Before the pandemic hit, globalisation was well ingrained in our society and businesses had stable plans. The events of the past year have disrupted the world as we know it, causing dramatic changes to the behaviours of consumers and nations, ultimately turning international business upside down.
Whilst there is no doubt that COVID-19 has induced a crisis grasping the world abruptly, it has also ignited a change of era for international business.
So, what has changed?
Before COVID-19
- International travel was simple.
- Employees were mostly local to businesses they worked at and regularly worked at the office.
- Plans to expand into fast-growth markets were being implemented.
- Supplier and shipping issues were straightforward and easy to solve.
- Consumers targeted for both physical stores and e-commerce.
- Cross-border business regulations were easily tracked and involatile.
What can we expect from now on?
- Working from home means teams can now be more internationally diversified.
- Plans to expand into high-growth markets become more focused.
- Suppliers are closer.
- Logistics are restructured for shipping in smaller batches.
- E-commerce increases with consumer needs shifting to purchasing more products online.
- Possible cross-border regulation changes are increasingly factored into business models.
Is your business prepared to adapt?
Although it may seem that COVID-19 completely changed the way we do business, the reality is that organisations were already heading in this direction and the pandemic only brought these changes around faster than most had projected.
Travelling and workspace
Whilst the pandemic has limited globalisation, one could argue that, at the same time, it has opened borders through the switch from in-person business to virtual. As we slowly ease restrictions, in-person activities will occur again, but virtual activities will no-doubt stick around and complement them. Online communication is becoming more and more manageable and cost-effective, making a work-from-home business model a reasonable and scalable option.
Targeting new markets
Previously, companies would send a local associate periodically abroad to interact with customers and learn better ways to market to them. In this new era of international business, companies are now more likely to hire native employees in locales of interest. This will allow for non-stop access to information from the region in real-time, raising revenues and reducing costs over time.
Consumer behaviour and logistics
In the past, companies mainly relied on physical stores. With stores forced to shut down due to government guidelines, consumers began to purchase significantly more items online, leading to the increase of e-commerce. This change means that logistics will lean more towards parcel post rather than bulk shipping. Whilst this movement has started before COVID-19, there’s no doubt it has accelerated it.
The pandemic also brought about supply chain issues due to producers and distribution centres being forced to shut down. As a result, many small and midsized businesses that rely on imported supplies are now looking to move these business aspects closer to home or closer to their target market. Although many business owners had previously started to look at these solutions due to cost, the ones that had been on the fence have been nudged to follow through with their plans by the events of the past year.
How can I optimise my business to this new era of international business?
As the COVID-19 pandemic continues to evolve, there has never been a more pressing need for organisations to rethink their strategy for a changed world.
It is important for you to identify the most significant problems faced during the pandemic, understand which are here to stay and figure out how to best adapt and respond effectively. Take the time to fully understand how you can diversify the use of your current assets to come up with a plan that will allow you to prosper.
If you have any questions relating to anything discussed, please get in touch with the team below.