International Banking · July 17, 2020

How to Build an International Business Expansion Strategy

As supply chains become increasingly global, their complexity increases—as do the potential hurdles that companies face when managing them. Fully understanding the risks and rewards of an international business expansion strategy will help you determine if you should pursue international growth.

Reasons to expand internationally

Businesses with core competencies in the US likely have customers who want to leverage those same capabilities in other markets. Expanding to the same international markets that your customers are operating in may lower the risks associated with expansion, because you'll be serving a pre-built customer base.

The rise of e-commerce has made global manufacturing and distribution more necessary—online retailers need to meet the needs of a worldwide customer base. If you serve manufacturing or retail customers in the US, there may be similar opportunities in other countries. There may be a particularly pressing need for high-quality service providers in developing countries where the middle class is growing at a good pace, making those markets attractive to companies that can fill that need.

Form a foundation before you leap

Before pursuing an international business expansion strategy, it's important to have internal infrastructure and systems in place to run your operations smoothly, or issues resulting from a complex supply chain may be greatly magnified abroad. Therefore, you need to strengthen your internal operations first by ensuring your supply chain is running as efficiently as possible, so it can provide a model for your overseas operations.

In addition, it's a good idea to ensure that good communication protocols are in place. How does the information flow to identify and resolve issues, and who is responsible for what? Consider implementing virtual tools to foster collaboration across remote teams. In addition, take the time to understand the local vernacular in the region where you're expanding—words can carry different shades of meaning in different cultures, and having a firm grasp on these differences will help you share information in the best way possible.

Finally, you'll need to ensure you have sufficient growth capital to fund international expansion.

Potential pitfalls and challenges

Poor infrastructure and a shortage of skilled labor are major challenges in international expansion, especially in high-growth, developing markets. Low wages, a more concentrated economy and fewer technology resources add more challenges.

For more mature markets, such as western Europe, higher transportation-related costs such as fuel, tolls and regulations can create a higher financial burden. Employees in these countries also typically command high salaries. None of these issues are insurmountable, but you need a well-thought-out plan you can test to ensure that you're prepared for them.

Build success through careful planning

Before you seriously pursue international expansion, you'll want to build relationships with prospective customers and local business owners. Onboard an agent or employee—or a partner with an individual or business—who has strong business relationships and a deep knowledge of the logistics industry in your target country.

It's also a good idea to create a detailed analysis for your expansion. Determine what the market potential is for your business and how much time, effort and capital is likely needed to achieve that objective, and outline these in your documentation. The analysis should also identify what resources you have, and compare those to the resources you need.

Using the information and documentation output from these first steps, determine your strategy. You can build the new international business organically—in other words, from scratch—or partner with someone on the ground in the new location. Alternatively, you could acquire another company and re-brand that firm as yours.

With the pervasiveness of social media, you might choose to partner with influencers on your preferred social channels. These voices can help build trust in your brand throughout the region you're expanding into.

Finally, whatever route you take, remember to adhere to all the national, regional and local laws. Be mindful of the cultural differences, as well, so you ensure the process flows as smoothly as possible.

The international business expansion strategy can be a profitable path for growth, but the process has a number of moving parts. By remaining flexible yet focused and finding one or more key individuals or partners, you can take your logistics business to the next level overseas.

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Base Rewards Tier: Earns (i) one (1) point for each dollar you spend for net retail purchases (gross retail purchases less any returns or credits), (ii) three (3) points for each dollar you spend for net retail purchases in the follow rewards category: gas stations (2 additional points on top of the 1 point per dollar earned on net retail purchases), (iii) two (2) points for each dollar you spend for net retail purchases in the following rewards categories: restaurants and travel (airlines, auto rental, and lodging) (1 additional point on top of the 1 point per dollar earned on net retail purchases).

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Each reward dollar is worth $1, which means that $100 reward dollars equals $100 in redemption value. Redemptions start as low as $25 rewards dollars.

You may redeem reward dollars back into other First Citizens banking products:

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Cash back and account credit redemptions must be completed through the program website, however a statement credit back to your First Citizens Card can also be redeemed through the First Citizens Rewards Call Center. The redemptions will post within 2 to 8 business days. No First Citizens card or mortgage account credit will be applied, in whole or in part, against any monthly minimum payment due, however, account credits to your First Citizens consumer loan will be applied first to your outstanding interest and any remaining amount will be applied to your principal.

You may redeem rewards dollars for account credits to be deposited to your First Citizens checking or savings account or applied to your First Citizens credit card, consumer loan or mortgage.

You may use reward dollars for a Pay Me Back® redemption, meaning a statement credit for the corresponding dollar amount will be applied to your First Citizens Rewards card that was used for the purchases over $100. Some exclusions apply to certain categories of transactions. No statement credit will be applied, in whole or in part, against any monthly minimum payment due.

Program rules are subject to change or cancellation without notice.

Earning Points

At the Base Rewards Tier, you will earn 1 point for each $1 you spend for all net retail purchases (gross retail purchases less any returns or credits). Earned points are calculated on actual dollars spent rounded up or down to the nearest point. Points will be deducted from the available rewards account balance for all returned purchases.

At the Base Rewards Tier, cardholders may earn up to 10,000 points per calendar month. Points earned are available for redemption for a 3-year term. After the 3-year term, points expire and can no longer be redeemed. Points expiring during the year will be cleared from your Program Account on the last day of the month in which they expire.

Redeeming Points

Each point is worth $0.01, which means that 100 points equals $1 in redemption value. Redemptions start as low as 10,000 points. All rewards redemptions can be made through the First Citizens Rewards Center by telephone or through the program website. Some limitations apply.

You may redeem points back into other First Citizens banking products:

Cash Back to an existing First Citizens Bank checking account, savings account or credit card account
Account credits towards a First Citizens personal loan or mortgage

Redemptions are also available for retail gift cards and certificates, donations and merchandise.

These Terms are only a summary. Other restrictions and requirements apply. The full First Citizens Rewards® Program Rules will be provided upon enrollment and are accessible through the program website at FirstCitizensRewards.com at log in.

Program Rules are subject to change or cancellation without notice.

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How to Build an International Business Expansion Strategy

Reasons to expand internationally

Form a foundation before you leap

Potential pitfalls and challenges

Build success through careful planning

Financial insights for your business

Bonus Offer

Earning Points

Rewards Redemption

Bonus Offer

Earning Cash Back

Rewards Redemption

Bonus Offer

Earning Points

Rewards Redemption

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