Why should companies internationalise

23 Sep Why should companies internationalise

Internationalisation is the natural development process of a company, allowing it to take advantage of new business opportunities in the international market.

Internationalisation occurs when a company carries out one or more of the following activities:

• Production happens abroad
• Products are exported and sold abroad
• Partnerships are made with foreign partners
• Capital comes from foreign shareholders
• Production units are created in foreign countries

Internationalisation is an excellent opportunity to do business overseas and especially, perhaps, for companies who might be struggling to compete in the domestic market.

The goals that a company pursues through internationalisation are:

• to increase revenue
• to reduce costs
• to find new sales outlets
• to out-source or move business activities
• to optimise the tax burden and tax wedge

In addition, internationalisation can represent the best showcase for businesses interested in finding buyers abroad for their production or for the company itself. These goals can be achieved when one or more of the following circumstances occur:

• When a product is developed that is suitable for one or more foreign markets
• When a particularly appealing business opportunity presents itself
• When there are strong contacts with foreign customers and suppliers
• When there are contacts with potential production partners and with potential foreign capital
• When supplies are needed from foreign suppliers
• When favourable conditions exist to reduce costs (a lower tax burden and lower labour costs)