In the current economic climate, some companies expand abroad while others consolidate locally. Let’examineat each option and determine what is best for your company.
Expansion
Expanding internationally is a good idea if you can afford it and are willing to deal with the risk of doing business in a new country.
An example of this strategy would be McDonald’s, which has experienced substantial growth in emerging markets such as China, India, and Brazil over the past decade. In addition to taking advantage of these booming economies, McDonald’s has expanded its menu offerings with traditional local flavours such as shrimp burger sandwiches for Chinese consumers or spicy chicken burgers for Indian consumers.
Benefits:
- Localisation – By offering local products and services tailored for each market segment (i.e., breakfast options, including French toast sticks instead of pancakes), companies build brand loyalty among customers who trust their taste buds more than they trust advertising messages from multinational corporations like Coca-Cola or PepsiCo.
- Cost savings – You can save on production costs by outsourcing some aspects of your business abroad (for example, manufacturing food products) because labour costs tend to be lower overseas than locally; you’ll also save on shipping costs since freight companies usually offer special rates when sending cargo to foreign countries; finally, there may be less competition within those countries so getting into a new market might be easier than trying something similar here at home.”
Consolidation
Many companies are looking to consolidate their operations and reduce overhead costs in the current economic climate. Localisation is one-way companies can do this by adapting a product or service to a specific country or region. For example, localisation can be done by modifying a product or service’s language, currency, and other aspects.
Economic climate
The current economic climate is not great, but it’s an excellent time to be a business owner. As the economy continues to improve, companies will have to make tough decisions about expanding abroad or consolidating domestically. The company you choose may depend on your long-term goals and how much risk you’re willing to take on.
You may also want to consider what kind of industry you’re in. If your industry is constantly expanding, it makes sense for you to expand internationally. For example, many tech companies are continually seeking out new markets to grow their revenue stream and customer base—these days, most technology can be used anywhere in the world with an internet connection!
On the other hand, if your business only serves one market—for example, if yours is a local restaurant chain—there might be no need for expansion because customers already know about its services here at home.”
Some companies are choosing to expand abroad others are choosing to consolidate locally.
For some companies, expanding abroad is the best way to grow. As a result, they may seek new markets with increasing demand for their products or services.
For others, consolidating locally is the best choice. They may seek to expand their operations within a country with high domestic demand levels.
In either scenario, you must make an informed decision based on your company’s specific needs and goals before deciding whether or not you should expand internationally or consolidate domestically.
Bottom Line
I hope I’ve given you insight into how companies make international expansion and consolidation decisions. Interestingly, many companies prefer expanding abroad, while others prefer consolidation locally. This is likely due to the changing economic climate and what investors expect from their investments.
Who am I?
I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth.
I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 30 years.
Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, ensure business continuity and achieve a legacy.
Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com.
