Nowadays, thriving as a long-term business in the competitive market requires overcoming several challenges. Businesses are dealing with increased competition, needing help finding skilled workers, handling the pressure to increase productivity, and remaining competitive and sustainable. Plus, working with increasing digitalization and automating processes takes a lot of effort.

Businesses are overcoming these challenges with ‘global business expansion.’ While the term may be trending, what exactly does it mean? How can you overcome these challenges, and how does global expansion work?

In simple terms, it is a strategic step towards achieving global success. We created this guide to help you navigate global business expansion and enter new markets.

What is global business expansion?

Global business expansion is expanding your business from your home market into a domestic/foreign market to enter new territories and be sustainably successful. It is an important step if you want to expand your business and benefit from international companies.

What are the benefits of global business expansion?

Global business expansion offers several benefits, including:

  • Conquer new markets:

Expanding from your home country into new countries allows you to enter and conquer new markets, reach a new customer segment, and generate more sales.

  • Spread risk:

Many companies expand into other countries to minimize risks and not stay dependent on one market.

  • Reduce costs in the long term:

International growth allows companies to reduce costs and scale their businesses effectively.

  • Access to new talents:

Different countries, different customs. One of the advantages of global business is that you have access to a broad and new talent pool. Talents who speak other languages, often several, are highly skilled and have a broader educational background.

  • New innovative approach:

Expanding internationally allows companies to adapt to current trends to keep up with the market trends and stand out from the competition.

Of course, every business change brings challenges, including global business expansion.

Here are five common global expansion challenges and how you can overcome them:

  • Cultural differences:

Every country has a different culture, especially outside of Europe. If you decide to expand to other countries, educate yourself about the culture and communication style. You can also familiarize yourself with important holidays, traditions, work ethics, and how they do business to overcome language and cultural barriers. You might be surprised to learn how different cultures function! This is the only way you can build trust and have the opportunity to operate in this specific market. That is why it is important to have people from the new markets you want to enter or people who are already familiar with a particular culture. Read more about the cultural differences at Harward Business School Online.

  • Legal compliance:

Learning different laws is a challenge. If you plan on expanding into new markets, understanding the laws and regulations specific to that country is essential. Most companies do not have the resources, know-how, or knowledge of local legal requirements and regulations. Getting professional advice is a time saver. Our experts are happy to help you. You are welcome to arrange a free consultation. They will familiarize you with the tax regulations, contracts, work hours, and local regulations in the countries you want to expand.

  • New markets:

Understanding the new market is vital if you want to operate internationally. This includes consumption habits, demographics, customer interests, and preferences of potential buyers. An EOR already knows the market and can help you overcome these challenges.

  • Recruitment process:

The recruiting process begins after a company analyzes the new market, the customers, and laws and draws up a detailed business strategy. Every country has unique recruitment processes. Even slight differences can have a considerable impact. When acquiring staff, many companies outsource the process and collaborate with a firm familiar with the country. EOR manages the whole process, including human resources, payroll, benefits, etc.

  • Managing global teams:

Managing global teams all over the world is challenging. Not only do you have to cope with cultural and language barriers, but also different time zones and levels of technology access. The COVID-19 pandemic showed us the importance of regular communication and collaboration to build trust and effectively manage teams.

Why should a company consider venturing into global expansion?

Companies go global for many reasons. The most common motive is to overcome the challenges of saturated markets in their home countries and achieve sustainable growth.

Businesses can operate in new markets and countries with access to international growth visas.

Companies that grow internationally expand with the help of international markets, diversify risk management, and move towards an innovative approach to stay competitive.

The five elements of international expansion strategy:

Many companies would like to benefit from expanding internationally, but as we know, international growth is challenging.

According to an analysis by Harvard Business School, after five years, the positive Return of Assets increases to 2.4%, while it takes about ten years to achieve only a 1% increase. But why does this happen?

Global expansion has its advantages and a high-risk operational complexity. We’ve created a list of the five elements of an international expansion strategy you need to employ.

  1. Market research: The first step includes thorough market research. This is where you will find potential markets for your business and determine if entering those markets is viable. Next, evaluate the target country’s economic, political, and social stability to ensure a beneficial environment for business operations.
  2. Evaluating legal and tax Aspects: Consider the legal and tax regulations in the target country to understand the compliance requirements and financial effects.
  3. Analyzing cultural fit and consumer behavior: Understanding the cultural aspects and consumer behavior in the target market is crucial to tailor your products or services effectively.
  4. Clear product strategy: Before you take the step into expansion, it is vital to have a clearly defined product strategy. Try your product in a test market and adapt if necessary.
  5. Choose an experienced partner: Having the right partner at your side can make the process easier and help you overcome the challenges. Cooperate with a company with global business expansion experience and familiarity with your target market.

How do you choose the right global expansion strategy?

When it comes to global expansion, there is not one solution that fits every company. There are different strategies, and you must choose the one that best suits your company and goals.

Here are the most important strategies explained:

Global Strategy

All markets and countries are treated equally with a global strategy. There is no adaptation to different markets. Examples include Apple and Netflix. These two companies look the same everywhere in the world. The focus here is on standardization and centralization.

International Strategy

This strategy transfers successful concepts from a company’s home country to foreign markets, usually through classic export. Look for markets similar to your home country to successfully expand the product or service. A great example is Google. Google tests new products and services in the US before rolling them out to other markets.

Multi-domestic Strategy

Companies can adapt products and services for specific markets with a multi-domestic strategy, treating each market individually. For example, Nestle and Unilever adopted a successful multi-domestic approach. Their products and advertising campaigns are adapted to the respective country.

Transnational Strategy

A transnational strategy is a combination of a global and multinational strategy. It is a mix of standardized processes combined with locally adapted products and greater flexibility. Companies pursuing this kind of strategy include Toyota and Procter & Gamble. Click on the link to learn more.

In general, many companies switch between strategies as they expand because they constantly adapt and try to find the right one. This is likely the case for you, too. Our experts will gladly advise you which strategy is best for your situation.


How do you plan to expand your business globally?

A structured plan is essential for a successful global expansion. Here are the steps to create an expansion plan.

First, you need to research the target market to understand local regulations. Second, create a plan that fits the local culture. You can benefit from regional partnerships and advice from global expansion experts.

Third, as a company expands globally and sends employees abroad, it becomes crucial to deal with visa requirements. Entering different countries may require various types of visas, including work, investment, or business visas.

Finally, businesses must effectively manage the challenges of visa applications. Each type of visa has its own set of requirements and application processes. We support you throughout the process to ensure you meet the visa requirements.

What are the four main criteria for international business expansion?

The four main criteria for international business expansion are market potential, legal compliance, competitive landscape, and functional readiness. These involve assessing demand, understanding laws, analyzing competitors, and ensuring operational capabilities.

What is global expansion in business?

Global expansion in business is when a company extends its operations into international markets. This strategy aims to expand a company’s customer base, diversify assets, and grow beyond the domestic market.

What are the four global expansion strategies?

There’s a lot to consider when exploring international growth opportunities. Here are four key approaches to expand your business globally:

  1. Exporting: Selling products or services in foreign markets without a physical presence, often used for market testing.
  2. Licensing: Granting others the right to use your intellectual property in exchange for royalties.
  3. Partnerships or joint ventures: Collaborating with local entities to share ownership and resources.
  4. Establishing subsidiaries: Creating fully-owned operations in foreign markets for maximum outcome and presence.

At ThisWorks, we are dedicated to making global expansion straightforward. Our expertise in international business development will guide you into foreign markets. Are you ready to take the first step? Schedule a free consultation with us today, and let’s start this journey together.

Article Author – Gino Peters

Gino Peters is the Commercial Director at ThisWorks, with a rich history of nearly a decade in international payroll. Throughout his tenure, he has consistently kept abreast of evolving labor legislation, ensuring that ThisWorks remains at the forefront of industry knowledge. Beyond his vast expertise, Gino is deeply committed to advising and guiding clients and partners with precise insights. His leadership guarantees that all content and operations at ThisWorks meet the highest standards of clarity, accuracy, and compliance.
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