If you can't fight globalization, join it!

05 July 2017
Executive Education INCAE

Your company can be the queen of the local market, take the pulse of consumers and know how to lead them towards innovative products that your team develops to remain a leader in a given region. 

It can be very profitable and give you as an owner, officer or manager a lot of satisfaction; enough to rule out the idea of ​​going across borders to fight much riskier battles. 

Can leave the word "Internationalization" out of the everyday dictionary because, after all, no one is packing suitcases and everything works fine like that. ERROR!, experts say.

To begin with, the fact that you have even considered the possibility of going out and looking for other markets or partners abroad is already a global way of thinking.

To follow, you don't have to go looking for globalization around the world. She will come to him sooner or later at the doors of your company or, rather, at the doors of your customers and suppliers and you will want to snatch a portion of that market that you think is so dominated. 

And for more reasons, it will always be positive to have a path to the outside in sight, be it to grow the business, to diversify it or eventually reduce risk margins.

"No one escapes the need to present the business to the world and we are always going to face international competition," says expert Nicolás Kfury, professors of the program. Internationalization Strategies, from INCAE Business School.

Kfury recommends digging deeper into the various roadmaps for thinking globally and offers four reasons for this, notes the professor:

- Deregulation of the markets, which opens the possibilities of access to other markets with formats such as free trade agreements (FTA). This puts local businesses more exposed. If not, let Mexico say so. 

- Technological developments They facilitate communications and execution of strategies for the operation of the company across borders, with business units or subsidiaries scattered around the world.

- The processes of economic integration By regions they open wide paths linked to the deregulation of markets.

- There is a homogenization of consumer preferences, with similar behavior patterns between distant countries and some brands use it. 

Basic questions

Beyond the polarized differences between theorists -on the one hand, those who consider that the planet is a single market and on the other, those who believe that the local character of some products or services still has preponderance-, the unquestionable thing is the greater international exposure of companies and the need to have a strategy to take advantage of it or to discard it with sufficient arguments.

“The great challenge is to identify the right model for the objectives of each company. There is no single way to stop globalization”Adds Professor Kfury.

Thinking globally does not always indicate that we should embark on an adventure in the style of Marco Polo, but it is worth knowing the opportunities offered by an economy of scale, the chances of reducing risks through the diversification of target audiences and also, of course, the existence threats that have also become globalized and that in these times can also be the object of rapid contagion. 

That is why it is convenient to have an answer to three very basic questions: Why do I want to internationalize? What type of organization would I need? And how should that process be managed? The solutions are not in any manual. They depend on the line of business and especially the situation, but there are potential benefits.

The use of installed capacity, access to resources at a lower price and the learning curve with some profitable elements on the cost side.

If talking about learning opportunities, there are also revenues from the stimulus to innovate, diversify and adapt products or services to other contexts.

And if we look at the network, there are also eventual fruits of being able to participate in an international network, approach cross-border customer bases and capitalize on the value of a brand whose local success transcends other countries and ends up being the spark of an expansion process .

Internationalization Strategies

This program will not only give you the tools for the design and execution of global strategies that make your company competitive at a regional level, it will also allow you to know and understand your environment to defend yourself in the local market from companies that enter your country.

Next edition: 7 of August, 2017.

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