We live in a world that is growing smaller by the day. The rise of technology has brought us all closer than ever, and it is now possible to connect with someone on the other side of the globe with the simple touch of a button.
This interconnected way of living has, naturally, extended to the way in which businesses trade, grow, and evolve; from the Mexican aerospace industry to thriving export businesses, the economies of nations all over the world are dependent on this global market. Learning to harness what it offers is crucial for the long-term success and future of your business.
What Do We Mean By Global Marketplace?
According to the experts, the global marketplace can be defined as the market in which goods or services created by one country are purchased by one or more other countries. It isn’t surprising, given the current level of technology, that such trading usually involves significant digital processes.
For businesses, the most important element of this concept is their customers. They are the crucial factors in helping companies to turn a profit. The global marketplace has changed the way that businesses operate, especially when it comes to attracting and retaining customers. In the pre-tech model, businesses would typically focus on identifying individuals who may need their product or service, and they would primarily be looking for those customers in the area surrounding their location.
Access to the global marketplace through the digital space, however, has changed all of that. Businesses that export and operate in a wider range of the marketplace tend to grow faster, creating more jobs and bringing in more revenue along the way.
This is largely due to having access to a larger market of potential customers, as well as interactions with a wide variety of economies. In the event of regional economic instability, your business will be able to ride out the waves, resulting in long-term financial success and growth.
What Are The Advantages Of The Global Marketplace?
As we have discussed, the global marketplace can offer significant advantages for businesses, and these include:
Potential For Expansion
Expanding helps your company grow and evolve. Once you have exhausted the target market close to home, the global market offers a whole new range of potential. The location in which you choose to expand will depend largely on your product or service, so thorough research is crucial.
When you go global, you reduce your dependence on just one market, and this can be used to your advantage in times of economic downturn. It also helps to protect you from political instability.
As the old adage goes, you should never have all your eggs in one basket. In the current climate of uncertainty, diversification could be the best way to help your company survive.
By participating in the global marketplace, you can cut your costs significantly by accessing less expensive raw materials, labor, and skilled employees. As with our previous point, diversification can be useful here. If you are operating globally, you are not limited to a single pool of candidates for employees and can switch to cheaper options if required.
Spot New Opportunities
By accessing the global marketplace, you have the chance to spot opportunities that may not be immediately obvious to others—especially if you are in an emerging market. Entering one area also helps you to expand into other regions nearby. For example, an American company expanding to France will be in a perfect position to further expand to the rest of Europe as they grow.
Are There Any Downsides?
As with any business decision, it is important to consider any downsides before you make a decision. Some of the cons to consider include:
If you decide to expand overseas, you will need a clear understanding of the legal framework in place there and any relevant regulations prior to proceeding.
Getting your head around accounting and labor laws should be your number one priority to avoid any misunderstandings or confusion. Alternatively, have a reliable local legal expert on hand to help you navigate and streamline the process.
Each culture has their own set of attitudes, traditions, and customs; one wrong step could cause you serious problems, such as unexpedly losing out on a business deal, due to a cultural mis-step. Once again, a local cultural advisor is an essential investment, so you can avoid any unintended consequences when interacting with people from culturally different backgrounds.
There is no denying that the global marketplace can offer several significant advantages, but as with any decision, it is important to understand both sides of every issue before making any commitments. However, the huge advantages of being able to access potential customers around the world, and to have products sold and shipped to multiple countries, far outweigh the inconveniences that you may need to overcome in the early stages of your expansion.
If you want to learn about Mexico’s main exports, you can do so here. We also cover in detail the topic of what’s happening to US businesses in Mexico and China in this article.