Wait for the world or go looking for it?
His company has dominated a local market, makes reasonable profits and grows twice the economy of the country. It has a good reputation and the economic environment seems stable, firm to move forward with the company. Everything is running smoothly and it looks like it can take business "on autopilot" on a fully controlled track. !Error!
The world changes, new competitors can arrive with lightning speed and events in other economies can spread like a computer virus. A single technological discovery can disrupt the market, derail customer loyalty, or revolutionize processes. The world can come to your doorstep even if you don't want to, even if you haven't wanted to go looking for the world before.
So never rule out internationalization. This is what Professor Esteban Brenes, an experienced consultant and professor of INCAE Business School, provided that the necessary questions and assessments are raised in a responsible manner beforehand. If it is clear that comparative advantages (between countries) are increasingly diluted and competitive advantages weigh more, the idea of going out and looking for the world is not a bad thing, mentioned in the webinar "Internationalization Strategies" the Academic Director of the Executive MBA and Senior Management Program - PAG.
The reasons for internationalization can be several, starting with the simplest and perhaps the least correct: reputation. Then there may be motivations for growth, for opening a new segment, for a narrowing of competition in the original environment, or for a deterioration of the market. In the end, internationalization can be a great way to grow with a long-term perspective, which results in consolidating leadership, retention of the best human talent and greater value creation for shareholders.
Well managed, internationalization can bring you certain benefits, but it can also save you troubles that are rarely seen when all is well in the local control zone. It can function as insurance against possible deterioration in the local market or against the increasingly common turbulence in the business world of the XNUMXst century.
“It cannot be ignored that markets are increasingly globalized and niches are expanding across borders, thanks to digital communications,” adds Brenes. This opens up valuable spaces for growth and is well known to new business players such as Airbnb or Amazon, who with great agility reached audiences with similar habits regardless of which country they live in.
Of course, technologies expand the margins of internationalization, in addition to better access to financial and human resources, and a better positioning of Latin American economies, among other factors.
Before you have to ask yourself key questions suggested by the teacher: Is my business model transplantable? What adjustments should I make? (I hope they are the least possible). Do I have the resources? Does being in a country strengthen my advantage? Anyway: Is this the best use I can make of my capital?
Then the comparative advantages should be considered (depending on the country where it operates), institutional (dependent on government benefits such as exemptions or subsidies) and the most important: the competitive ones (directly related to the capabilities of your business versus those of others).
Later, it will be necessary to see how to conquer those markets, whether through commercialization, alliance contracts or direct investment, but this corresponds to an advanced stage of the process. By that time it will be known since the bet of Going international will always bring dynamism, will promote the strengthening of the organization's skills and will take advantage of the possibilities of exchanging knowledge and experiences between the venues. Maybe even the exchange rate will reward you.