Business scaling: International expansion strategies

In a globalized world, international expansion has become much more accessible. But despite this, entering new markets is still a difficult marathon that requires clear planning and careful preparation. In most cases, system expansion can take years or even longer, depending on the specifics of the product and the chosen method of market penetration.

Ensuring sustainable growth and scaling is one of the most prominent business trends of recent years. The following reasons are obvious: the COVID-19 pandemic, military conflicts and economic upheavals can quickly change the conditions and rules of the market. In such an unstable environment, the priority is not the depth of potential, but the resistance of the enterprise to changes and flexibility, which creates the possibility of effective response to challenges, without the loss of employees and resources.

The article formulates the essence of the concept of “business scaling”, defines the differences from the concept of “business growth”. The terms “growth” and “scaling” are often used interchangeably. Although they are related, they have significant differences. Growth means increasing revenue at the same rate as the business adds resources (new team members, technology, capital, etc.). On the other hand, scaling occurs when an organization identifies ways to grow more efficiently, resulting in revenue growth at a significantly higher rate than the increase in resources and costs, which is also characteristic of a startup.

Speaking about the relevance of the research topic, it was determined the most common mistakes that international companies often make during the scaling process. They consist of: too rapid expansion; prioritizing short-term goals over long-term goals; loss of attention (focus); predominance of quantity over quality; malfunctions of processes and systems to increase efficiency; lack of flexibility. Avoiding mistakes and achieving efficiency in business scaling processes involves building and implementing a strategy that can be adjusted and adapted to changes in macro- and microenvironmental factors as needed.

Companies that scale successfully take into account how the scaling process affects all areas of the organization’s functioning. Key aspects of the business scaling process in the context of international expansion typically include: goals of the company, number of team members and internal business processes.

In this article the main possibilities of building a system business that works effectively and generates profit in the conditions of the global market are substantiated. Basic approaches to scaling and strategies for international expansion are outlined. Based on the results of the study, the main risks caused by business scaling were identified, and measures to mitigate them were proposed.