Along with the development of technology, communication, and transportation, it becomes easier for companies to expand the scope of their operations and enter new markets. Furthermore, these markets on their own are merging, forming a united business and economic space that transcends national and regional borders. Under such circumstances, global business operations become associated with a more successful strategy of sustained growth. In fact, a global expansion is perceived as an inevitable step in the evolution of any domestic entity. It appears that this tendency is caused by the fact that globalization in business is a self-propelling process. According to Khikhadze (2019), the benefits of globalism are mainly experienced by the leading entities that originate from post-industrial countries. Such players begin to dominate their industries, maintaining an international presence. This way, they inevitably impose competition on domestic organizations that might not be interested in a global expansion otherwise.
In other words, smaller entities are left with little or no choice but to pursue a global agenda. Their domestic markets are actively penetrated by foreign organizations, reducing the availability of resources and heating the competition for the limited target audience. This is particularly true for emerging economies where local entities often struggle to meet their organizational needs in the face of more developed competitors. For example, smaller countries in Latin America appear to experience this phenomenon, as personal observations suggest. Depending on the prospects of each particular economy, the market sees an increased presence of more developed neighbors, as well as the United States.
As a result, domestic enterprises cannot survive on internal trade alone once they pass the stage of initial growth. This makes global expansion the ultimate goal of any business, but the process should be done in light of crucial factors. The planning is to rely on the geographical, cultural, and economic proximity of the envisaged destination. The expansion relies heavily on these factors, because goods or services need to be provided and presented efficiently. There are not two identical markets, but choosing one with the most characteristics in common for the first stage of expansion is important. Unless a global reputation is built, an aspiring international player will only face more issues when working with the countries that are “too foreign”. After all, the intensity of the competition increases along with the scope of the business.
Reference
Khikhadze, L. (2019). Modern trends of the development of economic and cultural globalism. Ecoforum, 8(1).