International trade is the backbone of a strong global economy. Having international trading partners helps open a country’s businesses to new markets, includingU.S. companies looking totake their business global. In fact, U.S. exports accounted for about11% of the country’s GDPin 2023 as of Q3, and the International Trade Association (ITA) indicates that as of 2021,9 million domestic jobswere supported by U.S. exports.
The potential impacts ofinternational tradeon business growth is staggering. Companies that have yet to embark on an international business strategy have plenty of reason to do so, even if there are several critical questions that have to be answered first. Understanding how to find the right market, develop the right regional and local plans, and familiarize oneself with the legal implications of international trade are but a few of the many questions every business owner should consider when devising their international trade strategy.
How to Put Together an International Trade Game Plan
Coming up with an international trade strategy can be a significant undertaking for a business of any size. Developing one for a small business poses its own unique challenges, as it can be harder for these companies to get brand recognition overseas, navigate complex regulations, and divert resources to a dedicated team of local consultants.
To improve chances of success, any global strategy for trade should first consider focusing on seven key concepts:
1.Have a Strong Product Offering
The right product can make a massive difference when it comes to capitalizing on trade opportunities abroad. Any successful plan for international trade should start with a high-quality, unique product that also resonates with the cultural nuances and preferences of the target market. While copying what is already available on the market may seem like an easy in, it can be challenging for newcomers to carve out space – especially if existing businesses and overseas manufacturers have the incumbent advantage. To stand out and gain traction, opt for a unique offering that will meet the needs and cultural sensibilities of your international customers.
To stand out and gain traction, opt for a unique offering that will meet the needs and cultural sensibilities of your international customers.
2. Be Sure There’s a Market Opportunity
Having a strong offering is one thing. But is there a market opportunity in your target location? To make sure your efforts are directed toward a genuine and profitable market need, it may be necessary to build a global strategy based on extensivemarket research. To gain valuable insights into your target market, considerutilizingtools like aSWOT analysis(strengths, weaknesses, opportunities, threats) and a PEST analysis (political, economic, social, technological), as well as conducting primary research through surveys and focus groups. Digital platforms and market research databases can also give a glimpse into product demand and emerging trends. Small businesses should be prepared to dive deeply into the nuances of market opportunity, size up both international and domestic competitors, assess product demand, and, ultimately, develop aunique business proposition.
3. Work Out Supply Chain Logistics
Supply chain considerations such as management and logistics take on increased importance when entering into global trade. Whether you’re exporting goods directly from the U.S. or instructing overseas manufacturers to deliver goods to new geographic locales, consider building a robust supply chain with as few weaknesses as possible – one that’s diverse and flexible. Leveragingmultiple suppliers,for instance, can help safeguard operations against potential disruptions like geopolitical events, natural disasters, or even supplier-specific issues. In addition, try to make sure that any current partners can support steady shipments to international clients and outposts. If you don’t and your business begins to gain traction in its new location, they may struggle to fill early orders.
4. Comply With International Law
Legal considerations for international trade are multifaceted and may involve three different sets of rules and regulations: domestic laws in a country’s home base, laws in the destination country, and international laws governing global trade. Compliance with all three of these sets of standards requires not only steadfast adherence to guidelines but also a proactive approach to keep up with frequent changes – otherwise, your business could run into pitfalls such as inadvertently violating intellectual property rights, running afoul of import/export restrictions, or misinterpreting contractual terms in a foreign legal context. Hiring local assistance in the country you plan to export to can help you get real-time guidance and ensure that you’re abreast of local nuances and legal shifts.
5. Form Strategic Partnerships
When expanding internationally, understanding local cultural dynamics can be as crucial as knowing the market. These dynamics can influence consumer preferences,business etiquette, negotiation styles, and even regulatory adherence. Forging strategic partnerships with local businesses or consultants can offer valuable insights into these cultural nuances. Whether you plan to establish offices in other countries or simply want to expand where you do business, having a network of trustworthy local contacts can not only make an otherwise difficult process smoother, it can also ensure that your business practices resonate with local values and expectations. For example, good local partners can help guide your business through cultural ceremonies, introduce you to the right decision-makers, and advise on culturally appropriate marketing strategies, helping your business navigate and thrive in a brand-new cultural environment.
6. Leverage Government Resources
Try notto overlook federal and local resources that can help you with your international ambitions – they are plentiful. The ITA offers a“how-to” guide to exporting, andU.S. Export Assistance Centersare available to teach small businesses about the exporting process. The U.S. Department of Commerce also puts together an annualNational Export Strategy reportthat outlines what actions the government is taking to help businesses, including small businesses, compete globally and overcome barriers to trade.You can also check out the State International Development Organization’sState Trade Directoryfor localized assistance.
7. Hire the Right Talent
Any international trade strategy is only as strong as the team behind it. Your company’s staffshould haveclear, actionable guidance in order to successfully bring your business to new markets. Not only does this mean hiring individuals experienced in exports and cross-cultural communications, but it also emphasizes the need for continuous training, including cultural sensitivity sessions. These training sessions can help make sure your team has the tools to effectively interact with a diverse array of clients and collaborators. In turn, this can reduce misunderstandings and foster positive relationships.
The Bottom Line
Businesses looking toexpand into international marketsstand to benefit from diversified revenue streams and an increased market size, to say the least. But getting started can be a challenge. Although there are myriad factors that have to go into developing a robust, successful international trade strategy, paying careful attention to everything – from your product offering and destination market needs to compliance with international laws can make a major difference.
Photo: Getty Images
