A well-defined internationalization strategy can bring significant benefits to companies, but when deciding to pursue this path there are always a series of considerations to take into account, as the risks associated with this option are numerous and sometimes with implications that managers are unaware of.

It is essential to study everything that involves this process and understand the obstacles to overcome so that everything proceeds as smoothly as possible. The keyword for this to happen is Research.

When it comes to research, it's not just about grabbing your computer and reading the first Google result. Research involves detailed analysis, filtering out less relevant information, and selecting quality content.

There are several entities specialized in the topic of "Internationalization" that greatly facilitate the work of those who intend to research the subject.

• Agência para o Investimento e Comércio Externo de Portugal (AICEP): the Portuguese Agency for Investment and Foreign Trade provides information on the scheduling of trade fairs and characteristics of the sector in which our company operates, allowing us to assess the specificities of a particular country and its relationship with Portugal.

• Allianz Trade: provides the economic, political, and cultural perspective of the country where internationalization is intended. However, they only provide information in English.

Therefore, before internationalizing, there is a need to focus on these issues and make sure it is the best option for your business. The success of the strategy the company intends to implement will depend on the rigor of the research.

The 4 stages of internationalization

There are 4 phases to consider before intending to internationalize your business.

1) Market entry mode

• Exportation (Direct and Indirect);
• Joint Ventures (Alliances, Partnerships);
• Licensing;
• Direct Investment.

The mode of entry into the international market should be aligned with the company's strategy, without forgetting the resources available.

2) Host country

Culture is one of the main barriers to internationalization. However similar a country may seem, there are always small differences that can become deal breakers.

When choosing the country, conduct intensive research on market dynamics, cultural traits, and common negotiation methods. This way, it will be easier to understand if the products and values of the company fit with the lifestyle of the population.

Furthermore, it is crucial to conduct a PESTEL analysis to understand:

• The Political, Economic, Socio-cultural, Technological, Environmental, and Legal aspects that the company will face.

3) Product mix

After evaluating the target country, it is necessary to understand if the marketing mix needs to be adapted to the needs of the host country's customers. Therefore, there may be a need to adjust prices with those practiced by competitors, tailor communication, choose distribution channels, and finally, assess the suitability of the product.

4) Associated costs

This is one of the most challenging steps throughout the research process, as it involves various calculations regarding the costs associated with each option.

For example, if the chosen entry mode is direct exportation, the costs associated with this option will be:

• Transportation;
• Product adaptation (if necessary);
• Patents in the destination country;
• Technical materials;
• Insurance;
• Customs formalities;
• Fluctuations in exchange rates;
• Among others...

A challenging task, but of utmost importance, as it prepares us for the reality we will face.

Don't forget to research intensively, only these studies allow you to evaluate all the necessary factors for your decision.