Tuesday, April 23

How To Decide if Your Company Should Leave the Market in a Given Country?

In a perfect business world, no losses are ever made, and the growth continues uninterrupted on all fronts, regardless of the situation. Unfortunately, this is not quite the case in the reality we all live in. Truth to be told, business setbacks are a common occurrence and, in some instances, can even result in your company having to leave the country to survive elsewhere. 

But how to make such a decision? After all, the markets are unpredictable, and the situation may yet turn around. According to Continuity2 – BCMS provider, there are some clear indications of when it would be better to leave the given country instead of continuing your operations there.

First of all, you might have gravely misjudged the demand for your products or services in said country. Moreover, it is possible that the government passed unfavorable business laws or that it’s no longer profitable to operate here. Finally, it may simply be that the country you’re leaving is in direct opposition to the values of your business or is experiencing political instability. 

Explore the advice below and learn when leaving a market in a country becomes a viable solution!

A Lack of Demand for Your Products or Services

The first reason why you might want to leave a country is a lack of demand for your products or services. Maybe the customers in the given country have no need for your goods, and it attracted the interest of only a specific group of people. To illustrate the point, promoting cloud computing services in a country where most citizens don’t have steady access to the Internet is not the best business decision.

It’s not that your service is low quality; it’s that aside from a few lucky ones, most potential customers lack the prerequisites to make full use of your services and therefore have no demand for them. 

Another thing is that there might be a local equivalent that offers the same thing as you do, and natives are more open towards this domestic business. In such a case, if you fail to secure a sustainable share of the market for yourself, leaving it altogether may be the better option.

Unfavorable Changes in Governmental Regulation

When entering a foreign market, the country’s government may enact regulations that directly affect your business. You must abide by them because otherwise, you might face potential legal problems and lose credibility with your customers and partners.

As the law concerning foreign businesses may change, you must pay close attention to any alterations in regulations as some of them might be unfavorable for your operations in the said country. For instance, a sudden increase in taxation can result in your company having to leave the market if you cannot bear the burden of additional financial responsibility. 

It’s No Longer Profitable to Operate in a Given Country

You should also consider leaving a country when you’ve calculated that the profits you could make there are no longer worth the effort. You may have previously made a lot of money in said country, and the revenue was enough to cover your expenses and even turn a profit. 

However, now the situation has changed. Perhaps the recession hit the country so hard sustaining your operations on any viable scale is no longer an option. Or new competitors entered the market and are now undercutting you price-wise too much to adapt. 

Regardless, if you’ve calculated that the revenue the country would generate for your business is not enough to cover your expenses and make a profit, then it’s time to move on.

The Country is Opposed to Your Business’s Values

Even if a country is otherwise lucrative, you may still want to leave it and operate elsewhere. This may be the case if your business is inherently opposed to the core values and principles of the given country. 

For instance, if your business relies on offering equal rights to all its employees regardless of their gender, then staying in a country that does not offer such rights or where women are widely discriminated against might be not worth it, especially if it were to damage your reputation.

You should also consider leaving a country that actively supports any form of hatred and violence. For example, if the said country supports an unjustified armed conflict or breaks human rights, you might not want to contribute to its economy.

The Country Is Suffering from Severe Political Turmoil

Finally, you might decide to leave a country if there is severe political turmoil, and it’s unlikely that the situation will settle down anytime soon. You could have been doing business in said country for years, but if the economy is shaky and everyone is trying to get out as quickly as possible, it’s time to think about your company’s survival. It is not worth the risk of being stuck in a country where the economy is so bad that your money and assets won’t be safe. Sometimes it’s better to leave when you still can!

In Conclusion

Not all businesses are meant to be global, but even the ones that are cannot be profitable at all times. If you’ve found that your business has no future in a given country, it might be better to leave than continue operating there and lose money.

After all, you can always find new customers elsewhere, no matter where you are. The world is a big place, so don’t focus on the loss of opportunities and profits in the country you’re leaving – instead, think about the losses you’ll prevent and see the whole situation as a new chapter in your company’s history. Good luck!

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