International negotiation : what are the stakes ?
Thanks to globalisation, many companies, both public and private, are expanding their activities in foreign countries in order to grow their business and expand internationally. In the context of these activities, it is essential to master the art of negotiation in order to convince stakeholders to adhere to the organisation’s objectives. This skill is often underestimated, even though it is essential, especially for start-ups wishing to develop their activities abroad. But what are the objectives of international business negotiation?
What is international business negotiation ?
Commercial negotiation is nothing more than a communication tool bringing together a set of approaches aimed at confronting the points of view and professional interests of two distinct organisations. The aim is to reach an agreement between the parties involved. When this agreement involves stakeholders from different countries, we talk about : international trade negotiation.
Objectives of international trade negotiation
International trade negotiation is a complex decision-making process due to the sometimes divergent interests of the parties involved. Nevertheless, in order to reach a common agreement, it is important to understand its major objectives in order to be well prepared before the final phase of the negotiation.
1) Management of an international business development strategy
Before getting into international trade negotiations, it is crucial to decide in advance on the strategies that will be deployed for the internationalisation of the company’s activities. The following questions should be asked:
– In which country should the company set up in?
– What are the environmental challenges (political, economic, social, technological, legal)?
– What type of competitive advantage is appropriate for the target market?
– What will be the modes of market penetration?
2) The development of an international commercial strategy
Then, it will be necessary to develop an adequate commercial strategy based on a market study carried out beforehand on the location ground. Indeed, the turnover or growth objectives and the means of implementation will serve as solid arguments to convince during international commercial negotiations.
3) The development of a portfolio of international clients
The main interest of entrepreneurs in international outsourcing lies in the opportunity to conquer new foreign clients in order to develop their turnover on the one hand, and to boost the reputation of their products or services abroad. Therefore, it is vital to master the language and culture of the players with whom one is negotiating in order for international commercial negotiations to be successful.
4) Management of an international marketing strategy
In terms of marketing, negotiating with international collaborators allows the company to benefit from local support for the launch of new products and the optimisation of their visibility on the market. Indeed, starting up in a foreign market ideally requires the experience and know-how of local players who are perfectly aware of the needs and expectations of their market.
In this way, the investments made in product development, market pricing, distribution methods and communication efforts implemented for its marketing will not be in vain.
5) Optimisation of international purchasing processes
The acquisition of foreign raw materials is also one of the important issues in international trade negotiations. The management of the international supply chain, the procurement process, and transit, among others, must be carefully studied in order to convince the other party during the negotiation process.
6) International project management
To gain a foothold in the international market, companies are planning various international projects. However, these projects cannot see the light of day without the agreement and partnership with foreign players for financing, the provision of various material and human resources, the legalisation of the contract, etc. This aspect of international commercial negotiation is even more fundamental for startups which want to begin the internationalisation process.