Operating a business in a foreign region

With plentiful opportunities existing beyond domestic markets, it’s much easier these days for businesses to operate on a global scale. Before expanding overseas, however, there are a number of challenges that need to be addressed.

It comes as a surprise to find that there are not more businesses expanding into overseas markets, because the barriers to entry into these markets have lowered considerably in recent decades. With a few clicks of a mouse or taps on your smartphone, you can buy a product today and not realize that it will be shipped to your address from perhaps halfway around the world. The Internet has made the world seem that much smaller and more countries have opened themselves up to trade, so the opportunities do exist. However, before choosing to operate a business in a foreign region, you need to be aware of what it takes to succeed.


As a first step into expanding overseas, identify which market you want to expand into and start doing your research. Market risk is a strong, determining factor and just as you would think twice about entering a domestic market saturated with competitors, you need to do the same in respect of overseas markets, no matter how good a product or service you think you have. In this day and age, a great way to determine viable overseas locations for a business is via the Internet. If you already sell online, identify where the bulk of your international sales is originating and there is a potential market for a physical location.

Assess how to price your product in an overseas market and use the resources available to you at home to conduct in-depth market research. There are many free resources on the Internet for doing so and government agencies with a dedication to trade and commerce have resources to assist businesses seeking to expand into foreign markets.

Getting to know people on the ground in the market you are targeting is essential, not least because it offers an insight into how business is conducted regionally. Take the example Fahad Al-Rajaan, whose background as the head of the largest lender by market value in Bahrain, Al Ahli United Bank, gives him an insight into regional business opportunities. As director general of the Public Institution for Social Security (Kuwait), Al-Rajaan helps decide on investment decisions for the country’s social security system.


Having people on the ground means putting together an international sales team. You have the option of direct hiring, of course, but other options include creating an alliance or partnership with an organization to pool your sales and marketing resources. Another point of entry into an overseas market is to connect with local business organizations. Take the time to visit trade shows in a region that are relevant to your industry or have someone visit them on your behalf.

Cultural and language differences are a big factor to consider when trying to build up business in a foreign market. This is where it helps to know people on the ground in those markets and to hire local staff. Being aware of cultural differences applies equally to any business conducted online. Social media has become a great way of marketing a business to potential new customers, but ensure that your social media marketing is done in the language of the country you are trying to sell into, and recognize that cultural sensitivities apply as much online as they do when dealing with customers face-to-face.

Take into account the different ways in which business is conducted around the world. For instance, a business meeting in the Middle East can seem rather chaotic from a Western perspective, with disruptions likely and negotiations on any final decision protracted. The way in which you greet people differs across the world. Take the example of a country such as Japan, where to shake hands with someone is rare indeed. In contrast, a handshake in an Arab country can be a prolonged and very enthusiastic affair, recognizing of course that it can be largely frowned upon for women to shake hands.

It is crucial to research fully the political and economic environment of the countries or regions in which you want to do business. Is there a stable political environment, conducive to business being conducted in manner that will not be disrupted by sudden political change or instability? What are the growth prospects for the local economy? What are labor relations like and is there a possibility of business being disrupted by industrial unrest?

Recognize the differences between operating in a foreign market and running the same business at home and you are well on your way to success in expanding overseas.



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