Director, International Trade and Commercial Finance
A New Frontier: A POV on Global Expansion
For forward-thinking middle-market companies in the US, the allure of going global is enticing—and for good reason. Expanding overseas can offer a host of benefits, from boosting profits to offsetting seasonal and economic fluctuations to increase brand visibility. However, as with any trip abroad, preparing for the undertaking requires a few things: a curious mind, a realistic game plan and access to resources that can help you make the most of the journey.
American products and services are in greater demand worldwide, making global expansion attractive for some U.S. middle-market companies. When selecting a country for expansion, what are the top issues companies should be investigating about that market and why?
There are a number of specific issues that companies should examine, but none are as important as a clear framework to approach their expansion. Selection of a particular market requires country-specific information including:
- In-depth analysis of recent events
- Trends in market demand
- Understanding who the local players are, which can be done by participating in local trade shows, professional associations and distribution channels
Import and export information on foreign companies is usually available and can prove a terrific source of direct leads. Equally important, is understanding:
- The country as a market
- Product-specific customs regulations
- Foreign currency
- Sovereign risk implications
- Cultural differences.
In general, working with reliable local partners and using services already available for American companies can prove to be beneficial as well. Expanding internationally may seem daunting for small and medium-sized companies, but chances are: if you’re competitive in the U.S., you can be competitive abroad.
Are there any uncertainties or obstacles that companies often overlook while preparing to expand globally?
One area U.S. companies can learn more about is the effect foreign currency risk can have on their bottom line. Many foreign companies are comfortable being paid in USD because the dollar is a historically stable trade currency that won’t depreciate much. However, this same characteristic can make the dollar a riskier and more expensive currency for a foreign client. Being able to price goods or services in local currency can provide a leg up for an American company competing with local players.
On a personal level, what emerging international markets are of interest right now, and why?
Brazil is a very interesting market for investors right now. Many people will agree that investing there today has become riskier given the current economic and political crisis. However, the market has advantages: Brazil is the largest country in South America, with about 200 million inhabitants. It is ranked the 9th country by GDP in the world, ahead of Canada, Russia and Australia. It also has an abundance of natural resources and a strong agribusiness sector, making it one of the largest producers of commodities.
The information provided herein by Santander Bank, N.A. is for general informational purposes only. Statements or information contained herein or in the Santander Trade Portal, the Trade Network or the Trade Club (collectively, the “Trade Sites”) do not constitute endorsements of Fortune Magazine, any participant of any Trade Site or any content therein. Nothing contained herein or therein creates any client, advisory, fiduciary or professional relationship between you and Santander Bank, N.A. or any affiliate thereof. No Santander entity is engaged in rendering auditing, accounting, tax, legal, advisory, consulting or any other professional service or advice to you. Finally, the information contained herein or in any Trade Site should not be considered a substitute for your independent investigation or your sound technical business judgment after consulting with your own professional advisors.
Santander Bank, N.A. is a Member FDIC and wholly owned subsidiary of Banco Santander, S.A. © 2017 Santander Bank, N.A. All rights reserved. Santander, Santander Bank and the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners.