July 2019
language barriers can slow things down or result
in misunderstandings along the way.”
PRO Tip
If you can overcome the challenges,
the benefits to global expansion can be
significant. See sidebar for examples.
MiMfg Magazine
Understanding the Benefits
to Business Expansion
1. Economies of scale! As you make more efficient use
of your current resources of personnel and equipment
and buying power, your per-unit cost will decrease,
increasing your margin.
2. Faster growth. Although the U.S. economy performed
fairly well in 2018 at just under 3% growth, there are
over 100 countries around the world with economies
that grew faster.
Finally, one of the worst things a growing
3. Diversification of customer base. Diversifying your
business can do is go too far too fast.
customer base can also make your company more
“Changing regulations and international trade
resilient against economic cycles. We’ve spoken with
issues can have a big impact to your success — if
more than a few companies that told us they would
China has become your largest client country in
have closed their doors during the great recession 10
recent years, then the tariff situation has likely
years ago if it weren’t for their foreign customers.
put you in a precarious situation,” Sims said.
“Capacity is something else that everyone must
4. First-mover advantage. Even with the dizzying pace
keep an eye on. If you’re not able to keep up with
of globalization, it’s still possible to be the first-to-
your newly created demand for a product, this
market in some places, setting the tone, price point
can create bad blood; this is especially true for
and capturing a growing market share.
international clients that tend toward putting a
5. Better wages. A U.S. Chamber study found that
lot of stock in relationships and trust.”
companies that exported paid approximately 19%
In the end, Michigan’s many small and
higher salaries to their employees.
mid-sized manufacturers would do well to explore
international expansion. Whether you do it or not,
6. New insight into existing products. Unbelievable as
and to what extent, is up to you but, with billions
it seems, overseas customers frequently use products
of people living outside the U.S., simply ignoring
a bit differently; these differences provide insight to
those markets can be a bad idea — especially if
help companies innovate to create better offerings
your competition is doing their research.
down the road.
“I think expansion is important – it’s made
Source: Michigan State University’s International Business Center.
us a stronger company,” said Curry. “If you take
that leap of faith and jump into it with the right
resources it’s only going to
benefit you. I’ve enjoyed the
travel and seeing how other
manufacturers do things, what
their processes are, how they
handle different situations —
it can open your eyes and you
can bring those new ideas
back home.”
CONNECTION TO
6
Brett Gerrish is MMA’s
communications
coordinator. He
may be reached at
[email protected]
or 517-487-8533.
DETAILS
You need permits, regulatory compliance, and health/safety
training to keep manufacturing running smoothly.
Let us help you connect the details.
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