PROCESS OF EXPANSION OF BUSINESS INTO A NEW REGION OR COUNTRY

Expanding a business into a new region or country is arguably the safest means of augmentation. This is commonly termed as geographical expansion. Geographical expansion is a sequential process which involves steps such as defining the potential of the business and target consumers. Notably, expanding a business geographically is not simply an expansion of sales in the target regions. According to Gioeli (2014), this strategy involves expanding delivery, supply-chain as well as availing more after-sale services to the new region or country. This paper will provide a thorough and in-depth analysis of this process of geographical expansion of the business in relation to literature review of previous research.

                   The first main step of geographical expansion is preparation of the business for the business of geographical expansion. It involves ensuring that a replicable business model is in existence. To evade chaos and mystification in new expansion offices, the business should make sure to set up processes for decision-making and ensuring there is accountability. This step is concluded by ensuring there is a standardized way of evaluating and reviewing across all offices. Research conducted on Bain & company which used a rigorous standardized orientation programme to ensure that each employee was assimilated into a “Baine” before being sent to the new offices around the world. In consistence with the global review process, the company uses 6 month accomplishment benchmarks. This makes certain that in spite of the office a worker is posted, he/she goes through the same experience (Sakarya, Eckman & Hyllegard, 2007).

                   The expansion process requires choosing of the right region or country to expand the business. This involves identifying the geographical location that the business owner has cosmic experience, acquaintance and contacts. Gioeli (2014) Notes that comprehension of regions or countries that are suitable helps identify areas the offer long-term prospects for profits and growth. Businesses should therefore focus on moving to locations that have robust latent demand for goods being produced. This forms the demand-side. The presence of capable and vigorous people to work in those regions forms the supply-side of this process.

                   Additionally, the business should prepare the market for its entry. This is the stage where products of the business are introduced into the market. This may be at the same time where the company conducts a pilot survey. According to Sakarya (2007), warming up the market involves hiring and transferring those employees who have relationships with people in these regions and are aware of the local culture and language. The business introduces new local contacts and makes introductions from its head office. Research conducted on the MAC group, a business advisory company sold in the 1990s back up this step. MAC grew into a $ 250m company and its profits increased after it ensured that its senior partners at all times ensured they created and warmed up studious contacts prior to expanding into any country or region (Gioeli, 2014).

                   To complete a successful expansion, the business should commit itself to maximizing sales in the new region or country. This involves focusing at one country/region at a given time and if it is successful, moving on to the next. Sakarya (2007) posits that multiple locations would distract management focus. Then, spread the success of the head office to the new regions for instance through exchange programs of workers in these regions and the head office.

                   The idea of this article is that the process of geographical expansion is not to be under-estimated at any time. Any business should ensure successful expansion by undertaking the abovementioned steps. Noticeably, there are multitudes of other issues in the process of business expansion into a new region or country but those discussed above are the cornerstone of any geographical expansion of a business.

References

Gioeli, A. (2014). International business expansion: A step-by-step guide to launch your company into other countries. Los Angeles, CA: Over and Above Press.

Sakarya, S., Eckman, M., & Hyllegard, K. H. (2007). Market selection for international expansion: Assessing opportunities in emerging markets. International Marketing Review, 24(2), 208-238.