Why Do Companies Go International?
Companies go international for a variety of reasons, but the goal is typically company growth or expansion. Whether a company hires international employees or searches for new markets abroad, an international strategy can help diversify and expand a business.
Growth
Many companies look to international markets for growth. Introducing new products internationally can expand a company's customer base, sales and revenue. For example, after Coca-Cola dominated the U.S. market, it expanded their business globally starting in 1926 to increase sales and profits.
Employees
Companies go international to find alternative sources of labor. Some companies look to international countries for lower-cost manufacturing, technology assistance and other services in order to maintain a competitive advantage.
Resources
Some companies go international to locate resources that are difficult to obtain in their home markets, or that can be obtained at a better price internationally.
Ideas
Companies go international to broaden their work force and obtain new ideas. A work force comprised of different backgrounds and cultural differences can bring fresh ideas and concepts to help a company grow. For example, IBM actively recruits individuals from diverse backgrounds because it believes it's a competitive advantage that drives innovation and benefits customers.
Diversification
Some companies go international to diversify. Selling products and services in multiple countries reduces the company's exposure to possible economic and political instability in a single country.
