Internationalization of a company is a transformation journey
Internationalization of a company is a venture that can take you through the full spectrum of emotions – from captivating excitement to deep despair.
However, nothing compares to the feeling of seeing the fruits of your years of hard work! Before that, you’ve likely gone through various phases, not all of which are positive.
Finnish companies are moderate in terms of growth and internationalization on a global scale. Luckily, we also have those who look further afield and are eager to expand into new markets.
New market expansions are appealing for many reasons. The best reasons are based on solid analytics and local understanding. However, sometimes the motivations might be weaker – for instance, entering Sweden because it’s nearby or because the company speaks Swedish. Or heading to Spain because the golfing weather is great, even in winter.
When internationalizing, at least the following aspects should be taken into account:
1️⃣ Adequate data analysis is a critical factor for success.
There is plenty of information available, especially as AI has accelerated its accessibility. However, what truly matters is how this data is used, what conclusions or assumptions are drawn from it, and the quality of the analysis that supports decision-making.
One common pitfall is relying on domestic market data and insights when analyzing a new market. It’s crucial to consider how well the Finnish market structure or consumer habits scale outside Finland’s borders. Also, how well do you know the competitors in the target market, who might operate entirely differently from what you’re used to in Finland?
2️⃣ Process changes are essential.
Companies focused on domestic markets may be surprised at how much internationalization demands process adjustments and how significant the impact is on the entire company, including domestic operations.
For example, simply changing the company’s primary language to English challenges nearly all internal functions – system and report languages, internal and external communications, staff language skills, etc.
Additionally, ensure that processes can scale to larger operations and new markets in advance.
3️⃣ Invest sufficiently and be patient.
Companies generally understand that expansion requires investments. However, they are often overly optimistic about how much money and resources are needed and the timeframe for investments to pay off.
A good rule of thumb is that it takes at least two years from the actual start of operations. A year is typically spent on analysis, planning, and construction, and it’s about a year after operations commence before the first sale occurs. Patience is required – from both implementers and investors. The process can be accelerated, but it can quickly become very expensive.
4️⃣ Focus on local expertise.
While we Finns value our expertise, products, and honesty, customers in other countries won’t automatically share this view. Local leadership must always be local. A deep understanding of the culture, customers, and markets is crucial for success.
The internationalization strategy can be managed from the headquarters, but the operational execution must always be local.
Internationalization affects the entire company culture and challenges the organization to view things from new perspectives. Internal growth is about more than numbers – the company elevates to a new level.
Ensure that your team has sufficient expertise, enthusiasm, and perseverance – and above all, the adaptability, confidence, and desire to play in a new league.
Kasvutoimisto IHME is here to help you clarify your company’s goals and create a path to achieve them.
Whether you need support in internationalization or a sparring partner to tackle everyday challenges, we are here for you.
