With technological advancements in recent years, international business has been on rise with many Indian startups giving a strong competition to many foreign businesses. Starting an international business without prior market analysis and guidance could make this journey a little hefty. So here an international business consultant plays a strategic role in giving appropriate solutions and well researched market trends along with right development and marketing strategies to remove early hurdles and make your journey smooth and hassle-free.
Types of international business
Every type of international business can be classified in the following seven categories or modes of business:
1. Imports and exports
Imports and exports are also termed as a means of foreign trade and are carried out in goods and services. A company choose to exports its goods and services to the foreign market because it opens up opportunities for:
- Global trade
- Access new markets
- Increase revenue and sales
Importing a productive commodity to a country which will contribute in effectiveness and efficiency in economic growth like equipment and machinery becomes an asset when the production of those products will incur huge costs.
Operating an international business in exporting and importing could be challenging when there is absence of expert guidance. Having international business consulting becomes beneficial in terms of having correct global market knowledge with the onset of business.
2. Licensing
It refers to a contractual agreement between two companies wherein one company leases its intellectual property to another company with specified terms and conditions. There are four types of licensing agreements:
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Brand Licensing
It refers to the license which gives the rights to the licensee to distribute its products under the brand name, brandmark and logo.
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Copyright Licensing
This license grants the licensee the right to use a copyrighted product.
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International Licensing
This type of license gives the licensee the foreign business entity the right to manufacture and use a company name and products for its market.
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Patent Licensing
This license gives the patent holder or owner the rights or control over their patent while granting the licensor the access to the patent for manufacturing and distribution purposes.
3. Franchising
To expand the business nationally and internationally, this technique is effective. It refers to the process where the parent company allows the other company to operate business in their name, brand and logo. This is termed as franchising wherein the private company franchises the other company and the parent company becomes the franchisor and other company becomes the franchisee.
4. Outsourcing and offshoring
Outsourcing means giving out contracts to international companies for certain business activities. Offshoring also has a similar aspect to outsourcing, the difference lies within the fact that the physical facility is moved to another country but the management stays within the company itself.
5. Joint Ventures and Strategic partnership
Joint ventures refers to a type of contract between two parties where one is the international company and the other is local where business has to be conducted. A separate legal business entity is formed with separate business objectives. A company can take advantage of joint ventures when there are certain kinds of restrictions on international companies in some countries.
A strategic partnership is an agreement wherein two or more business entities come together and form alliance with each other and share resources in order to enhance business operations of one another.
6. Multinational Companies
Also called the transnational corporation, registered and is operating its business in more than one country. Having a home country, where its headquarters are located and other subsidiaries, which are operated in other countries and is either wholly or partly owned by the company.
When the company decides to establish its subsidiary to other countries, there are usually many challenges. The type of resources which are present in the home country does not necessarily have to be available in the country may be at the same cost etc. This is where international business consulting works and addresses these kinds of problems.
7. Foreign direct investment
Foreign direct investment of any kind is beneficial for a country’s economic growth. Entry of foreign cash assists in building up an excellent infrastructure, increasing good employment opportunities and high productivity.
The company which invests, not just gives in capital but also commits technology, processes and management.
When a foreign company is investing in another country, it not just invests in the form of capital but the investment can be in the form of joint ventures, subsidiary companies etc.
Factors concerning to establish an international business
There are various challenges which need to be dealt with according to factors concerning the establishment and growth of a company in a country. International business advisory is required before starting any business operations. Let’s have a look at the factors that need to be considered to have a successful business advent:
1. Geographical factors
Numerous problems exist in different countries like supply chain management, transportation facilities, storage facilities etc which aren’t easy to address when proper international business advisory isn’t taken. Sometimes lack of basic necessities changes the procedure or techniques a company follows when operating in some other country.
2. Social factors
Apart from geographical conditions, a country’s social issues or environment needs to be kept in mind as well. There are many countries in the world which are politically disturbed and doesn’t have stable economic conditions or withstand any kind of attack either on them or on the economy, the companies resist themselves to set up their subsidiaries in those countries as it would be more cost burdening for them to operate in any such type of country.
3. Legal factors
Every country has different kinds of laws and policies to do business operations or any kind of international business. There are set of some basic laws which needs to be followed:
- Organization laws
- Employee protection laws
- Consumer protection laws
- Security laws
4. Economic factors
There are certain kinds of factors which are important when you are expanding your business internationally like the current market value of a country in which you are operating your business or planning to operate, the market size, cost, inflation rate etc as it directly affects the profitability of operations.
Things which needs to be kept in mind during starting an international business
1. A Thorough market research with the help of an international business consultant
2. Developing a effective marketing strategy and analyse the market factors surrounding it and taking appropriate international business consulting services
3. Setting up a payments channel because every country doesn’t necessarily have a particular kind of technology in use for payments if it’s available in the home country or other countries where the subsidiaries have been established.
Launching an International business
There are three ways in which one can establish an international business successfully:
1. An online platform is important to do business
When starting a business internationally, it is necessary to have an online platform like a marketplace which makes it easy for the international consumers to connect with the company through the e-commerce site. Having good technology and infrastructure, it becomes easy for the business to establish its brand or business in a foreign land. Making the access easy and user friendly builds up trust amongst the consumers.
2. Foreign distributors are significant
Growing and establishing your business internationally requires intermediaries who can do ground work. The foreign distributors are more helpful because they have better knowledge about the consumer trends, preferences and choices and can work for your business at the ground level in terms of marketing, selling, etc.
3. Partnership with a foreign company/brand
Entering in the international business with a joint venture is a good idea when you want to start or grow your own business in the foreign market. The important aspect of the partnership is that with a suitable partner in the business you would have an insight about the foreign market dynamics and save your money and valuable time and you conduct your business operations successfully.
How Solution Buggy helps you in starting your international business
With industry experts and international business consultants of more than 15 years of experience, Solution Buggy is here to assist you in providing the right kind of solutions and helping you with every step right from setting up your own business to the successful implementation of your business in the market. Solution Buggy provides you with international business services to give your business a great start.
