What are the success factors of business internationalization?

There is no one right rule or formula for internationalizing a company, but there are certainly a number of success factors of internationalization that can create a real competitive advantage in foreign markets.

The topic related to business internationalization is as vast and varied as ever. In fact, it is not only about selling abroad, but about Establish a lasting presence in foreign markets. Already in recent weeks, wondering about which countries need Making exports despite current global tensions, we talked about the’importance of a strategic pathway based on specific choices and no longer on occasional sales opportunities.

Especially in the current economic scenario, dominated by profound changes and uncertainties, the concept of Export Readiness of an enterprise, or the predisposition, or readiness, To meet the challenges of international markets. Only through a Export Readiness tested and studied in detail can be expected to win competition abroad. In other words, the company that wants to internationalize and seize new profit opportunities abroad Must have the technological knowledge, production capacity and financial strength To take the ideal path. Here then is the’Export Readiness of an enterprise is composed of many small elements called internationalization success factors, which when put together constitute a true competitive advantage.  

The success factors of business internationalization

As mentioned, let's start by saying that there is no one-size-fits-all rule for operating successfully in international markets. Every company is different in its own way, and it is precisely this diversity that must be exploited to create something unique in the market, so as to outperform the competition and establish one's competitive advantage. 

In this diversity, however, for an internationalization strategy and overseas presence to be lasting and effective, there are a number of elements or guidelines called success factors of internationalization.  In this sense, the enterprise must be structurally ready, prepared for internationalization.

It means that he must have the language skills, technological knowledge, and production capacity to take the necessary path. Not to mention the communication aspect: if the catalogs, price lists, data sheets and website are neither edited nor translated at least into English, then the chances of success abroad are slim, and the much-desired international trade expansion will be very difficult to achieve indeed.  

Foreign trade techniques and appropriate structure

To work with international markets it is necessary to have technical skills and a business structure adequata. This means having an organization that is divided into roles and functions, capable of producing sufficient quantities to cope with new demand, and above all that rests on a very solid financial foundation. This is because, as mentioned at the outset, internationalization should not be seen as simply an opportunity that must always be seized, therefore the child of an approach of the classic saying “Let's try it to see how it goes, if luck is with us, fine...”. Instead, the internationalization strategy must be the result of thinking “I believe it, I prepare, and if I make mistakes I correct the mistakes until I get it right.”.

Here, therefore, it is also important to know Specific topics such as international payments, international contracting, transportation and customs systems. And if these aspects are not known within the company, it is better to spend time on specific training courses so as to prepare properly. If the company is ready from a structural point of view but not from the point of view of managing internationalization, it may run into some unpleasant problems.  

Capacity for product (and process) innovation

Another of the success factors of internationalization is the company's ability to Adapt the product to the needs of foreign markets, or to export a product that by its content offers distinctive elements of innovation. If from a production point of view the company does not offer something different to what already exists, it will be difficult to find new customers interested in buying, unless those products have, for example, A significantly lower price than the competition.

Innovation can also affect business processes, such as distributional ones: when talking about foreign markets, one cannot but talk about distribution channels and forms, and this aspect is also one of the fundamental steps through which internationalization is built. Knowing how many steps a product has to go through to reach a potential customer is basic, both to understand who the players are that make up the distribution chain (which differs from country to country) and to realize how much the final price the consumer will have to pay to buy the product will increase.  

Ability to select the right business partners

The third of the success factors of internationalization, which is often underestimated, is. The ability to choose and build relationships with the right partners. In fact, their selection should not be limited to a mere choice of the most advantageous economic offer, but rather must take into account multiple factors. In addition, one has to think about a structured path of choice to have the best possible partnership for one's company. To do so, the selection process must respond to a well-defined and well thought-out rationale, which often consists of four different stages: partner selection, partner qualification according to defined criteria, evaluation of the partner's performance, retraining and confirmation of the partnership.

If you want to find out about these steps in detail, we recommend reading Octagona's article on selecting the right business partners, titled “Does your company rely on the right international partners?“.  

Brand development and outreach

Another indisputable success factor is the Brand development and from so-called brand awareness. The brand is that combination of name, logo (graphic symbol) and payoff (slogan) that brings together all the company's values and mission, which the company has been able to build and bring together into a kind of business card.

Therefore, it can be well understood how it is It is essential to create a strong corporate identity through the development of the brand itself, to sell at a higher price and increase the perception of value the customer has of our product or service. If this process works, the company will also be able to strengthening confidence of the consumer to give him security and peace of mind during his shopping experience.  

Knowledge of ICT tools

It is the last of the success factors of internationalization, but not the least important. Know and use planning tools, management systems, CRM, social networks, and any other means of increasing and improving business productivity, and interaction with distant markets is an indispensable element of proper and profitable communication management.

According to Octagona, two tools in particular must be indispensable In business organization and internationalization strategy. The first is the CRM, and in the article “Why does your business need a CRM?” we looked at all the benefits this tool can bring to companies, such as automating communications, capturing leads and potential contacts, and more generally the time saving that results from its use. The second, on the other hand, is LinkedIn: In fact, this social network allows creating strategic alliances. Tackling international markets together with other companies or other professionals means sharing risks and results, with a view to synergy that enables business growth through the acquisition of new skills, knowledge and networks.

Conclusions on internationalization success factors

In this article we understood how there is no single formula for a successful internationalization strategy. Despite this, there are a number of success factors of internationalization, which can help create a competitive advantage. In other words, if a company has the five characteristics listed, it will have greater export readiness than other competitors, and this advantage can be used in its favor to make itself known abroad.

And it is precisely these elements that are even more important in the current macroeconomic environment, which is dominated by deep uncertainty due to the high cost of raw materials and inflation that shows no signs of slowing down, as reported in the latest Export Report of SACE. By relying on these cornerstones, the enterprise can pursue a long-term strategy that can withstand any kind of crisis, external or internal. After all, this is the only way to continuously increase turnover and profits: with a structure that is present and dynamic in international markets.  

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