Explore 5 essential data sources to guide your transnational business strategy. Learn how to assess market potential, economic health, internet access, payment preferences, and regulatory environments for successful global expansion.
Building a global brand can give you a big competitive advantage. Savvy business leaders understand the importance of making strategic decisions based on data. With so much information available online, how do you know which data will guide you to make the best decisions for your global expansion?
In this guide, we’ll examine a few data sources that can help you build a transnational strategy.
A transnational strategy is a type of global business model where a company’s activities are coordinated between its domestic headquarters and one or more international outlets. There’s an overarching organizational structure: one center of operations controls the decision-making and supply chain of the company.
Transnational companies are defined by two qualities:
McDonald’s and Nestle are successful global companies now, but they started small: by examining market trends and data sources to build a transnational strategy.
Here are five of the most important data sources to help with your transnational marketing strategy.
When building a transnational strategy, start with markets where you have a good chance of success. The easiest starting point is a foreign market that already speaks your language. For example, if your company is headquartered in the US, consider branching out to the United Kingdom, Canada, or Australia.
After you’ve successfully gained market share in other English-speaking countries, consider expanding to countries with high levels of English language proficiency. Click here to access the EF English Proficiency Index, which ranks countries according to their levels of proficiency in English.
It’s helpful to consider the purchasing power of your potential local customers. You can view GDP rankings for international markets at World Population Review or Statistics Times.
GDP is the overall value of goods and services produced in an economy. According to Harvard Business School, it’s a good sign when GDP is growing, but there’s some nuance. If a country’s GDP isn’t growing as fast as the population, per capita GDP isn’t rising. This means the purchasing power of the locale isn’t increasing.
Different countries come with varying levels of internet access. The higher the percentage of internet penetration within a country, the more likely it is for people to pay for things online. An excellent resource is Internet World Stats.
Take Afghanistan and Singapore, for example. Afghanistan has around 7.3 million internet users, while Singapore has about 5 million. Do you think Afghanistan represents a better marketing opportunity than Singapore? It depends on what you’re selling, but in most cases, the answer is no. If you look at the rate of internet penetration, you will see that Singapore, with 84.5% penetration, is a far superior market to Afghanistan with just 19.7% penetration.
Think about your pricing and payment options. Some payment types, like credit cards, may not be available in other locales. When expanding into a new country, you will likely need to add other forms of payment. If this isn’t something you can easily do, you may need to initially stay in countries where you can accept payment.
When it comes to credit cards, Global Economy provides data showing the percentage of credit card users in each country. You might be surprised to discover that some countries – Canada, Israel, Norway, Luxembourg, Japan – have much higher levels of credit card usage than the USA.
Most countries have laws and regulations that apply to global companies in their local market. In some places, these regulations can be challenging to navigate. An excellent resource on this topic is the World Bank. Their data set informs how difficult it will be for you to operate in a given market. The site also provides insight into hard it will be for your potential customers and partners to do business with you.
Investment decisions on a global scale need to be informed with reliable external data. Internal data can be helpful, but you should avoid making global strategy decisions based on internal data alone. For example, if a particular country is leading a disproportionate rate of traffic to your site, there could be a variety of reasons for this:
These are just a few of the indicators you can consider when building your transnational business strategy.
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