The 7 Traditional Paths To International Business Development

So you want to make your business international?

Traditionally there are 7 different options open to you. Each path has advantages and disadvantages.

Businesses just starting their business development abroad will need to study these options very carefully.

Online businesses starting to develop a regular international client base will also find it very interesting to look at the traditional business development strategies. You never know where your international internet business can lead you.

Here are your international business expansion options.

1 - Sell Directly To Your Foreign Clients From Your Home Offices

The advantages are:

• No expensive foreign offices
• No foreign taxes
• You retain full control of your international strategy

The disadvantages are:

• More difficult to penetrate foreign markets
• More cross cultural communication issues
• No local expertise in-house
• You handle all sales issues that arise
• Full responsibility in the event of legal issues

2 - Open A Local Office To Represent Your Business

The advantages are:

• Local presence
• You retain full control of your international strategy

The Disadvantages are:

• Full responsibility in the event of legal issues
• Need tax advice on how to set up finances
• Local taxes due
• Financial results not fully integrated with main company

3 - Create An Overseas Subsidiary

The advantages are:

• Local presence
• You control your sales strategy

The Disadvantages are:

• Expensive solution
• Separate company structure has financial, fiscal and legal repercussions to be researched fully

4 - Hire A Sales Agent To Sell To Foreign Markets

The advantages are:

• Local presence
• Local expertise
• You control your sales strategy
• This is usually a cheaper option than going through a distributor

The Disadvantages are:

• Research needed for legal and taxation issues
• May cost you a fee to terminate agreement

5 - Find A Foreign Distributor

The advantages are:

• Local presence
• Local expertise
• Sales network in place
• No expensive foreign offices
• No local taxes
• Distributor is usually responsible for local legal issues

The Disadvantages are:

• You lose control over your sales strategy
• Distributors are generally more expensive than sales agents
• To end a distributor agreement you need to give notice

6 - Develop A Franchise Overseas

The advantages are:

• Local presence
• Local expertise
• Benefit from franchiser investments

The Disadvantages are:

• Not always an option
• Strict legislation sometimes

7 - Enter Into A Joint-Venture

The advantages are:

• Local presence
• Local expertise
• Possibility of mutual benefit if a good fit
• Each partner keeps the ownership his side of the Joint-Venture
• Flexible structure

The Disadvantages are:

• Need to research the legal responsibilities and implications involved
• Opens your intellectual property to risk

Research Your Options

This list gives you a quick glance at the different international development options and their advantages and disadvantages.

This list is by no means complete. There are many parameters involved. You will need to do your own research and contact the authorities involved.

But this list is interesting for the online businesses starting to get international sales. It is a reminder of how your business could evolve, of the directions you could take your business.

You might find the ideal distributor or sales agent for your products and services one day. This is just a reminder of your other options.

International internet marketing allows businesses to enter into international business development one step earlier.

Internet business does not exclude any of these traditional international development options.

An international internet marketing strategy can be a very good international market research tool leading towards more traditional international expansion methods.

Download this Cross-Cultural Communication Tool
powered by translate.google.com