Business of the present world is going close to closer with the exception of very few security-related applications, practically all other projects, services, and systems now can come from, or go to, any country. In our building services sphere, maybe there aren’t screw compressors manufactured in Tokyo for an office building in Houston, nor is there a chilled water system being completely designed in Beijing for a district cooling plants in Chicago, but it won’t be long before these also become everyday realities. It should be clear to the executives within your organization that the writing is on the wall. If you don’t go to the international markets, they will be coming to your domestic market, and they will come very soon.
a) Seek opportunities for growth through market diversification.
b) Earn higher margins and profits.
c) Gain new ideas about products, services, and business methods.
d) Better serve key customers that have relocated abroad.
e) Be closer to supply sources, benefit from global sourcing advantages, or gain flexibility in the sourcing of products.
f) Gain access to lower-cost or better-value factors of production.
g) Develop economies of scale in sourcing, production, marketing, and R&D.
h) Confront international competitors more effectively or thwart the growth of competition in the home market.
i) Invest in a potentially rewarding relationship with a foreign partner.
At the broadest level, companies internationalize to enhance competitive advantage and to seek growth and profit opportunities.
Companies considering international expansions should evaluate the costs benefits of partnering with local companies versus doing it alone. One of the most important items they should take into consideration when evaluating such alliances is the potential conflicting interests of their partners. A reoccurring conflict of interest I have seen in similar cases was that the local entity may want to partner with a foreign company to go global, while the aim of the foreign company is the opposite: focus on the local market. So be aware and clear on what your interests are, as well as your partner’s from the beginning to avoid such misalignments in business objectives.