Navigating International Expansion: Essential Strategies for Global Business Success

In an era where geographical boundaries are becoming increasingly irrelevant to business operations, international expansion represents both an enormous opportunity and a formidable challenge. The allure of new markets, diverse customer bases, and exponential growth potential draws companies of all sizes to look beyond their borders. However, the path to successful international expansion is fraught with complexities that many businesses tend to underestimate.

Drawing from the extensive experience of Ton Dobbe, a veteran of the software industry with over 26 years of experience leading international expansion at Unit4, this article provides a roadmap for sustainable global growth, exploring the multifaceted nature of international expansion and revealing why so many companies stumble and how to navigate these challenges effectively. Whether you're a startup eyeing your first international market or an established company looking to refine your global strategy, understanding these principles can mean the difference between international success and costly failure.

What’s the Reality of International Expansion?

International expansion is far more than a simple geographical extension of existing operations. It represents a fundamental transformation of how a business operates, thinks, and delivers value. As Ton explains, "A lot of the misconception is that people think that internationalization is about a couple of things that you need to do on the product side. Language is possibly the simplest thing to do. But then you have to really dig deep into what are all the local things that you have to embrace, not only in the product but also in how to do marketing, how to do sales, how to do implementation, how to support. So it's a transformation that goes across the whole organization."

This oversimplification has led to countless failed expansion attempts and wasted resources. Many companies fall into the trap of viewing internationalization as merely a translation exercise; they hurriedly localize the product interface, adjust for local currency, and launch. But the truth is that successful international expansion requires a complete reimagining of your business for each new market.

Consider Unit4's expansion into Germany. As Ton recounts, "We wanted to move to Germany with one of our products, and that appeared to be a completely different ballgame. Not only because the company was really known in its own country, the Netherlands, and in Germany we were no one. Things that work really well in one country don't have to be working well in the other country because people don't know you."

This experience led Unit4 to ultimately pursue an acquisition strategy rather than attempting a greenfield entry. This decision highlights the importance of choosing the right market entry approach based on realistic assessments of market conditions and organizational capabilities.

In a previous blog article, Vincent Jong also warned B2B SaaS companies against the assumption that a winning strategy in one country would yield the same results in another by virtue of sheer proximity, adding that the specific requirements of heavily regulated industries complicate a one-size-fits-all approach, making it unsuitable.

What Are the Biggest Challenges Companies Face When Expanding Globally?

The Complexity Beyond Translation

One of the most persistent misconceptions about international expansion is that it primarily involves language translation and basic compliance adjustments. While these elements are certainly important, they represent just the tip of the iceberg. The real challenges lie much deeper and are far more nuanced.

Ton emphasizes that localization alone can be divided into many particular areas, including regulatory support, statutory requirements, and the need for different integrations. "If in the Netherlands, for example, or in the UK, you integrate with a CRM and an ERP and a product management system. Well, in other countries they have other heroes," he notes. These local preferences in terms of tech stack mean that what works seamlessly in one market may require complete re-engineering in another, and a whole new series of integrations might need to be developed from scratch to address the needs of the local customers.

When entering a new market, companies must navigate a complex web of local regulations, business practices, and cultural norms. These factors influence everything, from how contracts are negotiated to how customer relationships are built and maintained. Communication styles, and even the concept of punctuality can vary dramatically across cultures.

Another very practical element that can differ across markets is how your customers pay for your service. In one of our latest blog posts, Krzysztof Szyszkiewicz, who is an authority when it comes to pricing strategy, expanded on the importance of integrating payment methods and billing systems that are relevant for local customers as a way to remove barriers to adoption.

The Hidden Operational Challenges

Beyond the visible challenges lie numerous operational complexities that can derail an expansion effort. Local banking systems may operate differently, requiring new financial processes and partnerships. Employment laws and practices can vary significantly, affecting how you hire, manage, and compensate your international teams. Even something as seemingly straightforward as setting up a local entity can involve months of navigating through bureaucracy and substantial legal costs.

These operational challenges extend to technology infrastructure as well. Data privacy regulations like GDPR in Europe or data localization requirements in countries like China can necessitate significant technical adaptations. Companies must often rebuild portions of their tech stack to comply with local requirements while maintaining operational efficiency.

The Customer Expectation Gap

Perhaps the most critical challenge is understanding and meeting local customer expectations. These expectations go far beyond language preferences and touch on fundamental aspects of the customer experience. Local customers may have different preferences for product features, support channels, and even pricing models. What's considered premium service in one market might be the baseline expectation in another.

Sometimes your main competitor in a new market might not be another software company but "an Excel spreadsheet" if the market isn't mature enough for your solution. We had already touched on this topic in a previous blog post, where our guest Tamara Ceman invited SaaS founders to look beyond direct competitors when assessing the competitive landscape.

Understanding these nuanced differences requires deep market research and, often, a willingness to fundamentally rethink your value proposition.

Is There a Strategic Framework for Global Business Success?

Introducing the "Remarkable Effect" Approach

Success in international markets requires more than just showing up. We’ve touched on this topic often in our blog. In a previous article, Clément Dumont provided a comprehensive overview of key strategies B2B SaaS companies can adopt to achieve global business success.  

Ton’s point of view on this matter, however, is quite original. According to him, in order to succeed, companies need to be remarkable. The "Remarkable Effect" framework, which he developed and detailed in his book, provides a structured approach to achieving distinction in new markets. "The moment you go from one country to another, no one knows you. And that's where it's becoming even more important to get those traits right," Ton explains.

The framework is built on the understanding that in unfamiliar markets where you lack brand recognition and established relationships, being merely good isn't sufficient. You must be remarkable enough to overcome the natural preference for known, local alternatives.

The Three Levers Explained

The Value Lever: Creating Localized Excellence

The Value Lever focuses on three critical traits that form the foundation of remarkable software companies:

1. Acknowledge you cannot please everyone: Identify your ideal customers, those who have become your biggest fans in your home market, and understand whether those same characteristics exist in your target market.

2. Offer something valuable AND desirable: "A lot of companies offer something that's valuable. But if it's not desirable, the attraction really stays out," Ton notes. The distinction between valuable and desirable is crucial, as your solution must not only solve problems but also create genuine enthusiasm among users.

3. Aim to be different, not just better: When you enter a new market, it’s not enough to say your solution is “better” than another that is already present in the market. What usually works better is showing prospects that your solution is “different” from those already available. “Different is something that people can understand and that you can also explain and demonstrate."

The Viability Lever: Building Sustainable Operations

The Viability Lever ensures that your international operations can sustain and scale effectively. Ton explains, "As you evolve in your own country, but also in that international domain, you have to make that business viable."

This involves four additional traits:

- Mastering the art of curiosity

- Turning customers into fans

- Focusing on the essence

- Creating new value possibilities rather than just pushing features

The Volume Lever: Scaling with Purpose

The Volume Lever addresses the challenge of scaling operations while maintaining quality and local relevance. As Ton notes, "If the value is right, it becomes much easier to create momentum even in a new country."

This lever focuses on three key aspects:

- Creating momentum through a proper foundation

- Making it easier to surprise in the market

- Hitting the right nerve despite market noise

What Are the Best Practical Strategies for International Expansion?

Market Entry Sequencing

One of the most critical decisions in international expansion is choosing which markets to enter and in what order. Ton's experience offers valuable lessons: "We saw a couple of our competitors struggle with greenfields. And we extended and extended what we were going to do there until we decided, okay, we need to do an acquisition in order to get into the country where there is already a product, an organization, and so on."

This decision should be based on careful analysis across multiple dimensions:

- Market size and growth potential

- Competitive intensity

- Regulatory complexity

- Cultural distance from your home market

- Operational feasibility

Building Local Presence and Credibility

Establishing credibility in a new market where you have no brand recognition is one of the biggest challenges in international expansion. Ton shares a powerful example from Unit4's expansion: "In one country where we were actually the market leader, we had the typical win rate of 20%. In the country where we started, we ended up with 80% win rates, whereby we sold the product in a completely different way with a completely different story."

The key to this dramatic improvement was focusing on what made them unique and building a story around that differentiation. Global business success requires:

- Significant investment in local presence

- Hiring respected local leaders

- Partnering with established local businesses

- Signaling long-term commitment to the market

Adapting Products and Services

Product adaptation for international markets requires a delicate balance. Ton recommends starting with your most successful customers in your home market: "Step back and say, okay, out of this group that we serve, which are the ones that have become our biggest fans. And what are the reasons why they have become your biggest fans? Do those rules also apply in that other country?"

This approach helps identify:

- Which elements must remain consistent globally

- Which elements can and should be adapted locally

- How to create modular architectures that allow for efficient customization

How Important is Differentiation?

Standing Out in Crowded Markets

In international markets, the challenge of differentiation is amplified. And true differentiation comes from understanding not just what you do, but who truly values what makes you unique. The most successful international expansions often involve companies that reimagine entire categories rather than simply offer better versions of existing solutions.

Beyond Product Features

Sustainable competitive advantage in international markets often comes from differentiation across the entire business model. Ton emphasizes the importance of understanding the psychographics of your ideal customers: "It's about what companies value, what they stand for, what risk they tolerate or not tolerate."

Long-Term Vision and Sustainable Growth

Successful international expansion requires a long-term perspective. The trick is to maintain focus on your remarkable difference and continuously invest in what makes you unique. The most successful international expansions create compound advantages that become stronger over time. This focused approach creates a virtuous cycle where:

- Each market entered provides learning for subsequent entries

- Operations become more efficient

- Market understanding deepens

- The ability to identify and capitalize on opportunities improves

Conclusion: The Path Forward

International expansion remains one of the most challenging yet rewarding strategies for business growth. As Ton's extensive experience demonstrates, success requires far more than ambition and resources: it demands a deep understanding of the complexities involved, a strategic approach to market entry and development, and the patience and persistence to build sustainable positions in new markets.

The key takeaway from Ton's insights is clear: "Get the foundation right. The moment you get your foundation right in a new country, everything becomes easier." This foundation isn't built on features or even superior products, but rather on a deep understanding of who your ideal customers are, what makes them tick, and how you can serve them in a way that no one else can.

For businesses contemplating international expansion, the message is to approach with respect for the complexity involved, invest in deep market understanding, and commit to being remarkable in every market you enter. 

In an increasingly connected world where product lifecycles are shrinking and noise is increasing, the question is not whether to expand internationally, but how to do so in a way that creates sustainable, remarkable value for your chosen markets. The journey of international expansion is not for the faint of heart, but for those willing to embrace its challenges and complexities with the right framework and mindset, it offers the potential for transformative growth and the opportunity to build businesses that transcend borders and cultures.

At Undertow, we are committed to helping your B2B SaaS tackle international expansion in the most efficient way, creating and managing tailored localization programs that allow you to scale effectively, while maintaining your remarkable elements. Get in touch to find out how we can help your business grow.