When it comes to international business expansion, more often than not there will be a few logistical challenges along the way. This is, of course, inevitable when it comes to such a gigantic task involving the planning, controlling and managing of the movement and storage of goods and services as they cross international waters from one end of your supply chain to the other.
Here are some of the main challenges you may come up against, and advice on how to foresee and tackle them, whether you’re looking at how to start a business overseas, or how to expand business operations into another market.
Supply chain risks
The longer your supply chain, the more exposure your business has to risk and disruption. Therefore, it’s crucial to develop a plan for your supply chain, to help reduce this risk as much as possible. This starts with identifying and assessing the potential risks, getting a full understanding and overview of the business’s suppliers, and going through hypothetical scenarios of the challenges that could arise.
Risks may occur along the supply chain because there will be greater variability when your business expands its operations internationally. There’s more chance of deviation away from what you expect, in terms of production and time needed. It’s important to factor in these variables when making calculations, and determine the capabilities of the supply chain, and how it will translate when you go global.
You will also have less supply chain visibility when you expand internationally. Tracking shipments, for example, becomes more difficult as you expand internationally when you acquire multiple carriers with multiple modes of transport. Having poor visibility can lead to delays and disruptions, which ultimately means unhappy customers.
To avoid this, consider using collaborative processes, such as data-sharing and demand-planning, across all departments and business partners. Another option is cloud-based software platforms for data-collection and information-sharing, so the right people can quickly identify issues when they arise and solve them before they become a massive problem.
Language and cultural barriers
If you’re expanding to a country with a different dominant language, communication is going to be a challenge. Therefore, the best way to prepare is to ensure you have at least on employee who speaks the local language, and who is familiar with local laws and customs. Different countries work at different paces and communicate in different ways. Normal business conduct for one country could be seen as rude and offensive in another; for example, different countries have different takes on giving constructive feedback, and the methods you’d use to motivate one employee could actually demotivate another.
You’ll also need to make sure you have the right infrastructure in place. Customers in some countries, for example, may be more likely to expect next day delivery, or 24-hourcustomer service seven days a week.
Tax and compliance
International expansion comes with the job of sorting out taxes, fees and tariffs – which is a big job in itself. Then there’s making sure you have a thorough understanding of new trading standards and regulations, which no business can afford to take for granted. It’s crucial, therefore to do due diligence in good time.
There are many, many other things to consider when going international. For example, there’s also the decision of whether to switch to international payroll providers. International expansion requires a lot of time, effort and decision-making, and some companies prefer to go to experts for advice on international expansion, such as Galvin International.