How to Design A Globalization Strategy For Your Business 

For growing companies, a globalization strategy still offers the potential for new revenue streams, more diverse talent pools and, perhaps most importantly, sustained long-term growth.  

But in 2025, expanding your business across borders has become harder. The margin for error is greater, the consequences of getting it wrong more serious.  

No business leader sets out to fail. A globalization strategy might start with the best intentions.  

You hire your first team in Germany, only to find out too late that engineers cost 35% more than budgeted, and your offers fall flat.  

You set up an entity in Brazil before proving market demand, and soon you’re tied into tax, compliance, and admin costs for a business that isn’t delivering.  

By the time you move on France, delays in incorporation mean your key hires can’t start for weeks, stalling momentum just as you need it most.  

And while all this unfolds, different countries are running their own payroll processes, duplicating work, confusing reporting, and quietly inflating costs year after year.  

This might sound chaotic. But this is still the flawed playbook that many globalizing businesses are using.  

It’s crucial for a globalizing business to choose the right markets in the right sequence, based on data, context, and long-term viability.  

To expand successfully, it’s essential to have a globalization strategy that works commercially, legally, and operationally from day one.  

In this article, we’ll explore how to build the foundations of your globalization strategy. We’ll explain the cost of getting your strategy wrong, and the core components of building a strategy that will help you expand in the right way, at the right time.  

Why you need a globalization strategy  

It may seem strange, but recent history is littered with examples of multinational companies that failed to do this properly.  

Take the example of Walmart. In the late 1990s, it attempted two major expansions – one into Germany and one into Japan. Famously, both these expansions were unsuccessful because Walmart failed to consider local consumer preferences and business norms. 

Similarly, Nokia’s expansion into India is a noteworthy example of a company encountering hidden tax liabilities in its international operations. 

These expansions failed because the companies in question made one simple, foundational mistake – they failed to undertake proper market research, salary benchmarking, and skills analysis.  

Let’s take a closer look at what the stories of Walmart and Nokia can teach other companies about the risks of getting market research wrong.  

Underbudgeting salaries in key markets

Let‘s say you plan to build a team in Germany, only to discover that engineers cost 35% more than expected and your pay offer isn’t competitive.  

Companies often overlook these hidden costs and the cultural expectation for comprehensive benefits packages, leading to budget shortfalls that can derail entire expansion timelines and force difficult decisions about team size or market entry strategy. 

Expanding where the skills don’t exist

Your business decides to open an entity in Vietnam, based primarily on cost. But you later realize the specific talent pool you need doesn’t exist locally.  

Companies may find themselves competing for a small pool of qualified candidates, driving up costs and creating retention challenges. 

Choosing markets with unexpected employment risk

You hire contractors in Spain, unaware they qualify as employees under local law. You face back pay, penalties, and must reclassify urgently. 

The situation becomes more complex when labor authorities or tax agencies initiate investigations, potentially exposing the company to criminal liability for social security fraud.  

These legal entanglements can damage your company’s reputation in the market, create ongoing compliance burdens, and generate costs that far exceed any initial savings from using contractor arrangements.  

How to build a globalization strategy that works 

You can’t afford to treat international expansion as simply a matter of finding the cheapest labor or the largest customer base. Building a successful globalization strategy means moving from reactive decision-making to proactive use of market intelligence.  

This ensures you’re making the right, strategic decisions (and ensures you’re not having to suddenly reverse course later).  

Make market intelligence a key capability of your business 

Market research should not be treated as a preliminary checklist item but as a core business discipline.  

When companies invest in the capability to gather, interpret, and act on international market intelligence, they move from trial-and-error expansion to building durable competitive advantages.  

The result is not just entry into new markets, but expansion that creates long-term value rather than expensive lessons. 

Looking beyond cost when assessing markets 

Salary comparisons are often the first data point companies reach for, but base wages tell only part of the story.  

Real employment costs also include statutory benefits, social security payments, pensions, and even cultural expectations around compensation packages. 

The same level of care is needed when assessing skills. It is not enough to know that a country has engineers or marketers.  

The question is whether the available talent has the right industry experience, educational background, and familiarity with the tools or regulations your business depends on.  

You also need to ask: how easy is it to attract and retain this talent, and how competitive is the local market for the same skills? 

Understand legal & operational realities  

Choosing the right market is as much about legal and operational fit as it is about demand.  

Regulatory systems differ widely in their complexity and efficiency. Employment law, tax rules, intellectual property protection, data privacy obligations, and contract enforcement all shape how smoothly you can run your business in any given market.  

Operational infrastructure matters too. Reliable banking, accessible real estate, robust digital networks, and supply chain links are not “back office” details — they’re your strategic enablers. If they are weak or costly, even the most promising market can become unworkable. 

Assess & test markets before you grow 

Rushing into a market by setting up entities, signing leases, or hiring large teams without proper research is one of the costliest mistakes a company can make.  

Exiting a market, dealing with legal disputes, or restructuring operations usually costs far more than conducting thorough due diligence up front. 

So don’t forget that lower-risk options exist. Pilot programs, partnerships with local firms, or phased entry strategies allow companies to test assumptions before committing at scale.  

This approach turns global expansion from a gamble into an evidence-based process, ensuring that your company is realizing its growth potential long-term.  

Putting it all together: 4 essential components of your globalization strategy  

Hopefully, you’re beginning to get an idea of the mindset and preparation necessary to making your globalization strategy successful: market intelligence, a willingness to look beyond cost, an understanding of legal and operational realities.  

But how does this approach translate into an actionable strategy?  

Salary benchmarking 

Global pay is no longer a matter of pulling numbers from a salary survey. Companies need a granular view of compensation for each role, seniority level, and location.  

 Modern benchmarking means looking beyond base pay to include stock options, pensions, professional development budgets, and culturally expected perks.  

Understanding which elements local employees value most, whether it’s security in Germany or equity upside in Singapore, helps companies craft packages that attract and retain the right people. 

Market selection  

Choosing a market for expansion is not just about where the customers are. It’s about finding the right balance between available talent, affordable compensation, and manageable regulation.  

This requires comparing local hiring costs with skill availability, and aligning them with the realities of employment law, tax, and compliance.  

For example, a city with a strong developer community may look attractive, but strict labor laws or heavy tax burdens could erode the advantage.  

A structured comparison across markets helps decision-makers avoid being swayed by headline savings and instead build strategies that will stand up over time. 

Global skills analysis 

Counting how many engineers or marketers a country has is no longer enough. A real analysis asks where specialist expertise is located, whether local universities are producing the right graduates, and how easily people can move between industries and borders.  

Remember that some skills are highly clustered. For example, enterprise-grade cybersecurity is more likely to be concentrated in a few Eastern European hubs, while advanced biotech may be concentrated in specific US regions.  

Companies need to predict not only where the right skills are today, but where they will emerge or diminish over the next three to five years. This foresight allows expansion decisions that meet today’s hiring needs while safeguarding future growth. 

Contractor misclassification: managing hidden legal risk 

A fast way into new markets is often through contractors. But treating workers as contractors when the law considers them employees creates significant liability: fines, back taxes, and reputational damage. 

 Each country applies different tests to determine employment status, from control over working hours to the provision of equipment.  

A contractor audit can help your company identify risk areas, correct misclassifications, and put compliant structures in place. Addressing this early prevents costly disputes and protects the flexibility businesses rely on when entering new markets.  

Every global expansion starts with one question: where does it make sense to grow?

We help you answer that with hard data — not guesswork. From skills analysis to contractor classification, our research services give you the clarity to move forward (or hold back). 

Get in touch if you’d like to learn more about how TopSource can make your globalization strategy a success.