What Are the Four Steps of Doing Business Abroad? Explain Marketing in the Right Sequence

The first stage is the exportation stage, where your product is marketed to your intended market. Some companies do this directly, while others use a third party to sell their products. Direct exporting is shared among luxury companies and those that have sold internationally for years. This approach usually yields a good return on investment. However, if you're new to exporting, you may want to use indirect exporting as your first step.

FDI is the second step in going global. As companies become more productive, they are more likely to export. This process is also associated with higher innovation, such as learning-by-exporting. FDI also promotes technological progress in the economy and sector. By sourcing technology abroad, FDI can also help your company reduce its costs of entering foreign markets. If your product is exported, you'll reap the rewards of the success of FDI.

At this stage, new channels of distribution and sales promotion are created. Production is switched around. Foreign direct investments have become more critical. The next step involves re-allocating production and developing cooperative links between the home and foreign companies. This process is sometimes referred to as business cloning. The Uppsala model, meanwhile, is the most common type of internationalization. It involves the delegation of marketing and sales functions, as well as establishing cooperative links with the foreign company.

Once your company has decided to enter an international market, you must plan how you will enter it. There are several strategies to enter a foreign market, each involving a different cost and level of control. Choose one depending on your product, its value, and how it can be shipped. You must also consider the competition and consumer demands of the market and decide whether to buy or produce. So, what's the right strategy for you?

The second stage is called sequential internationalization. This is how your business moves from domestic to internationalization slowly. Many entities follow this path. This stage is widespread in the case of new companies. These entities are often described as "born global" and struggle to identify the national markets of particular importance. They often focus on global sales maximization. These companies have to overcome several barriers to enter a new market.

In the exporter stage, your company turns raw materials into finished products. Most of the time, this is a part of your main product, which will need assembly. For example, microchips are manufactured in Japan and then shipped to the U.S. to be assembled by Apple or Dell. However, exporters may choose to export products if they specialize in a particular field or need help finishing them.

Before entering an international market, you must establish a robust domestic demand. This stage will help you fine-tune your products and test their performance. If you are new to exporting, developing a strong domestic market may be a good idea before moving on to international markets. This stage is essential if you're planning to export goods but don't want to sacrifice your core business. Once you've achieved this, you'll be able to expand your business into other countries as well.

Your company decides between local responsiveness and global integration in a global strategy. In the latter, localization may lead to the localization of operations and products. Some brands opt for localization, while others tend to standardize their processes. A successful transnational strategy can be an excellent way to test the global appeal of a product without investing heavily in staff or infrastructure in the target markets. It's an accessible strategy and usually works well in the early stages.