Is internationalization reserved for major companies?

Published at 27/02/2020

It is a fact : French SMEs have little international presence (in 2017, among the nearly 4 million French SMEs, there were only 125,000 exporters); above all, they are much less so than their Italian or German neighbors… Indeed, the company directors I have met during my career have often told me about their concerns about the idea of developing their business internationally:

Today, with this post, I would like to twist the neck of this common misconception: no, internationalization is not just for big companies. Let's review some of the obstacles that slow down internationalization: as you will see, they are primarily psychological, and can be overcome if the leader feels confident.

You have to be a certain size to go international

While large French groups are very internationalized, SMEs and ETIs are often lagging behind.

Among some business leaders, the Among some company managers, the idea that one should have reached a critical size to venture outside the borders is very present, and motivates self-censorship: ”It's not for me”, ”We are too small to exist outside our natural market”, etc.

In some respects, however, it is easier for an SME to go international: less closed, more agile, more flexible than a large group, it can more easily integrate the upheavals that internationalization brings. Let us note in passing that it is recommended to have been able to build a solid position on its domestic market before opening the doors to the international market and this, to maximize the chances of success.

Internationalization costs too much

We often imagine that the process of internationalization must involve setting up shop abroad, opening a subsidiary, which represents a substantial investment in both time and capital. Such a project can therefore be difficult for a company with only a few employees to support, especially since the return on investment is neither guaranteed nor immediate.

There is no need to start by aiming too high! A first international experience can simply start with an export market. It is a way to test a market, to give yourself time before committing to larger investments, but also to build strategic and/or capital partnerships.

Internationalization is too risky

Like any investment project, it is true that internationalization represents a risk for the company. But this argument is like seeing the glass half empty: it is easy to argue, on the contrary, that internationalization is a way to diversify risks, and therefore to be prepared. Indeed, being present on several markets allows one to be less sensitive to the alacutes of the domestic market, and therefore to make one's company stronger, more resilient.

And then afterwards?

What the numbers show is that once the internationalization process is underway, it takes care of itself. For example, according to the export barometer published by our partner Euler Hermès, 84% of French exporting companies wanted to increase their export sales for the year 2018.

So, don't delay any longer! The key to success lies first and foremost in the manager's desire to open up new growth opportunities and in strategic planning upstream of the internationalization process. In a previous post, I had moreover outlined some of the necessary elements in the preparation of the internationalization process.