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Expanding a business is certainly challenging but it’s also exciting and can bring great benefits if done using the right process. That is why carrying out correct planning is essential and will help in risk reduction when selecting a market and introducing your business into it.The challenges you may face can begin even before you start marketing your products/services. Below we mention 5 challenges you may face when expanding your operations.
Team and structureYou may have a sales and operations team that supports you in meeting your current needs in the local market, however, you must consider what team will support you in operations abroad.You will need to have thought about and be prepared for the following eventualities before they arise: Who will attend the purchasing orders?
- Local team
- The company’s headquarters
- The local company
- The commercial ally
Cost settings and pricing strategyThe product or service prices that you currently have in your local market may be based on your current costs, but what will be the associated costs in a new market?Making an analysis of the competition, its prices and scope of the product or service will help you to have a frame of reference, and then select the ideal strategy.Exchange fluctuationsYou must bear in mind that currency fluctuations may affect:
- The price of the product / service
- Local costs
- Return of profits
Geo-political risksThere are markets where the economic situation is highly interlinked with other countries. Such as with Mexico and Canada, which depend highly on their trade with the United States and therefore, the constant threats by the USA of canceling treaties generate uncertainty.You also might want to see: 5 tips to expand your business in Latin America It is important to consider that the investment you make in the country is long-term, as well as having a good understanding of what the advantages and opportunities are in the country you select, such as:
- Economic strength
- Growth predictions