Effective networks are vital for successful international expansion

Despite a shifting geopolitical landscape, the global economy remains highly interconnected – and for many businesses across numerous sectors, international expansion is a critical component of successful growth.

Political or trade instability makes it so important that businesses looking to grow overseas understand the factors that influence success or failure.

Businesses tell us that it is easy to make costly mistakes when expanding internationally. Shortcuts, while attractive, are dangerous. A common language might suggest an easy transition into a new market, for example, but regulations, legal systems and business practices could still be very different.

That’s why the use of effective networks is vital to making the correct decisions about expansion and then in succeeding in new markets.

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Noor Adhami, Head of Global Network Banking, HSBC

All eyes on international

For our ‘A Global Advantage’ study, released in February, we spoke to more than 1,100 large corporates and mid-market enterprises that had either a footprint outside their home market or exported internationally.

Their point of view is clear: practically all (96 per cent) leaders say international growth is important to their business – and 77 per cent think this importance will increase over the next five years.

Our study found that, while exploring international growth, many businesses seek out close relationships with distributors, customers, suppliers and consultants, and also value strong connections with trade associations and governments, which help to foster trust and legitimacy.

But for small and medium-sized firms in particular, building such networks can be difficult, costly and carry significant risks.

To be effective, a network should enhance market knowledge, foster collaboration and provide access to opportunities.

The best networks can sense-check strategic decisions by a business, particularly when it concerns something as risky as entering a new market. Experts within a strong network can explain why certain businesses or products succeed or fail, saving valuable time and resources.

That’s where HSBC can play to its strengths. We’re an international bank that is at home in more than 50 markets and has been helping clients expand internationally for 160 years. Our blend of global and local expertise enables us to support businesses of all sizes to grow with confidence.

HSBC’s global reach and long experience of international trade mean we have a powerful financial offering, but where we truly stand out is through the deep roots we have established in markets.

This gives us the ability to support clients with critical non-financial network factors, like local market and regulatory knowledge, as well as being a super-connector through access to one of the world’s largest financial networks: our 1.3 million business clients and partners.