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The Challenges Of Expanding Business Globally

Going global for any business means an increase in potential customers which leads to more sales hence more profit.

This has been made easier with the internet and e-commerce being one of the most rapidly growing form of business. The internet is now accessible to most people even in developing countries.

However, challenges faced by businesses going global does not get any less with the fact that the internet is a global market. Trading policies and political involvement still affect this move and limits some companies from effectively taking root in new geographical areas. Here are some of the biggest global companies and challenges they face as a result of their expansion.

Uber

This transport networking business was first founded in March 2009 and later on went live for the first time in San Francisco in July 2010. Since then Uber has penetrated the international market due to demand becoming one of the biggest company of its kind in the world.

However, as much as the global movement has shown a proper percentage increase in revenue, uber faces similar challenges as with other global companies. This mainly includes competition with the local markets.

In Sub-Saharan Africa, Taxify has proven to take uber head on. Other challenges also include unreliable internet connections in some of the developing countries and regulatory challenges in countries like France.

Netflix

In January 2016, Netflix caught most people by surprise when it announced its launch in close to 130 countries in one day. Since then Netflix has become one of the biggest household names when it comes to entertainment. It has linked its success to effective use of data analysis plus other research experiences.

One of the biggest challenges that Netflix faces in the global market is the growing use of VPNs like PIA (Private Internet Access). Though it might have included a burn of the use of VPNs for unblocking in its terms and conditions, it has not yet effectively made this policy quite useful. This may be seen as it faces a challenge due to the increase in number by its subscribers and people having more cybersecurity knowledge and other hacking skills.

Amazon

Amazon is the leading e-commerce business in the world with its founder Jeff Bezos being recently named the world’s richest man. The company is expanding quite fast with one of its biggest aim being bringing the products closer to the consumer.

As much as Amazon is seen to have a good percentage increase in revenue, the right amount of these revenue comes from a handful of countries that the company has penetrated. These countries include Canada, North American countries, Germany and Japan. Other parts have registered loses questioning if it is essential for Amazon to be in such areas.

Other challenges that have limited the growth of Amazon in other global markets include consumer’s trust and reliability in retail chain stores rather than e-commerce.

Spotify

Spotify has grown from a small startup in Stockholm to a company with over half a billion users and over 1500 employees across the world. People pay to stream music, and users are also paid for the content they upload. This has been seen as a great economic stepping stone for musicians and other content creators and distributors. Its main aim has always been going global as the music industry is global. It has been seen to penetrate robust markets such as Japan because of its localisation strategy.

However, one of the challenges that face Spotify is its mode of payment and how much control the artists have on how listeners get to listen to their music on Spotify. Should it be entirely free or the artist can put some restrictions in some countries to be able to collect more royalties for their music? This is yet to be balanced given that regulations between free and paid music are yet to be streamlined.

Shazam

Founded in 1999 and officially launched in 2002, Shazam took close to 14 years to register its profitability finally. With over 30million users and over twenty different languages being recognisable with the app, the company has a vast database to manage with free subscribers all over the world.

One of the biggest challenges that ever faced this company was to grow from a startup app company with a small office in New York to a profitable company even with over a million users from different countries. Most of its capital coming from angel investors and venture capitalists, the company was able to sustain its growth. It has partnered with several prominent companies such as Apple, Facebook and other ringtone companies, earning them a large amount of money while itself struggling to make profits. The founders took some time to discover the best profit model to work with which has wholly paid off.

Conclusion

The global market can have its limiting factors, but when one does their research well, they should be sure to find safe ground and grow as Shazam eventually did. Some specialists look into such transitions to allow companies to find a silver lining.

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