Why
International?

Expanded Customer Base

The U.S. represents roughly 17% of global consumer demand⁽¹⁾. This means if you sell only to the US market, you are addressing a small portion of potential customers. Focusing solely on your domestic markets leaves significant potential untapped. The top 40 European companies generate an average of 70% of their revenue outside their home markets⁽²⁾. Large corporations like Patagonia, Lululemon, and Microsoft generate more than half their revenue outside the U.S. Almost 40% of Ford and GM’s sales are international, while nearly 75% of Uber rides occur outside the U.S. Even Yum! Brands (Pizza Hut, KFC, Taco Bell) generate over 50% of revenue from international markets. Smaller firms have also found success abroad. Companies such as Osprey, OXO, Hydro Flask, Ruffwear, Stance, Black Diamond, PopSockets, Spindrift, and many other US-based companies generate substantial revenue from overseas customers.

• (1) Brookings Institute, 2020
• (2) Bain & Company, Inc.

Share of Global Consumer Spending

Market Diversification

A geographically diverse customer base is a buffer against localized economic downturns. For instance, during the 2008 financial crisis, when U.S. GDP contracted by 2.5%, China's economy grew by 9.7%. Companies with a global presence are better positioned to weather a storm -whether economic, competitive or due to changes in consumer behavior- in their home market.

Product and Market Insights

A global presence can help drive innovation. International operations provide valuable insights into global trends and consumer preferences, which can inform product development and marketing strategies. A McKinsey study found that companies operating in multiple countries were 1.7 times more likely to introduce new products or services than those focused on a single market.

Economies of Scale and Partnerships

A larger customer base enables efficiencies in manufacturing and operations; a manufacturer with a global consumer base has significant competitive advantages over a national hero. Netflix, for example, spreads content production costs across a global subscriber base, allowing for higher-quality productions and more competitive pricing. Nearly 60% of its viewers are located outside the US and that part of its business is growing faster than in the US. Ford has a variety of strategic partnerships and owned operations across Asia, Europe, and Latin America.

Competitive Positioning

Engaging in foreign markets can help defend against international competitors entering your home turf. When Japanese automakers began gaining U.S. market share in the 1980s, companies like Ford (where today 40% of sales are international) responded by increasing their presence in Asia, gaining valuable insights and economies of scale.

Increased Business Worth

Companies that sell in multiple countries and have diverse geographical revenue streams are viewed more favorably by investors. A Harvard Business Review study found that U.S. companies deriving at least 30% of their revenue from international sources had more than double the return for shareholders over 10 years compared to those selling only at home. This is due to their diversified revenue streams and proven ability to compete globally. Such firms demonstrate scalability, reduced risk in further expansion, and established infrastructure to seize global opportunities. This adds up to greater value for an investor.