In current highly competitive conditions, it is thanks to international opportunities that the companies are further able to preserve their strategic focus and at the same time improve their profitability and grow their markets. It has become a commonly accepted wisdom that SMEs and large companies have a better performance when adopting a global strategy and the reasons for this change in strategy lies in seeking the growth through market diversification, earn higher margins and profits, gain knowledge, getting closer to customers, access low-cost resources, economies of scale, confront international competitors etc. Reports have found that 70 % of SMEs with subsidiaries abroad found that internationalisation has improved their competitive strength’
International market selection: a determining factor of the international performance
There is evidence that systematic approach of international market selection is a determining factor of the international performance in any stage of internationalization but particularly in the early stages. In addition, there are costs involved in developing new international markets and the opportunity costs are important in case of unfitting market choices. The decision of the next market selected for future development will bring a greater performance if it has been analysed according to organizational resources and capabilities and market location decisions.
Why almost companies don’t use a systematic approach to international market selection?
On average companies using a systematic approach to international market selection are better performing than firms with a non-systematic approach. Despite that, 75 % of the companies do not adopt a systematic approach to international market selection. Among the main reasons the SMEs are still quite intimidated by the internationalization, are cited the lack of information to identify future markets and as well the unreliable data available.
With Prime Target, decide why and where your future growth lies
Prime Target offers to assist companies in the selection of markets to target. Our solution is delivered in the form of a top 5 to 20 countries with fully customized recommendations. Click here to find out more