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The Awakening of International Expansion

2020 brought about several new trends. Of course, some of them are negative, while others are positive. This is normal in a crisis. Even the best professionals are just trying to predict the current period’s long-term business consequences. We can already see, from the business perspective, that tourism was ravaged by COVID-19, while the disinfectants market exploded. Between the two poles, other industries vary greatly in this regard. However, now we would like to draw your attention to another area based on a more strategic approach, because the pandemic’s biggest winner is international expansion.

Local companies with small dreams

Although the approach varies based on the country at hand, we can say in general that the greatest challenge for local companies is entering the international market. We need to have serious strength to decide to leave our country’s boundaries and head off into the unknown, even in places where concrete central programmes and well-established recipes support local companies. Of course, some leaders and owners do so without thinking, but now we should concentrate on the successful, more rational paths. Owners of local companies learn early on that expansion to another country or continent entails many risks, and as a result, it means major investments. That is why they think it over precisely before they get down to it. In the past decade – mainly due to the 2008 crisis – the “we will go abroad, open an office, and we will see” type of expansion has significantly scaled down because many people got burnt very badly. It meant serious expenses for the owners, who either mopped up all of their profit generated in the local market or had no other option but to let the investors into their original businesses, which they had not needed before. No wonder that strategies appeared that favoured cross-continental sales processes instead of focusing on local locations. They recommended “settlement” only when it was clear that market research did not lie, and there were promising leads indeed. As a result, they greatly decreased the risks of expansion. New investments often fell to one-tenth; however, results improved because the period after the an office opening was not characterised by the constraint that “my money is burning”, and “we need results ASAP”. As a result, a growing number of local companies were able to increase the size and dimension of their dreams.

Rapid growth

The COVID-19 period meant significant market support in a process that has been going on for years. In the pre-pandemic era, market actions were quite one-sided regarding expansion because virtual meetings were mainly in the interest of the pushier side, while the other side did not want to stop having the well-established personal meetings. Although success was possible with serious sales methodology and communication, these successes are incomparable to the current situation. Due to the increased usage of video meetings, borders and continents run into one another. Does it make any difference if we have a discussion from our room with a partner who is 50, 500, or 5000 kilometres away? Smart strategists recognised this effect early on and directed the main actors of local markets to significant expansion, with notable success. The recipient side benefited from the new situation as well because the ways of thinking and cooperation became global, and local limitations disappeared. If the expertise a company needs is 10,000 kilometres away, they have to buy it from there and should not settle for lower quality expertise just because that is closer. Thanks to this process, competition is globalising too. It is no longer enough that we are the best ones in the country; we have to stand firm internationally as well. It unequivocally shows the future of the market. We human beings refuse to give up personal meetings; however, we do not have to because who would not travel even thousands of kilometres for a business that we already have in our pockets? Who would not visit another country from time to time to see that their business partner is satisfied, and things go the way they are supposed to? Mainly the owner or leader of a local company? Why would they not combine a business trip with exploring a new culture or having a nice weekend? It is no coincidence that demand for international expansion has multiplied in the past few years. Consulting firms need to get ready for it as well.