- October 6, 2019
- Posted by: admin
- Category: Economics, International, International markets, investment, market research, Marketing
Every one of us as a business owner dreams to grow his business and going globally. Also we do our best in the marketing field to accomplish our dream. But is this enough? No, because you should know some information about the country you will export to before starting the marketing efforts. In the research field we call it PESTEL Analysis as it stands for Political, Environmental, Social, Technological, Economical and Legal contexts.So, here are 6 things you should know before going globally.
going globally 6 Things you should know before
1. Political Context
Refers to information about the political system prevails. Besides information about whether the country encourages foreign investment. Also, any political issues if existed.
2. Environmental Context
It includes location of the country and the bounded countries. Information about the capital city and the biggest cities and the country’s provinces. As well as the country’s climate and its natural resources. Also it should include information about its total area and its flag.
3. Social Context
This context contains demographic information about the country’s population such as birth rate, population density, age, education, language and households’ sizes. Besides information about religion groups, attitude toward foreign products and specific characteristic of the country’s population.
4. Technological Context
Refer to the level of the country’s technological capabilities. It affects the effectiveness of conducting business. Also, it affects business relations.
5. Economic context
This context contains information about country’s currency, GDP, poverty, investment conditions and wealth rates.
6. Legal context
Regulation related to international business including trade regulations and regulatory compliance.
Importance of Going Globally
When the domestic market are almost full of similar products and substitutes the only way to increase sales are going globally. It will not just increase sales but also will increase brand awareness.
Some countries in the developing world have cheap labor force such as Egypt, India, Brazil & Tanzania and going globally will decrease the production cost. Hence increase efficiency for labor intensive production industries.
Transportation cost reduction
One of the important reasons why to go globally is to be close to customers in the external markets which will definitely decrease the transportation cost.
This will not just affect profit directly but also will make the company respond to customers’ demands quickly.
Incentives for investment
Some countries offer investment incentives such as Egypt to encourage foreign investors to invest in the country. These investment incentives may be tax reduction or exemption, lower tariffs for raw material or any other incentives.
Preceding competitors when going globally
When the company is the first to the market before competitors it capture significant market share. Besides it builds brand awareness. Also, it gets customers’ trust.
After all international business always holds opportunities as well as risks and hence it come our role. We can help you navigate smoothly throw these risks and catch those opportunities. So, if you have an idea or already you entered international markets and need some support contact us and we will do our best to help you. 🙂