In a context of highly competitive and increasingly dynamic international markets, companies can find in innovation a key factor for successful growth in foreign markets.

Innovation can be pursued through the optimization and reconfiguration of business in areas such as production, distribution, and sales, in order to significantly increase the operational efficiency and marketing effectiveness of the company, and elevating its overall competitiveness in domestic and international markets.

Such a plan is triggered by simply reviewing the supply chain from an international perspective. How? By looking at foreign markets as a 360° source of assets, not simply in terms of potential revenue, but in terms of local available human resources, suppliers and partners, and tackling all processes within the company in areas such organization, transformation, communication and distribution.

The world as a source of assets for the company

Often the company lives and grows in its original market and starts to consider foreign markets with a sales perspective, traditionally in terms of potential for its own export. However, to associate with international markets exclusively for their customer base causes the entrepreneur to ignore the broader opportunities the same markets can provide for the company. As a matter of fact, it is possible to increase competitive advantage by assessing the value chain in order to create economies of radius of action, acquire new resources and skills, and ultimately, increase turnover.

To give an example, the entrepreneur endorsing this vision, alongside the classic question “How can I sell in the export market?” poses himself questions such as:

• Are there resources (products, materials, know-how, technologies) that I can draw from international markets?
• What if I delegate entire business functions or activities to local providers abroad?
• Can I manage a partial transformation of my products in the targeted export market?
• May I open a warehouse far away to distribute my products across multiple countries?

By these questions, the entrepreneur starts to see the international market as a resource for the entire supply chain of the company (suppliers, partners, processes, functions, technology, human resources), envisioning, visually, its positioning and tracking the operators upstream and downstream on the value chain, a necessary step to review the current operational and commercial activities. As example, the following graph shows the case of a manufacturing company that sources its materials and components from providers and resells its products to national / international distributors.

«Provider» as supplier of	«Distributor» as mediator	«Reseller» as buyer
• Products and raw materials • Technical and management know-how • Company activities / functions	within the chain, purchasing and reselling the Company products	displaying and promoting the products to the end customers/users

The definition of its position in the supply chain should be performed at the level of the individual Company’s internal functions (highlighting all the activities managed by the staff versus those ones outsourced, known as “make or buy” activities). This is a good starting point to enter the topic of this article: the business innovation pursued in enhancing the supply chain internationally.

The strategic shift in the supply chain

Once the position in the value chain has been fully cleared, the company has two directions to trigger the innovation: review its operations by widening the analysis of resources available across international markets, and adopt trade policies moving its presence as close as possible to the end customers of its products.

«Widening the upstream chain»	«Shortening the downstream chain»
Assessment of the suppliers, the sources of research, the outsourced services and management tools in light of opportunities arising from international markets	Increase of the direct control and coverage of the foreign sales channels with the purpose of getting closer to the end customers

Operations – upstream chain: while by definition, the company has grown by acquiring resources in its geographical area, it is today increasingly easy even for start-ups to buy products or services, if not entirely outsource some business functions, from players residing in distant markets. Many factors might be considered at the base of a similar shift: the increasing mobility of people, the exposure of intercultural exchange among populations, globalization in communication platforms, thanks to the great impetus of digital technologies. The next graph shows an example of international sources enabling the optimization of a company’s operations, leveraging resources and knowledge conveniently accessible and available in the foreign markets from raw materials, technology and services.

Commercial – downstream chain: Now, every company has business activity and a business model which determines more or less its position in the downstream value chain, in other words more or less its proximity to the “end-customers”. The interaction with buyers and users of the product / service has many advantages, such as the control of sales performance, the collection of feedback, speed in fine-tuning the proposal to changes in terms of clientele preferences or new requirements, and acquisition of competitive differentiation through branding policies. The distance from their audience can be measured by the number of intermediaries. As an example, we use an internal classification used by GruppoBPC International, tracing the following actors performing different roles and activities (sometimes merged) in international trade.

We must however point out that, even if the graphs shown above represent the chain along a line (an ease representation, consistent with the classical representation of the economic doctrine), just the enlargement of the chain and the “geographic dispersion” of the operational and commercial activities of the company recommended a more accurate representation at the network level. In fact, the expansion of the “business network” company on international markets (both upstream and downstream) increases the flexibility and interconnection between suppliers, customers and partners from multiple locations and contact points.

The opportunity to reconfigure the supply chain in the international context has been always possible for a company, but has traditionally been difficult to implement. In recent years the framework has changed dramatically, and countless opportunities have emerged even for small businesses, thanks to factors such as new information technologies, the increase in global trade, and the higher mobility of people and resources.

Let us focus now on a strategic vision and action plan: how does one implement effectively this transformation? The company might start from the analysis of its workflow processes, the explanation of the sources of all its assets, and the classification of its management tools, in order to understand whether and how to change its business model and therefore the current actors in the chain (suppliers / distributors / clients).

The implementation of the plan addressed to reconfigure the supply chain plan is often possible thanks to the significant contribution of the emerging digital technologies, allowing the transformation of the structure into intangible assets and the automation of a large part of the management processes and company activities.

However, it is important to emphasize that the plan does not imply a simple digitization of most of the physical tools, but the re-assessment of the whole processes leveraging the opportunities offered by the digital technologies during the reformulation of the company physical assets.

The convergence of these two areas ensures the maintenance of the mutual channel advantages minimizing their weaknesses, strengthening the company’s competitiveness in the market and reducing the barriers to its growth over the international markets.

ADVANTAGES OF PHYSICAL CHANNEL (EX.)	ADVANTAGES OF DIGITAL CHANNEL (EX.)
Sensory experience Relationship capacity Enhancement of the company proposal Sales support effectiveness	Speed and transparency in the communication Evaluation and purchasing simplicity Wide user audience and customer base Broad marketing interaction

By pursuing these goals in the reorganization of the supply chain, the company achieves a two-fold effect:

1. Enhancing competitiveness (reducing costs, optimizing processes, improving its proposal, innovation)
2. Increasing sales efficiency (reaching greater knowledge of the market, monitoring and understanding effectively the contextual factors, developing the company communication and brand visibility, managing the physical distance with higher control of the market)