Have you ever wondered about the true meaning of the word “Internationalization”?
In the dictionary, the word “internationalization” is defined as: “the process of adaptation of a company, a product, a brand, conceived and designed for a market or a defined environment, especially in other nations and cultures”. Basically, it is a process that leads companies, or groups of companies, to deal with similar systems in other regions.
The entrepreneurs of small and medium enterprises, are increasingly likely to implement an internationalization process that will help them to increase revenues, decrease costs through lower taxes, and acquire an international point of view.
Here, we identify the 5 steps of an internationalization strategy:
- The first step is to understand what the right “entry strategy” is for the foreign market, which may occur through direct or indirect export of a product / service; or through strategic alliances with local enterprises through joint ventures or commercial agreements, franchising and licensing (i.e. the transfer by the author or holder of a right to another entity that might use it, drawing from the economic benefits), this of course depends on the type of activity. Another opportunity is to invest directly abroad through mergers and acquisitions of companies abroad.
- Next, you need to understand how to introduce the product and the brand in the foreign country. It’s important to protect your brand, and you can do it in various ways with respect to the country you’ve chosen: for example, countries within the European Union can simply file an application for a Community Trademark managed by the Office for Harmonization in the Internal Market (OHIM). If outside the EU, such as Russia, the US, Japan and Vietnam, it is recommended you use the international company method with the World International Property Organization (WIPO). Instead if the country in which you want to export is outside of the Community Trademark System and / or the International Trademark, you should proceed with applications for international registrations.
- Of paramount importance is “market analysis, adaptation and control”. At this stage we analyze the behavior of the competitors on a national basis, we study the target market for the specific country. They will highlight the regulatory or market events that have changed the competitive scene or influenced it in the short to medium term. Then you have to keep in mind the general characteristics of the country, demographic factors, the lifestyle in the country where you export, the mass media and their use.
- One of the last steps is the signing of a “serious international contract” which, depending on the case, can consist of simple contracts for the sale of goods, agency or distribution, subcontracting, or more complex transactions such as license agreements, joint ventures, turnkey etc.
How to identify which country you should export to?
One thing to keep in mind to locate the country of export is the “compass rule”.
5. Many times, when you ask a small or medium business owner, why he wants to go in a particular country, the answer is “because my friend went there!” Or “because I like the country” and often They indicate very distant countries from where the original company is located. One way to decide whether this choice is the right fit though, is to follow the compass rule. If the company is small, then the compass opening for internationalization should aim to reach out to its closest neighbors; if the company is medium sized, the compass range can reaching a bit further out, if the company is a multinational the opening of the compass will reach worldwide!