There has been nothing as positive and predictable as the growth of international business. World trade volume today is roughly 45 times the level of 1950. (4,500% growth from 1950 to 2022).  Despite the occasional dip due to economic recessions and Covid-19, selling into new markets, and expanding middles classes has benefitted both sellers and buyers.

While companies around the world have benefitted by selling into emerging markets, none have benefitted as much as U.S. companies. Given that U.S. companies have access to the world’s largest market “in their backyard,” it’s important to understand the seven (7) primary reasons why American companies increasingly turn to exporting as a means to grow their business:

Increased sales and revenue: International business offers U.S. companies access to a larger customer base and significantly increases sales and revenue. By targeting international markets, American companies reach customers who may have different needs, preferences, and purchasing power. This expanded customer base contributes to overall business growth.

Higher profitability and favorable pricing: Exporting by U.S. companies can lead to higher profitability as selling into markets with greater demand can command premium prices, thereby boosting profit margins. American companies can take advantage of favorable exchange rates to deliver their products affordably into foreign markets.

Market diversification: By expanding into international markets, American businesses reduce their reliance on a single domestic market. This diversification helps mitigate risks associated with economic downturns in the U.S., changes in consumer preferences, and regulatory changes. It allows American companies to capture new growth opportunities and to establish a more stable revenue stream by tapping into multiple markets with varying levels of demand.

Competitive advantage and brand building: International business exposes U.S. companies to different competitive environments, stimulating innovation and helping them develop a competitive edge. By operating in diverse markets, American companies gain insights into consumer behavior, market trends, and emerging technologies, allowing them to stay ahead of competitors.

Enhanced financial opportunities: International business offers U.S. companies access to a broader range of financial opportunities. Companies can attract foreign investment or secure funding from international financial institutions. These financial resources can fuel business growth, support expansion plans, and provide the necessary capital for research and development, increased production capacity, and/or marketing campaigns.

Risk mitigation through global presence: Having a global presence allows U.S. companies to spread their risks across different markets. When challenges in one market impact business operations, having a presence in other markets offsets those risks. This diversification reduces the vulnerability of a company to economic, political, or regulatory uncertainties and provides a level of stability and resilience.

Increased brand visibility and reputation: Exporting enhances a U.S. company's brand visibility and reputation globally. A successful export strategy helps establish a company as a global player, demonstrating its ability to meet international standards and customer expectations. This brand recognition and reputation can translate into increased credibility and trust in the U.S. domestic as well as ever-expanding international markets.

Selling into international markets requires careful planning, market research, understanding of trade regulations, and adaptation to cultural differences. SRK Affiliate offers comprehensive market entry assistance to companies wishing to enter the world’s most populous market, India.  To date, we have assisted over 2500 U.S. companies with market entry services. For further information, please contact Supriya Kanetkar: srk@srkibconsultants.in