Monday, 5 november 2018 | Redacción CEU
Internationalization is not an exclusive privilege of large companies. The size of the company should never be a hindrance to its going global. Although an SME will have to take into account its particular circumstances when embarking on an international project, this does not mean that an SME will not enjoy the many advantages which it offers. Because, when an SME crosses the border, it diversifies the risk, escapes from the saturation of the local market, increases its competitiveness, improves its brand image substantially, accesses new resources and markets with great growth potential and, above all, grows and satisfies the desires of its entrepreneurial spirit.
An SME with great potential may not achieve the desired success due to the saturation of the market, the particular conditions of this or the high competition. Even if its development is favorable, its growth might be very limited by the scenario where it is located. Opening the doors to the outside can help the small and medium-sized companies to overcome these and other obstacles. In fact, internationalization was a lifesaver for many firms when the crisis struck. However, for most SMEs, size continues to be a brake when it comes to betting on a market abroad.
The main obstacle to the opening of SMEs abroad is the widespread belief that a process as complex and demanding as internationalization is not appropriate for this type of companies. Precisely, their size rather than a disadvantage may bring a competitive advantage. When companies are smaller, they make decisions with greater speed, are able to manage their resources and plan work in a more organized and agile way, have a more direct contact with customers, count on a rich human capital (workers are joined and identify themselves with the company) and are more focused on perfecting the product and services.
According to the study "Internationalization of European SMEs" carried out by Bpifrance, British Business Bank, CDP, ICO and KfW, the biggest restraint that Spanish SMEs come across when they decide to start an adventure abroad is the access to financing. First of all, it is necessary to understand that not all types of internationalization require the same economic outlay. It is not the same aim at the opening of a factory, to reach an agreement on distribution or to make the assignment of a patent. For example, as we mentioned in a previous article, small companies can easily pay attention to other markets thanks to the existence of the so-called marketplaces. Entrepreneurs must take into account the internationalization model that best suits their business and conditions. Each one will not only require a different level of investment, but also a different strategy.
On the other hand, when looking for financing it is important to know and be informed about the different institutional programs to which SMEs can apply. Organizations such as the Spanish Institute of Foreign Trade (ICEX), the Official Credit Institute (ICO), the Chamber of Commerce of Spain or the European Innovation Council offer different aids and lines of financing. It is also important for entrepreneurs to be aware of hot news, especially those related to their target markets and the ones that may affect their local business. For example, it is useful for SMEs to be informed about news like the signing of the agreement between Klik & Pay and WeChat that enables Spanish SMEs to distribute products in China and sell products to Chinese tourists who visit our country by means of the WeChat Pay app.
Below, we offer a series of suggestions that can help to conclude successfully the process of internationalization of an SME:
The current business scenario demands professionals who have the professional and personal skills which are necessary to lead complex environments that are marked by globalization, digital transformation and constant change. The Executive Development Program (EDP) of The CEU IAM Business School has been designed to offer everything you need to become one of those professionals.