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How global expansion of business works

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The past 20 years have seen the emergence, development, and consolidation of global giants.

Companies like Amazon, eBay, PayPal, Google, Netflix, and Facebook have passed from tiny outfits to massive organizations with a presence in every country.

But how has this expansion happened? This article will look at three of the biggest American corporations, and explain how they became globe-spanning businesses.

How Netflix conquered the streaming world

It’s hard to remember a time when Netflix wasn’t part of everyday life. When we couldn’t just call up TV shows and movies on demand, and we were limited to the schedules of major networks. But somehow, the company from Los Gatos has expanded across the world, becoming the go-to streaming option from Beijing to Baltimore.

How did it manage to do so? Becoming a factor in 190 countries over a period of seven years (2010-2018) didn’t happen by accident. But Netflix’s strategy is distinctive, largely due to the sector it works in.

While conventional companies can setup outlets, admin centers and distribution networks in new territories, Netflix didn’t need to worry so much about these issues. Instead, the question was how to manage digital rights – the permissions which govern what can be shown, where, and when.

This meant signing special deals to screen content in different regions of the world. But it also meant localizing its business. To succeed, Netflix needed to learn what consumers in Spain or India wanted to watch. Clearly, just knowing about California wouldn’t suffice.

So what emerged was a globally integrated, but highly diverse company. And today’s Netflix is highly dependent on technology to protect its various national services. That’s why you’ll find a different selection of shows in Germany, compared to the USA. And it’s also why Netflix fights a constant battle against Virtual Private Network (VPN) providers to maintain control of its content.

Incidentally, you may be surprised by how much Netflix content varies by country. If you haven’t tried it yet, it’s actually great fun to explore what’s available worldwide. If you’d like to do so, you’ll need a high-quality VPN. Check out insights on PIA VPN by VPNpro for a strong option that always defeats Netflix geo-blockers.

Facebook: taking social media global

The story of Facebook’s expansion is, if anything, even more, astonishing than Netflix. The way that Mark Zuckerberg and his collaborators took the social network from a Harvard experiment to a globe-spanning influencer of opinion and a marketing juggernaut is nothing short of amazing.

How did it transpire? Well, things started slowly and methodically. Facebook grew its membership in US universities, attracted major seed capital, then expanded further to high schools and company workforces.

Its first overseas steps were just as deliberate. In countries like New Zealand and the UK, Facebook targeted universities once more. It knew that students were the ideal constituency for social media profiles and messaging. And it also reckoned that they were a great base to make use of social media routine.

Facebook only opened up its membership to the general public in 2006 – two years after launch. By then, it already had millions of members, and the capacity to multiply its user-base in a matter of months.

After that, global dominance wasn’t automatic. But through acquiring competitors like Instagram, and complementary apps like WhatsApp, Facebook positioned itself to become the social network people turned to – on almost every continent.

Part of the story revolves around luck. Facebook emerged as American tech swept across the world, smartphones started to take off, and social media found plenty of takers. Things haven’t always gone smoothly in recent years, but the slow steps taken early on by Facebook continue to give it a huge advantage.

Amazon’s never-ending quest for revenues

Finally, let’s look at another American giant: Amazon. In Amazon’s case, global expansion was never assured. After all, it’s just an eCommerce platform. On the face of things, Amazon has never offered anything radically different to its long-forgotten competitors.

But what Amazon has always been able to do is maximize its growth, from dominating book sales in the US in the 1990s to its current position as comfortably the world’s largest online retailer.

In the early 2000s, Amazon struggled to turn a profit. It was locked into a battle to find revenue wherever it could and had no reservations about expanding internationally.

By 2010, the company had mastered the art of creating country-specific expansion teams. These teams factored into their plans local languages, customer tastes, and (especially) tax regimes – aiming to adapt the Amazon model for each market.

It also invested heavily in distribution systems, giving it a logistical advantage against competitors like Rakuten or big box retailers like Walmart that were struggling to adapt.

So, with Amazon, expansion was driven by the need to maximize revenues. But the company developed innovative ways to conquer new markets. By leveraging local knowledge and being prepared to displace any local competition, Amazon has become a fixture in almost every country.

How expansion works: scale balanced with local specifics

All three of these companies exhibit different ways to expand, and all have been incredibly successful at doing so. But despite their differences, they have one thing in common.

Facebook, Netflix, and Amazon all base their expansion on in-depth awareness of local conditions while capitalizing on their immense scale. This combination has made them virtual monopolies in their sectors, and extremely hard for newcomers to topple.

 

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