DHL Express report provides guidance for small and medium-sized enterprises (SMEs) on expanding to global markets

SMEs contribute significantly to international trade. According to Eurostat (Federal Statistical Office of the European Union), in countries like Cyprus and Estonia, SMEs accounted for over 80% of the trade value in intra-EU exports. Conversely, in major economies such as France and Germany, the share was significantly lower, with SMEs contributing around 33-35% of the trade value. To boost their participation in global markets, they need access to finance, technological adoption and favorable trade policies. With the whitepaper “Global expansion simplified: The ultimate Guide for SMEs” DHL Express and the renowned University of Maastricht have developed a practical guide for SMEs to meet the challenge of expanding internationally.

“One of the primary benefits of internationalization for SMEs is the access it provides to new markets. By expanding beyond domestic borders, you can tap into larger customer bases and diversify your revenue streams. You also challenge your own business to improve and excel in order to compete in this broader market”, says Michiel Greeven, EVP Global Commercial at DHL Express. “With our whitepaper, we offer SMEs a practical, easy-to-use toolset to prepare for global expansion and to make their business both more profitable and resilient.”

"With our contribution to this white paper, we aim to support SMEs in realizing their international ambitions. Starting with a solid strategy, expanding globally can offer great opportunities for SMEs seeking to explore new markets. We hope the insights provided in this white paper will enrich their knowledge base and bring them one step closer to successful international growth", adds Roy Broersma, Managing Director Centre for Entrepreneurship & Innovation at Maastricht University.

Key take-aways from the whitepaper “Global expansion simplified: The ultimate Guide for SMEs” and its nine building blocks:

• Understanding the Importance of Internationalization: SMEs benefit from considering internationalization as an essential component of their business strategy, not only to sustain their operations but also to drive growth and innovation in the global marketplace.
• Conducting Thorough Market Research: To effectively implement an international strategy, SMEs need awareness and foresight regarding upcoming challenges and opportunities, as well as customer behavior. To get this type of insight, market research is essential as it provides SMEs with a better idea of consumer behavior, market trends, economic conditions, and cultural nuances.
• Leveraging Human Resources: Human resources play a pivotal role in the internationalization of SMEs. By strategically aligning human capital with internationalization strategy, investing in relevant training, recruiting the right talent, developing flexible HR practices, managing the limits of human capital, and fostering a culture of continuous learning, SMEs can significantly enhance their chances of success in global markets.
• Developing Cultural Intelligence: Cultural intelligence (CQ) involves an in-depth understanding and appreciation of local customs, values, consumer behavior, and business etiquette, which is crucial for interpreting market data accurately and developing culturally sensitive strategies.
• Forming Strategic Partnerships and Networks: A key first step in internationalizing your business is to extend your network by initiating relationships with key stakeholders, such as customers, suppliers, and distributors in foreign markets.
• Choosing the Right Entry Mode: Selecting the appropriate entry mode is critical for managing risks and leveraging local advantages.
• Navigating International Laws and Regulations: The myriad of legal and regulatory hurdles SMEs face across multiple markets can significantly impede internationalization efforts. Understanding how to navigate them and mitigate risks is essential to grow internationally.
• Optimizing Supply Chain Management: Having an efficient supply chain is key to success in global markets. SMEs can either develop their own or, for maximum efficiency, flexibility and scalability, partner with third party logistics providers.
• Monitoring and Experimenting: When considering international expansion, it’s crucial to understand that a strategic approach leveraging experimentation and careful monitoring of key performance indicators (KPIs) can significantly enhance chances of success.

The nine building blocks provide an easy-to-follow framework for any SME that is charting a course to international trade, highlighting potential challenges and priority focus areas that can help reduce cost and risks while maximizing growth opportunities.