Incorporating a strong internationalization strategy into localizing a product for market entry allows a company to have an expected overview for scaling in a global market to increase revenue. This tactic gives the overall strategy a better foundation for the company to continue introducing new products and maintaining profitability. Understanding what business factors contribute to an internationalization strategy can help you improve your chances of success in target markets.
What Is Internationalization?
Internationalization provides the framework for implementing a localization strategy that can optimize a company’s ROI. It covers the broad spectrum of planning how to integrate a product into different markets. This spectrum includes ensuring the website coding is structured to make translations easier, determining the overhead cost and headcount needed for the localization strategy, adjustments necessary for being culturally appropriate, deciding pricing and marketing, and more. A good internationalization strategy should outline getting a product to market with a high profit margin. Additionally, it should include solutions for possible market challenges with room to adapt once the plan is underway.
How to Develop a Successful Internationalization Strategy
The three major components that most of the specifics of an internationalization strategy fall under are understanding the company’s motivation for expansion, researching various markets for success margins, and deciding on the expansion approach for different countries.
Understanding your company’s motivation for expanding into new markets should always be the first step in any strategic approach. For example, companies motivated by quick expansion (like a start-up) would be more likely to fail in some of the countries they choose to introduce their product. This partial failure would be due to the speed of localizing their product. It wouldn’t give time to test scalability and profit margins or adapt to market response to secure a cost-effective launch. This method would damage any hopes of budget optimization and risk profit to obtain growth.
Another common motivation is to venture into new markets because your company has exhausted growth in its current one. This situation would push a company to be more profit-oriented but at the expense of localization costs with a mature company’s more extensive content.
The best way to have a beneficial internationalization strategy is to align your motivation and business strategy with market opportunities. Choosing to expand into markets that will benefit from your product and afford it will bring you the most success and increased revenue.
Executing an internationalization strategy is different for each country. You must factor in several components:
- Knowing what kind of people you can hire locally
- Understanding government and compliance regulations for market expansion
- Assessing the complexity of the country’s tax system
- Analyzing your competitors and how your product and price could best rival theirs
It also includes ensuring the content is up to par with the country’s cultural standards by analyzing content and eliminating potential localization issues in various languages. In-depth market research allows you to understand your projected consumer base. It guarantees the cost and effort of adapting the content to that market will have a higher profit margin.
Two common approaches to operating in a new market are “HQ” and “local business.” Both come with advantages and disadvantages and should be evaluated to see if they’re a beneficial approach for your company.
The HQ approach involves stationing your physical business or headquarters in one country, localizing your website, and following local legislation to operate in other countries with minimal overhead costs. This approach can bring more coherence to your business and make it easier to scale products. However, it comes with significantly increased managerial overhead and organizational complexity for each new market because each expansion will require supervision within the same company.
The local business approach involves creating a local company in each new country and granting them autonomy to adjust its needs to fit the market. That role would include but not be limited to adjusting taglines, removing or suggesting new items for the product line, and changing product branding to suit the culture better. This approach relieves the managerial pressure for each new country. However, it increases overhead costs significantly for operating in new markets.
Examining your company’s motivations, completing market research, and selecting the appropriate expansion approach will help you create a strong foundation for a successful internationalization strategy.
Benefits of Using a Platform Service
The best way to create an internationalization strategy that fits your business’ needs and increases revenue is to partner with a localization management platform. They can help you predict and overcome any challenges to localizing your content and provide various tools, linguists, and engineers with transparent pricing and communication to make the venture more cost-effective for your company. Internationalization requires a lot of moving parts and adaptability. Having a centralized platform will stabilize and streamline all aspects of the process.
Bureau Works is an end-to-end platform that can help you create an internationalization strategy with lasting success. Contact our team for more details about how our translation services can help you.
September 28, 2021