INTERNATIONAL EXPANSION LUNCHON-TALK 6 Feb 2023, London
An interview of Simon Denton (Sovereign Group) with Gerrit Stroomann (Expandeers) on:
Evaluating the weakening national economy as an opportunity for international growth
- The state of the UK economy in comparison with other Western markets
- How Britain can overcome the downturn in economy
- Overview of domestic and global growth options for SME: chances in Europe, Middle East and beyond for British companies
- Pragmatic approaches to access new markets: trust is the basis
- Pitfalls in internationalization: some cases on how not to do it
On 6th February our MD Gerrit Stroomann held a speech on the state of British economy and options in international business to get around Brexit hangover and overcome an economically unfavorable situation of the UK.
The introductory speech and following interview between Simon Denton of Sovereign Group and Gerrit D. Stroomann, Managing Partner of Expandeers Global Group, discussed the weakening national economy of the United Kingdom as an opportunity for international growth. The International Monetary Fund (IMF) recently announced that the G7 countries will experience GDP growth this calendar year, with the exception of the United Kingdom (-0.6%) majorly due to the impacts of Brexit that are adding to the cost of COVID-19, and the invasion of Ukraine by Russia and associated issues. The interview focuses on the options for small and medium-sized enterprises (SMEs) and larger corporates in terms of market entry and expansion in the European Union, starting with Germany as an idea.
The recent complications due to Brexit have made it difficult for SMEs to expand their business across the EU and the UK. A recent survey by the British Chambers of Commerce found that half of 500 SMEs asked are struggling with current European exports, and the difficulty of obtaining visas for employees and supplies from mainland Europe. The Economic & Social Research Institute in Dublin reported a 16% decline in UK exports and a 20% decline in EU exports to the UK due to Brexit. The UK has also seen a 25% decline in investment from the EU.
How to make the best of the current crises
To overcome these challenges, the interview suggests diversifying businesses and focusing on a strategy that puts advantages of production, supply, and sales together. Expanding to the European market makes sense, as it is culturally familiar and most companies have the most experience with this market, whether it be good or bad. The most favorable European market for British companies to expand to will depend on the specific needs and goals of the company. Several factors must be considered, including market size and growth potential, access to talent, infrastructure and transportation, legal and regulatory environment, and taxation and costs.
Expanding to the Middle East and the ASEAN states also offer opportunities for growth and expansion. The Middle East is an attractive market due to its large and growing population, increasing wealth, and growing demand for goods and services. The ASEAN states, particularly Southeast Asia, have been experiencing robust economic growth, making them attractive markets for international businesses. Both regions have diverse cultures, languages, and regulatory environments, so it is essential for companies to carefully evaluate their options and conduct thorough market research before entering these markets.
The time is now
In times of crises it makes sense to re-invent and prepare for new ways to do business. When you have a power failure you look for candles and matches to cover that, but also must think of avoiding that failure next time. As always getting out of a crises stronger than you entered it. Especially in the perma-crises mode we are experiencing.
In conclusion, the weakening national economy in the United Kingdom presents an opportunity for international growth, and businesses can overcome the challenges posed by Brexit by diversifying their operations and focusing on a strategy that puts advantages of production, supply, and sales together. Both the European market and the Middle East and ASEAN states offer opportunities for growth and expansion, but companies must carefully evaluate their options and conduct thorough market research before entering these markets.