Internationalisation of SMEs: A universe of opportunities at your fingertips
In an increasingly globalised world, SMEs face the challenge of expanding into new markets to continue to grow and compete. Internationalisation presents an opportunity to diversify your customer base, increase your sales and strengthen your brand. In this article, we will explore the benefits and challenges of internationalisation and provide you with tips and strategies for taking your first steps abroad.
According to ICEX data from 2022, 68% of Spanish SMEs exported, representing a growth of 10% over the previous year. SME exports accounted for 23% of total Spanish exports in 2022.
Why internationalise your business?
There are many reasons to internationalise your SME. Among the most important, we can highlight that the world is full of opportunities for your products or services. If you are looking to expand your business, you need access to new markets to discover new possibilities. By going international, you will be able to reach new customers in countries with high growth potential, which will also allow you to diversify your risk by not relying on a single market. Remember that relying on a single market can be dangerous, so internationalisation allows you to diversify your customer base and reduce your dependence on a single market, which protects you from economic fluctuations and gives you greater stability.
Benefits and Challenges
Benefits
- Increased sales and profitability: Internationalisation opens doors to new markets and customers, which can result in a significant increase in sales and ultimately higher profitability for the company.
- Risk diversification: Relying solely on one market can be risky, as any economic fluctuation or change in market trends can severely affect the company. Internationalisation allows diversification of that risk by operating in multiple markets, which provides greater long-term stability.
- Brand building: Entering new markets and offering quality products or services can help strengthen brand reputation and recognition internationally. This can lead to greater consumer confidence and a stronger position in the global marketplace.
- Access to new markets, knowledge and technologies: Internationalisation provides the opportunity to access emerging markets with high growth potential, as well as innovative knowledge and technologies that can drive the company’s development and innovation.
- Increased competitiveness: By expanding into new markets, companies can increase their competitiveness by facing new challenges and adapting to different business environments. This can drive continuous improvement and innovation within the company.
Challenges
- Costs associated with internationalisation: International expansion entails a number of costs, including those related to logistics, marketing, product or service adaptation and compliance with local regulations. These costs can be a significant challenge for SMEs with limited resources.
- Difficulties adapting to new markets and cultures: Each market has its own rules, regulations, preferences and business culture. Adapting to these differences can be complicated and requires a deep understanding of the target market and the ability to adapt quickly.
- Legal and regulatory barriers: Internationalisation can be hampered by legal and regulatory barriers in foreign markets, which may include tariffs, taxes, import restrictions, certification requirements and country-specific regulations. Overcoming these barriers may require time, resources and specialist legal advice.
- Need for skilled staff: Managing international operations requires a skilled and experienced team with expertise in international trade, logistics, global marketing, cross-cultural management and international compliance. Recruiting and retaining these skilled personnel can be a challenge for SMEs.
Tips and Strategies to Internationalise your Company
If you are considering internationalising your SME, here are some tips that can help you take your first steps:
- Define a strategic plan. Before you begin, it is important to establish criteria for the effectiveness of your goals. You can do this by using methodologies such as SMART and SWOT to develop a strategic plan that includes your short-, medium- and long-term objectives, the markets you want to enter, the marketing strategy you will follow and the resources you need.
- Market research. It is essential to thoroughly research the markets you want to enter. This will allow you to learn about trends, competition and consumer needs.
- Adapting the product or service. You may need to adapt your product or service to the needs and preferences of consumers in new markets.
- Ways of entering new markets. There are different ways to enter a new market, such as exporting, direct investment or franchising. Choose the one that best suits your needs and resources.
- Support resources. There are numerous organisations that can help you internationalise your SME. Find out about the grants and subsidies available in Spain.
One of the most complicated aspects of internationalising your business is the logistical process of shipping, exporting and importing, as well as the distribution of your products. Fortunately, there are now a number of options that can help make this crucial part of the process easier. At LetMeShip, we offer you the possibility to simplify the logistics of your shipments through our platform.
Small and medium-sized companies looking to expand and compete in the global marketplace can find great opportunity in internationalisation, as evidenced by data on the relevance and development of Spanish companies. However, while we recognise that many of the challenges involved in internationalisation can seem daunting, it is crucial to plan carefully and have the necessary resources in place to achieve your real goals. Always remember to take advantage of the support that technology offers us today, as well as using shipping platforms such as LetMeShip to organise, streamline and facilitate the logistics of your shipments completely.
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