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International expansion is an enormous undertaking for businesses. It is disruptive, complex and time-consuming. It requires businesses to think beyond their local markets and often develop a new or adapted corporate strategy to grow overseas. But, in our globalized world, expanding across borders into new markets oftentimes is less of an option and more of an imperative.
The good news is that, if executed deftly, global business expansion has significant cross-border benefits for enterprises that recognize a need to grow as part of their overall strategy. Overseas expansion opens up opportunities in new markets, enables growth, expands the customer base, fosters inclusion and diversity, increases revenue, and much more.
Due to the transnational complexities, regardless of their strategy to expand, all companies will hit roadblocks or challenges on the path to global expansion. Successful global businesses and NGOs learn from these snags, adapt and evolve. Here are a couple of examples of companies that have had great success expanding globally:
Starting out as a small business, McDonald's became a national chain in 1961 and started international expansion in 1967. From that point, the company opened at least one store each year in every continent before the end of 1992. In 1996, the fast-food giant opened restaurant number 20,000, a remarkable international business milestone. Today, McDonald's has almost 39,200 restaurants internationally and is the second-largest fast-food chain in the world.
What's the key to their success? A strong brand and adaptability. There aren't many brands that have nailed the art of standardization for quality control; McDonald's is one of the few. At any location, anywhere in the world, customers know they can expect the same taste at the same decent price.
In addition to having a consistent offering, McDonald's is highly recognizable by its golden arches, a memorable logo that evokes positive feelings. Fun fact: In order to open up a restaurant in Sedona, Arizona, McDonald's worked out a deal with the city and agreed to color their famous arches turquoise to comply with Sedona's southwestern esthetics, codified in city ordinances. Sedona's franchise is the only McDonald's restaurant in the world that doesn't sport the golden arches.
The innovative company has also become quite good at adapting its international menus and marketing strategies in other countries. For example, in India, the international chain launched the McAloo Tikka burger — a burger made of potatoes and Indian spices to meet the dietary needs and tastes of people in the region. Middle Eastern locations offer a flatbread sandwich called the McArabia. You could say McDonald's is a golden example of how important brand consistency and adaptability are in thriving as growth-hungry transnational business owners.
Toyota cars were not an immediate hit in the U.S. In fact, the company's first export sat on the lot and lost the company money. After a significant amount of market research, Toyota finally realized success in the U.S. with the creation of the Toyota Corona in 1965, designed specifically for American drivers. The Corona's powerful engine, factory-installed air conditioning, and automatic transmission appealed to the target audience and drove the company to the third best-selling international brand imported into the U.S. As it became known for building cars that lasted, with more and more units on the streets, Toyota's international trade growth didn't stop there.
Internationally, the Japanese automobile manufacturer paved its road to success by establishing itself as a high-quality, reliable brand with just the right amount of comforts at just the right price. As Toyota continued to drive up its worldwide presence, it cruised into household-name status, becoming a trusted brand in more than 170 markets, including China, the world's largest by population.
Toyota is another great example of how adaptability fuels international trade. To meet consumers' needs and compete in the luxury vehicle arena, Toyota rolled out its Lexus in 1989. To compete in the race for hybrid gas-electric car dominance, Toyota introduced the Prius, the world's first mass-produced hybrid-energy vehicle. The Japanese automaker's reputation for high-quality, durable vehicles and its robust transnational marketing tactics have made Toyota the best-selling car manufacturer in the world.
International content platform and production company, Netflix, may have had a humble beginning, but this internet startup quickly metamorphosed into the largest, most recognizable name in entertainment, transforming its business model from mail delivery of DVDs to streaming its movies online. In seven years, as the digital video streaming industry exploded, Netflix wrote its own Hollywood success story on the small screen, entering over 190 countries, and today the video-streaming behemoth has more than 200 million subscribers — half of which come from outside of the U.S.
Going global was no simple feat for Netflix. For their expansion strategy to succeed, the company's decision-makers had to obtain complex content deals region by region (and sometimes country by country), offer local-language programming and language translation, and deal with many sets of regulatory restrictions. Netflix also faced strong competition in some countries, slowing its global expansion. However, the entertainment company was able to overcome these challenges with a unique home-based product and enjoy long-term financial strength. There are two really smart things Netflix did that its great success is often attributed to: Netflix moved slowly into new markets and adapted to the new territories it's entered.
From 2010-2015, Netflix grew its international presence slowly and entered 50 other countries. Its executives crafted a highly strategic business model and they gained invaluable experiences in those years that allowed them to enter an additional 140 markets by 2017. They also adapted to cultures and preferences by offering different content and partnering with local stakeholders. Netflix's successful expansion into so many nations has set them up for great success and growth in the years to come.
You don't have to be a McDonald's, Toyota or Netflix to excel around the world. Here are some practical expansion tips that large corporations, medium-sized businesses, and small businesses can utilize to make the move from local to global a little easier.
Expanding your business into global markets is a significant undertaking, but for most businesses, it is imperative as globalization continues. By doing your due diligence and being prepared for the challenges and opportunities that will arise, any business can successfully go global.