Challenges of Internationalization and How to Tackle Them

The demand for customers is continuous and influenced by many factors. In today’s competitive markets getting new customers is vital. And the potential customer base in your own country might not be sufficient enough to carry your business in long term.This means that internationalization it’s almost mandatory for many companies.

In this article it will be presented challenges of internationalization and how to tackle them.

Imagine the following situation: Your current business and a different country with a different culture and customs. Your first thought might be tackling the cultural and regulatory challenges in a new environment might take too much resources. But a skilled businessman has to be prepared for quick changes in the market. And be able to take the bull by the horns immediately when the time comes. In this article, we observe how and why internationalization is rather a great opportunity than a heap of problems. We use as an example here the Uppsala model.

What is Uppsala model? Some of you might already be familiar with it, but let’s have a short overview of the model: Uppsala model was based on the process of acquisition of foreign business environment. It could be just the step forward that your company should take. Considering the fact that internalization of your business could be a ground-breaking improvement. And actually could help attracting a wide range of new customers with unknown potential for future growth. But, on the other hand, there are also lots of threats one should be aware of and acquainted with. In order to successfully expand operations abroad.

Face-to-Face with Uppsala Model

The theory in the Uppsala model says there are two types of companies: ones that are so-called “born-global” companies. This means that they were established for the sole purpose of selling products and/or services in the foreign markets. And ones that were created for a specific marketplace in a specific country but want to cast their net wider. The Uppsala model has been a great stepping stone for the latter type. Which means that the companies made a plan, were ready to take a risk and are now very successful. Both domestically and internationally. To go more into detail of the model, the whole idea was built on four Swedish companies: Sandvik, Atlas Copco, Facit, and Volvo.

What is then the key to success according to the Uppsala model? J. Johanson and J.-E. Vahlne, are the authors of this method. They argue that these companies had given preference to the safe and more sophisticated way of reaching the foreign market. In the model, they describe the particular steps required in the process. From the phase when a company has not any connection to the wanted target market. Until the final phase, the success when a company has established its subsidiary abroad. When you peruse the particular steps in the model the whole thing might seem easy. But we cannot ignore the fact that the process does require a lot of planning and hard work. Better known as resources and flexibility from the company.


Steps to ensure successful internationalization

Always be aware of sensitive information about your company. Be critical. What have you done until now? Which actions were good? Which were not? What more can you do? How and what are you able to manage? With what would you need help with to manage? The first step, of course, is to make a strategy. Ask these questions from yourself about the domestic market and then about the wanted target market. Compare your answers. Find the opportunities in both. Think also one more time. Is it necessary to expand your operations? Are there no new opportunities in your country anymore?

To answer the last question you should consider these points about the domestic market:

  • Is there global competitiveness in your domestic market?

  • Are there foreign companies or companies with higher earnings?

  • Do you have an increasing number of customers?

  • What is better for your company? Be dependent just on one market or have at least some operations on the foreign market.

If you consider expanding abroad

First you consider and answer these questions. If you have arrived at the conclusion that expanding abroad is a viable option it is time to take the next step. Expanding to a foreign market will require money but more importantly time. Study the culture in the target market, in business as well as national level. Make sure you understand the do’s and don’t’s and distinguish the cultural differences that might be challenging. You must make sure that your company is prepared for the changes in surroundings as well as in practical matters. That will be the ace up your sleeve.

According to the Uppsala model, this phase is characterized as “No regular export activities”. Because in this step most companies have no idea what is waiting for them abroad. And often they don’t make the aforementioned research beforehand. Due to a lack of information and confidence, they try to avoid any problems by just waiting on the market. How many companies do you know that have succeeded by doing nothing and waiting for things to come their way? Nobody can take this step for you. You cannot outsource it. But the time spent on the research will be handsomely paid back if you succeed in the end.


Internationalization: two ways

internationalization – Networking is the key

If and when you are really sure that the chosen foreign target market fits your company. And your reasons are sane and well thought out. Then prepare yourself because it is time for executing the strategy.

Orientation for both, new and old staff on the new target market is important to do with care and precision. Because if you get it right, is the first time you have a big advantage in your hands already. After all, people are your best resource. When you get the operations rolling, it is time to cast the net out and catch some fish. But where and when? Again, information is the key.

Now that you are already in the market…

You need to know information about local partners or regulations. And the best way to get the best information is to have local contacts. You have already executed some basic market research in the previous steps. But now it is time to deepen this information. Be active, be social, be very much hands-on-deck and go to events, network. Find the professionals who can help you with this comprehensive work. That way you will get more intricate, intimate data, which makes the cornerstones of your advantage when you really start off in the new market.

The Uppsala method expresses the importance of communication and contacts on internationalization. It is like a huge ripple effect. These contacts will lead to information, worthwhile advice and also customers. Each of us must master networking if we want to have any chance of success outside our own familiar borders.

If you are a skilled networker, you can have access to all answers streaming from many years of experience. Adapting it to the new production policies and regulations; Possible distribution channels; Suitable pricing policies; Cultural preferences when it comes to products and services, etc. If somebody offers you advice, take it no matter how trivial it may seem at first. Your worst mistake could be ignoring the teeniest cultural difference.

Don’t ignore cultural differences 

Here are a couple of the millions of examples in underestimating the cultural differences. In Japan Pepsi Cola thought that the American way of marketing could work as well in the Asian business giant. Their slogan “Come alive” literally means ‘come out of the grave’ in Japanese. Which obviously did not go down too well. A Finnish furniture company, Asko, had to retreat from the Spanish-speaking markets because their name means ‘ugly’ in Spanish. Imagine the  money and effort that could have been saved if somebody had talk to local people in the target country.

Every company has a chance on the foreign market. As long as the base work is done well and executed with care. There will always be risks and challenges. But if you are afraid of these two things, what chance does your business have? Especially in today’s very competitive markets. Just remember when internationalizing that communication plays the main role at every step. It will save you time, money and guarantees you the information that will enable you to succeed. Be prepared and rule the world!… Or at least the markets where you want to rule.

If you are interested, go through our website and find out more about our company:


Lea Kubíčková (2013), Limits of the Uppsala model application in the internationalization process of Czech SMEs

Johanson, J. and Vahlne, J.-E. (2009), The Uppsala internationalization process of the firm – a model of knowledge development and increasing foreign market commitments

Šárka Zapletalová (2009)


Ensure Success – Up the Ante with Customer Relationship Management

Service organizations are now spending day and night. Striving to maintain superior quality of service with the effort of gaining loyalty from customers. Have you ever looked at your competitor’s service and wondered whether they are doing things better than you? Customer relationship management has appeared frequently in many books and articles. It is one of those phrases that you cannot escape from hearing in business today. People are putting more emphasis on the digitalization of the world. Some may attribute that Customer Relationship Management is a way of computerizing your business. Or a series of tools and techniques. Yes, customer relationship management has to do with new technologies nowadays. And the competitive edge has to be paid with sufficient investment of time and money. 

In its simplest form Customer relationship management is an attitude. And mindset, a value that you place on your business and its relationship with its customers. So, if you want to make sure you are doing better than the next player in the game. CRM might be the leverage point with which you can differentiate your business from the others.

Why does CRM help?

Remember the leaky bucket? It is a very common way to explain the role of CRM. Companies are way too busy trying to reach new customers. They should also put efforts into maintaining their current customer base. So, you end up putting customers in a leaky bucket rather than preventing them from leaking away from you. Competition is high in all markets. So, approaching a new prospect is more costly than retaining the customer one already has. Satisfied customers who frequently come back should receive more attention from you. From the new customer who just came and bought your services as a tryout. Still, we do not mean to discourage businesses from getting new customers. How else would a business be able to grow, right?

The reasons why customer relationship management is important

68% of customers change product or service providers because they feel they do not receive enough attention and care. Good management of customer relationship helps companies treat customers as individuals rather than groups. CRM can go deeper to analyze or to study customer behaviour with the best produced products and services. Assumptions, which are based on previous experiences and cultural factors, that one carries about customers will also become more explicit.

People say that at some point when the cost of retaining customers is higher than acquiring a new one, the leaky bucket actually works best. The author personally believes that all companies will be in such a situation at some point. The only way to recognize that moment is when the companies invest more in customer relationship management and a CRM system.

Benefits of using a Customer Relationship Management (CRM) system:

Is CRM system basically all about contact management? Well, actually CRM system can do more than that.

Customers want to use the products and services but they also want to be consulted more closely. In short, they want to receive more attention from a company. They trust as individuals rather than a grey mass. The interaction process between customers and the sale staff will create real relationships. Customer information stored smartly. The transaction process is recorded instead of rushing out taking note and then forgetting about it; the information on customer satisfaction, the productivity of a team or a specific employee is is updated in real-time. The fastest answers will help to gain the needed trust from the customers. CRM managers know and analyze each session each day. And also the work their employees are processing.

An image shows which customer relationship platform is the most popular

Very often, it confuses when you look up for CRM systems and have hundreds of choices. By Barry Schwartz: the more choices we have the less likely we are to be content with our decisions. Our aim is not to confuse you. So, only a few, but good, choices showed in the pie chart above. It is important to mention Hubspot’s CRM which is 100% free. It is extremely lightweight and really a good option. For small to midsize businesses that have never used a CRM before.

At the end of the day, there is no business if there are no customers. Loyalty is difficult to find these days. But if you manage to find and maintain a loyal customer you know you have struck gold. But keep in mind that customers are not clones of each other, each comes with different requirements for attention. So, like in so many situations, communication is key.

Find out more:


Why is it smart to do business in Tallinn?

How do you see yourself and your business company next year at this very same time? Wise decisions are valuable and important for your company. Ever had any thoughts that business functions don’t go smoothly enough? The digital environment is old and the progress seems to move at snail’s pace? But the future is now, so all that must be frustrating.

We should know since we (the authors) are located in Tallinn. This is one of the most or even the most digitally developed country in the world.

Estonia: a digitally developed country

What is it then that makes Estonia so advanced, tech-savvy and business-friendly?

The tiny North European country has learned hard lessons from its neighbours. The economy has not suffered from Brexit. The important indicators, such as GDP and unemployment rate, among many others are rather good compared to most of Europe. Brexit has so far meant great success for Estonia’s interests and business world. This because citizenship applications from Britain to Estonia have increased tenfold compared to the previous year. This is the result of the unique system. This system where anyone can apply for a digital e-citizenship of Estonia.  Even if you have never been anywhere near the country.

With e-residency, people all over the world are able to use Estonia’s digital services. Which in turn you’ll get cover for example bank services. Most of Europe is feeling the heat about the recent Brexit vote and wondering, waiting what will happen next.

Estonia keeps being one step ahead in the digitalization race.



Trendiest word ever: digital. This has been repeated as the most essential development in the future. For example, in Finland, the reactions have been far from the theories. Estonia, on the other hand, has been taking big steps and going forward much faster than any of its neighbours. This makes sense in a way. Tallinn has been the heart for business and start-ups, for hundreds of years. The banal Soviet decades are long gone but not forgotten.

Here is the thing:

There really is no magic behind the Estonian success. That is why it is time to make a shortlist of the key points. Why is business great in Estonia and what to expect when trying to make a living in the Pearl of Baltics?

1) Strength in innovation

One can be surprised to see how well new things are being put in place Estonia. It is as if there is no middle man slowing things down like in many other Western countries.

Yes, Estonia is an Ex-Soviet satellite state but exceeding that fact they have been able to balance themselves without mental devastation. While thriving with adaptability and resilience. These abilities are in high demand everywhere nowadays. Comparing present-day Estonia to the 90’s version. This can help you to realise that change is always possible, and also going to happen. It is all about how we change to it and take our chances.

There are those who stick to the old and don’t want to believe that the world is changing. Well, it never stopped changing but the nature of things is now faster than ever. Global market and the total youth of the concept of work might be a nightmare. Only to those who fear regeneration and future itself. In Estonia, the future has been seen as it should be: full of opportunities waiting to be seized.

For example, digitalization innovations, such as e-residency. These do not get any faster and easier for you for doing real business in Estonia! There are already over ten thousand e-residents and a lot of them have never even touched the Estonian soil. The system is globally unique. You see, this is the innovativeness. Estonian companies get more customers and grow faster than ever because of this and all the other amazing digital applications. The next level of internationalization has already seen daylight in the most advanced digital society in the world. Others might want to take a leaf out of their book and follow.

2) Cost-effectiveness

Seriously though, where else do you get to see things running so smoothly as in Estonia? They started from the bottom 25 years ago. When entering the world of independent and free nations. Celebrating its 25th year of complete freedom it is a must to raise a toast for Estonia at this point!

Since 1991 the economy has been steadily growing with praise from the economic world. A liberal economy policy is one key to growth. Not to mention the low-tax system. The 1/3 labour costs that companies face here compared to those of, for example, Finland or Sweden. This has not been unrecognised by the world’s biggest trading and banking organisations.  Such as the World Bank and the World Economic Forum. That praise Estonia is an absolutely great place for business. The small country has made its mark and showed to the giants that the nation in white, black and blue is the one to look up to.

3) Digitalization

Want to open a bank account in Estonia without actually being there physically? Possible! And so it is visiting Estonian library to read today’s paper among many other benefits when you get yourself an e-residency. Voting is also possible online and this e-Voting. This concept has been estimated to be 16 times cheaper compared to the traditional way of voting.

While most of the nations are still considering the possibilities and the fears of digital. In Estonia, it is a whole different story. You can never become successful if your way of surviving is all about imitating the ones you look up to. By the time you get to their level, they will already have moved on to bigger things. Hard work, research, and can-do-attitude will eventually play out fine for you.

A point has been reached where Estonia is the precursor in the digitalization. Identity, health, education, social services, you name it. What will you be a pioneer in?

This digital aspect is also the key point when considering a country to do business in. Things actually work with digital solutions and less paperwork. This means more action and time to concentrate on whatever you consider relevant. Fast, reliable, digital, paperless and less bureaucracy. Is this not the way you have always wanted to see the world go round since the first days of the internet?