We live in a global economy. Improved supply chains, the internet and international trade agreements make doing business overseas easier than ever. Foreign markets are no longer only the domain of large or enterprise businesses.
In the US, 97% of businesses that export goods fall into the SME category. Research by SCORE showed exporting small businesses were almost 10% less likely to go out of business. This was due to market diversification and increased stability.
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There are a number of value strategies that SMEs can use when going global:
Adaptation: this involves adjusting your product or service to the local market. To implement this strategy effectively your business must have detailed knowledge of the market you are trying to access and be agile enough to adapt your business model to meet this need.
Aggression: create regional or local operations that allow you to take advantage of economies of scale when it comes to the production of goods. As a strategy, this will enable your business to optimise costs and possibly see success in international markets as a result.
Arbitrage: exploit the differences between national and international markets to create opportunities to take advantage of independent parts of the supply chain on a global scale.
Intensity: going above and beyond what your competitors are doing. This may be difficult for many SMEs, but if you are in a particularly niche area, you may see success employing this strategy.
Value application: this is the means in which you provide value to your customers. For example, if you are a chain of bricks and mortar retail stores, could you make your product available globally by selling online? Brands like Herschel saw global success employing this value strategy as an SME.
A growing number of people in expat roles are employed by SMEs. By living and working overseas, they provide much more in-depth information about the local market, business practice and culture of the region. Expat employees may spot opportunities or roadblocks that may be difficult to see from head office. While establishing an office abroad, expat employees can instill the company culture and ensure customers receive the same level of service no matter where they live.
If your SME is considering sending employees overseas on assignment, protect their health and wellbeing while they are away with international health insurance. Get in touch today to discuss our expat health insurance products for SMEs.
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