As global economic headwinds veer from tough to positively threatening, the temptation to turn inward is all too tempting for many companies. The relatively easy growth of the past 10 years, riding on the back of the most powerful economic force of the past 200 years – globalization – may seem a thing of the past.
International expansion is still the business imperative
However, the reality is that the latest round of economic turmoil makes international expansion imperative, rather than something that’s nice to have. Domestic demand in Europe and the US has stalled, meaning foreign expansion may no longer just an additional source of top-line growth – but the only route for companies to hold their current earnings position.
Businesses’ own customers are feeling the pressure too. This is forcing them to push down hard on their suppliers who need to have the tactics to respond. Customers are demanding simplified global arrangements from suppliers in order to deliver operational efficiencies and savings to their own P&L’s. If suppliers are not ready to adapt, they risk losing not only new global opportunities, but also their long-term domestic contracts, to more aggressive foreign competitors.
These factors mean that expansion into foreign markets – both for sales and service delivery reasons – is a factor that needs to be foremost in companies’ strategy during times of economic uncertainty.
TMF Group de-risking overseas expansion
So how can companies successfully address these international challenges, but also retain control over the potential risks of continued operation or expansion in foreign markets?
At TMF Group, I have been working with internationalising business for over 15 years, helping all sizes of company take on the challenges of outbound investment. Working with our thousands of accountants, corporate secretarial and HR professionals around the world, TMF has refined its services to give companies of any size the ability to meet these challenges and control many of the associated risks. Below are some of the solutions we use, tailored to different needs. These include:
1. How we enable domestically-strong companies to project their services on the global stage in a way that enables them to achieve growth despite a tough business environment
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2. Where we can mitigate clients’ risk in relation to the investment involved in international expansion, enabling them to quickly expand, or contract, as necessary depending on their own success
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Underpinning both solutions is helping clients to de-risk international expansion through TMF Group’s incredible global compliance platform.
Armin Kirchner is Global Head of Corporate Services at TMF Group. If you would like to talk to him about your business’s international needs, please contact him.