop a robust global expansion strategy.
There are different ways to approach your brand expansion strategy based on your core objectives and growth goals. It is also important to know how many types of global expansion strategies there are. Your strategy should clearly define the methods, tools, and approaches you will be used to for your brand globalization. For instance, choosing the right cloud based localization management system for your translation project management should be defined in your global expansion strategies. In this article, we’ll look at different global expansion strategies that brands can adopt.
Global Expansion Strategy – Overview
Global expansion strategy is an actionable plan that companies develop to effectively expand their business’s operations from the domestic market to other foreign marketplaces. Companies have to be really careful while growing outside their domestic markets. Considering the language, culture, and social norms of the foreign markets, companies have to develop robust globalization strategies accordingly.
Global expansion, if done right, opens up new opportunities to earn more profits and increase sales. It also helps companies enhance their reputation in the global marketplace. Before moving your brand internationally, you must clearly define your growth objectives and long-term mission. Doing this would help you create a strategy aligned with your business growth goals.
Types of Global Expansion Strategies
To make your local brand work well in the international market, you have to conduct comprehensive research and come up with the right global expansion strategy. Global marketplaces are full of challenges and risks, so you must carefully define your objectives and work towards your goals through an effective global strategy. Here are the four key ways to approach your global expansion strategy.
In a multi-domestic global expansion strategy, companies adapt their brand to local cultures and customers’ preferences. To make your products and services more competitive in the target market, you have to make them resonate with local tastes and interests. In this sort of market, you deal with a different version of the same product outside your domestic market. Doing this would enhance the profitability of your product and make it perform well in different markets.
For the localization of your brand, you can use a cloud based localization management system that would help you with your brand localization and translation project management. When you are working on different product versions and making modifications to your brand’s attributes, it’s going to be expensive. However, the prices of your product will remain unchanged for every market. There are different brands operating in multiple markets, such as PepsiCo and Lays.
This global expansion strategy is totally different from the multi-domestic market strategy. It focuses on creating more cost-effective operations globally by minimizing regional and domestic product variations. Instead of creating different versions of products and services for different markets, it focuses on making one global version of the brand for every market. Companies use this approach to keep the cost as low as possible and provide their products and services at relatively lower prices than other competitors in the market.
By offering the best prices with good value, companies try to capture the maximum market share. Coca-Cola is the best example of an international brand using a global strategy. Coke may advertise, market, and package its brand differently in each market, but the product tastes the same everywhere.
In the international expansion strategy, you enter a new marketplace without changing your product’s attributes or pricing. From branding and packing to overall functionalities, your product will remain unchanged for all markets. Regardless of competitors’ pricing strategies and product features, you will find no significant changes in the product’s appearance, functions, design, and prices. For instance, popular makeup brands keep their makeup products unchanged for all markets. International brands with good reputations don’t like to change their appearance and attributes while catering to foreign audiences. Rolex watches are also a classic example of keeping the product’s design the same for all markets.
So, if your brand falls into such a category when customers like to buy the same version of the product that they have seen on your website, then you better adopt this approach to enter a global marketplace.
If you want to enter a new market by providing a customized version of the product to people and keeping your cost minimal, a transnational strategy is the best choice here. This expansion strategy focuses on optimizing the product for local markets and effectively managing the processes to keep the cost minimal. If you are doing minor customization to your product instead of full localization, you can easily do it without adding any extra costs.
A good example of transnational strategy is KFC and Baskin Robbins. For instance, KFC has a totally different menu in Japan, France, and India based on local food preferences. Similarly, you may find different Baskin Robbins flavors in different countries; the brand gets a lot of inspiration from local taste preferences.