Advantages & Disadvantages of a Global Strategy
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 6, 2021
Advantages & Disadvantages of a Global Strategy
Advantage: Expand Your Target Customer
The U.S. economy is big enough to accommodate thousands of small businesses, but
that doesn’t mean that you shouldn’t be looking for ways to extend your reach to a new
group of consumers. If you’ve targeted your customers properly, your ideal consumer won’t
change when you decide to promote your products and services to the international
market. More importantly, you can market to your overseas customers using social media
platforms and your website content, which cuts down on marketing expenses. When you
access the international market, you have new branding opportunities that can help your
products and services attract new customers and prospects.
Disadvantage: Challenges of Foreign Culture
Although a global strategy can help your company attract a new customer base, the
drawback of this strategy is that cultural differences in other countries can derail your
marketing efforts. For example, some Arabic countries don’t allow certain types of
advertising, so if you own a fitness company, you may not be able to market your products
in any way that suggests sex appeal. There is also the challenge of language differences that
can skew your marketing message if you don’t hire expert translators that live in the country
where you’re doing business.
Advantage: Diversifies Your Business
When you tap into an international market, it helps to offset any losses that you
might suffer during an economic downturn on the domestic front. Establishing a thriving
business overseas can sustain your domestic-based business long enough for the economic
situation to correct itself.
Disadvantage: Financial Risk
Although diversification is always beneficial, the disadvantage of setting up your
business on the international front is that it can still be an expensive investment. Setting up
your business overseas requires a significant amount of time, effort, and research of the
local market.
One of the biggest expenses is finding expert, local talent that you must train so that
they understand the vision and culture that your business wants to promote. Then you will
also have to handle foreign employment contracts, compliance regulations, and the nuances
of obtaining approval for any domestic employees that you want to send over to help get
your overseas business up and running.
Opens New Markets
Interest in American products and services has always been high, but access to those
products and services was often limited. In the digital age, however, many small businesses
are creating services that customers can download regardless of where they are located.
More importantly, the cost of shipping physical products to faraway destinations is no
longer the problem it used to be because of a large number of delivery services that are
available to small businesses. This means there are far fewer barriers for marketing to
international prospects than there were even 20 years ago.
For example, a small comic book shop in Los Angeles that specializes in manga-style
comics can exploit the Asian market through social media campaigns and website content,
thereby opening a new revenue stream, while still marketing to the same target audience as
it does in the U.S.
Opens New Markets
Interest in American products and services has always been high, but access to those
products and services was often limited. In the digital age, however, many small businesses
are creating services that customers can download regardless of where they are located.
More importantly, the cost of shipping physical products to faraway destinations is no
longer the problem it used to be because of a large number of delivery services that are
available to small businesses. This means there are far fewer barriers for marketing to
international prospects than there were even 20 years ago.
For example, a small comic book shop in Los Angeles that specializes in manga-style
comics can exploit the Asian market through social media campaigns and website content,
thereby opening a new revenue stream, while still marketing to the same target audience as
it does in the U.S.
beneficial, there are several perils involved in this effort. First, you must understand
that political differences can affect your success or failure. For example, some countries will
not allow you to use technology or equipment made in countries with which they have
conflicts.
Second, language differences can cause problems through miscommunication. To
prevent that from happening, make sure you have expert translators, who live in the
country where your business is expanding. Third, make sure you understand the culture
before you plan a marketing campaign. In some Muslim countries, for Establishing a strong
niche in the domestic market is essential if your business is going to survive, but expanding
your reach overseas is vital if your company is going to thrive. While it’s true that there are
advantages and disadvantages of entering international markets, the benefits may outweigh
the drawbacks. In the old days, it was much more difficult to gain a foothold in the foreign
market because of prohibitive shipping costs, problems with communication and the lack of
adequate technology. That’s no longer the case, however, and the importance of
international marketing has never been greater. Your business can reap some of the
rewards with the help of social media channels and the explosive growth of e-commerce.
With the recognition that target audiences want and need the same products and services
regardless of borders, there are numerous advantages of foreign marketing.
example, you can’t use women to promote your products or services. Establishing a
strong niche in the domestic market is essential if your business is going to survive, but
expanding your reach overseas is vital if your company is going to thrive. While it’s true that
there are advantages and disadvantages of entering international markets, the benefits may
outweigh the drawbacks. In the old days, it was much more difficult to gain a foothold in the
foreign market because of prohibitive shipping costs, problems with communication and the
lack of adequate technology. That’s no longer the case, however, and the importance of
international marketing has never been greater. Your business can reap some of the
rewards with the help of social media channels and the explosive growth of e-commerce.
With the recognition that target audiences want and need the same products and services
regardless of borders, there are numerous advantages of foreign marketing.
Increases Competitive Advantage
The importance of international marketing isn’t confined to increasing revenue and
diversifying assets, it’s also about gaining a competitive advantage. Providing a product or
service that a competitor does not is one of the ways to increase your domestic market
share. Marketing internationally can also create those advantages if you tap into a
consumer base whose needs aren’t being satisfied. For example, let’s say you’re in the
business of printing and selling science textbooks and you discover an untapped market in a
foreign country that has a need for quality textbooks at an affordable price.
You can begin selling your textbooks to this market, and in doing so, you also create
branding opportunities that can pay off in other sectors of that market that learn about your
products and decide they want to take part. Remember, however, that there are
advantages and disadvantages of entering international markets, so research is key. Without
understanding the advantages and disadvantages of entering international markets, your
efforts may fail.
