For many business owners, the domestic vs international dilemma is a tough one.
On the one hand, doing business on an international scale can be a challenging proposition. For starters, you’ll need to rethink your marketing strategy. Plus, you’ll have to learn all kinds of things about the country you’ll be going into.
That said, the international business environment is rife with opportunity. If you’re willing to put in the research, tapping into these markets is a great way to grow your business.
Not sure where to start? Here are the main points of difference between domestic and international business.
1. Level of Competition
As a general rule, the level of competition in a domestic market is less complex than what you’ll experience in a foreign market. How can you find out if you’ll be able to compete? Simple: use Porter’s Five Forces model.
This analyzing tool is a great way to determine the intensity of a particular industry. It lets you assess your buyer power, supplier power, the threat of competitor products, and so on.
2. Legal Systems
As you may imagine, no two countries have identical legal systems. Similarly, governments have their own policies on foreign products. Once you enter an international market, you must abide by their rules and regulations.
Unfortunately, some of these rules can have a negative impact on your business. That’s why you should always consult with legal counsel before exporting your products.
In a domestic business environment, advertising is the key to success. International markets are the same, but you have to be aware of the media your customers use to gain information.
Why is this important? Well, not everyone in your target market will be connected to the internet. In fact, not every potential customer may be able to read or write.
However, this doesn’t mean that you should ignore those markets. Instead, come up with a marketing strategy that makes use of the media at your disposal.
Before entering a foreign market, make sure you understand their culture.
Many societies are defined by their cultures, the evidence of which can be seen in everything they do. This includes business practices, sales negotiations, response to advertising, and so on.
Of course, your customers won’t expect you to make a deeper connection with their culture. Nonetheless, some respect and understanding will go a long way.
5. Market Intelligence
When developing a market entry strategy, it helps to be aware of your direct competition. This will allow you to gain a better understanding of how a particular industry works.
For some less-developed markets, this kind of data can be hard to find. In this respect, domestic business is quite a bit simpler than international business. Still, do your best to gather as much information as you can.
More on Domestic vs International Business
As you can see, the differences between domestic vs international are numerous. That said, all these differences — whether they’re legal, cultural or technical — can be overcome with enough determination.
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