What are the best international business expansion strategies?

What’s over the horizon? If you want to expand your business abroad, that’s something you’ll need to figure out well in advance. 

From market research to managing logistics, venturing overseas takes a lot of planning. Some simpler businesses can be run from a distance; others are complicated and expensive to deploy, or need regulatory licences, which can take time to obtain. Overall, global expansion can be hard work – but if you get it right, the payoff can be extraordinary. 

Below, we’ll explain why international business expansion is booming, explore six foreign market launch strategies and finish with a six-step introduction to growing your business abroad. 

Why is international business growing? 

Between Covid 19, an inevitable recession, political upheaval and regional unrest, it’s been a rough few years for international business expansion. Still, things are improving. 

In early 2023, the International Monetary Fund (IMF) projected that global growth would fall to 2.9 percent that year but rise to 3.1 percent in 2024. While both figures sit well below the 3.8 percent historical average, they represent a major comeback from the contraction triggered by the pandemic, which saw growth fall to –4.9 percent in 2020. 

Much of the economic comeback stems from a combination of newfound stability, increased ecommerce activity and innovation. More people than ever now shop online, partly because of the pandemic. At the same time, digital technology, automation and communication have made international collaboration much easier and more efficient. 

We can’t forget strategic political change, either. For example, India, China and parts of Southeast Asia have eased trade barriers since the pandemic to promote foreign investment and stimulate economic recovery. Collectively, reduced tariffs, simplified customs procedures and better market access have created a better environment for business owners looking to gain a global foothold. 

What is a global expansion strategy? 

Global expansion strategies are detailed roadmaps designed to help businesses enter overseas markets and establish a strong foothold as quickly as possible. 

Most international expansion strategies include these main elements: 

• Market analysis. Where might you have the best chance for success and where does your business sit in the landscape? 

• Entry plan. What makes your brand unique, who are you targeting and how will you break into the market quickly? 

• Company structure. How will you organise your business in the new region (for example, who do you need to hire or persuade to relocate)? 

• KPIs for success. Which metrics will help you track your strategy’s effectiveness over time? 

  
  

These four points are just a general guide. Speaking with a local business consultant can give you a clear idea of what to expect and how to maximise your chances of success in a new region.  

Six of the best international business expansion strategies 

We’ve examined the global business resurgence and gone through a few international expansion basics; now, let’s get specific. Here are six potential ways to grow your company abroad. 

Strategy 1: Exporting 

Exporting is one of the most cost-effective tactics for international expansion. It’s also big business: in 2023, UK companies exported a whopping £861 billion in goods and services, with 41% of those going to the EU. 

On paper, exporting is relatively simple: you find overseas distributors and sell them your products at wholesale prices, or sell products directly to consumers in other regions. You don’t need to set up a physical presence abroad or hire new staff. 

In most cases, export strategies are fairly low risk. However, you'll need to familiarise yourself with export licensing rules to ensure you stay compliant. Companies exporting animals and animal products, chemicals, drugs, medicines and medical devices, and plants and plant products all need to obtain licences before shipping products abroad. 

You’ll also need an Economic Operator Registration and Identification (EORI) number to make customs declarations. If you plan to export goods to multiple regions, you may need more than one EORI number. To learn more, visit GOV.UK. 

Strategy 2: Licensing 

A licensing agreement can help you test a new market without committing to a permanent presence (yet). Instead of establishing a new business in another country, you licence the use of your intellectual property in exchange for a fee, or royalties.  

Licensing is common in the fashion, software and pharmaceutical industries. For example, you might see the words “officially licenced” on an item of branded clothing or footwear.

Some companies use licensing to test their brands in new markets before launching full-scale expansion plans. This can be a clever strategy, as it minimises risk and doesn't require a large upfront investment.

Strategy 3: Franchising 

Franchising is similar to licensing – but there are important differences between the two business models.  

Franchising helps a business expand by granting a franchisee the right to operate under its brand and business model, offering ongoing support and control over operations.  

In contrast, licensing typically involves granting permission to use intellectual property, like a logo or technology, without the same level of control or ongoing relationship between the parties. 

Restaurants and hotels often operate a franchise model across regions – Starbucks, McDonalds or Marriot hotels, for instance. If you’re in the hospitality industry and want to expand abroad, franchising could work well for you. 

Strategy 4: Partnerships and joint ventures 

In a partnership or joint venture, you enter a new market by collaborating with a local business. This means working together with a company that already operates in that market, leveraging the firm’s existing local expertise and resources. 

Taking this approach can help you reduce risk and navigate cultural nuances and unfamiliar regulations. Partnerships can also streamline operations by providing quicker access to supply chains, customer bases and distribution channels, helping your business grow more efficiently in the new region.  

Usually, partnerships and joint ventures involve some degree of shared ownership, responsibility and profit. Before moving ahead, it’s important to make sure your goals align with those of the other business and that you identify any conflicts of interest. Speaking with an experienced business advisor can help you come up with a personalised partnership strategy. 

Strategy 5: Buy and build 

Buy and build is the business equivalent of Monopoly and Lego in one. Following this strategy, you acquire new businesses abroad with the eventual goal of combining them into a large, valuable enterprise.  

One of the biggest advantages of a buy-and-build strategy is rapid access to a new market. Rather than building a new business from the ground up, you purchase an existing company along with all its assets, including local talent.  

Still, buying an overseas company is no small feat. Before moving ahead, we recommend seeking advice from an experienced business strategist and a knowledgeable international lawyer. The right team can help you safely navigate the legal and logistical complexities of a buy-and-build strategy. 

Strategy 6: Traditional expansion 

Last, but not least, let’s talk about traditional expansion. Simply put, this means establishing a physical presence – a subsidiary or branch of your company, for example – in your target country. It’s arguably the most expensive and risky form of foreign direct investment (FDI), but it can give you greater control over operations, brand image and customer experience. 

Building an overseas business from scratch can take years and cost a lot of money, making it a challenging option for small business owners. Nevertheless, with the right financial backing and long-term planning in place, traditional expansion can produce enormous rewards. 

Six key steps to international expansion 

If you’re ready to begin exploring international expansion, these six steps offer a helpful planning framework. For an in-depth explainer, read our guide to starting an international business. 

Step 1: Start with market research 

Begin by conducting thorough market research to understand the Total Addressable Market (TAM) and Serviceable Available Market (SAM). This will give you a clear picture of the potential demand and whether your product or service has room to thrive in the new market. 

Step 2: Look for local advice 

Seek advice from local business experts, consultants or government trade organisations who are familiar with the region. Their insights will help you navigate regulatory requirements, local competition and cultural nuances more effectively. 

Step 3: Select a market entry strategy 

At this stage, you’ll likely be ready to choose a market entry strategy. Consider the risks, costs and potential for growth when evaluating which strategy aligns best with your goals. 

Step 4: Customise your product or service 

Adapt your product or service to meet the specific needs, preferences and cultural differences of the local market. You might decide to modify features, packaging or even the marketing message to better resonate with the local audience. 

Step 5: Hire the right team 

Building a strong local team is crucial for success. You can either hire experienced local talent who understand the market or send trusted members of your existing team who can help establish operations and company culture in the new region. 

Step 6: Launch your business 

Once everything is in place, launch your business while keeping a close eye on critical KPIs like sales growth, market penetration and customer satisfaction. These metrics will help you evaluate performance and make essential tweaks to your market strategy. 

Working with an experienced multi-currency partner 

We recommend speaking with a business consultant familiar with the country you’re planning to target before committing to an international expansion strategy. A personal consultation can help you spot opportunities and prepare for threats in advance. 

You’ll also need an experienced international payment partner to help you send funds, collect payments and take care of payroll abroad. Some business owners use their existing bank accounts to send cross-border payments, but many find transaction fees and exchange rates expensive – especially over time. 

One alternative option is an Interpolitan multi-currency business account. Built for global convenience, our accounts not only let you transact in more than 55 currencies, but also come with personal service as standard. Instead of speaking to a chatbot, you’ll get support from a dedicated relationship manager via phone or email. 

With no minimum balance or UK residency requirements, Interpolitan business accounts make it easier to expand abroad and stay financially flexible across jurisdictions. To learn more about multi-currency accounts from Interpolitan, contact us today.