The Best Five Minutes You’ll Spend Today: Top Tips on Choosing an International Market
Are you are small or medium-sized business with aspirations to grow? If you are, then you might be considering international expansion or exporting your product (or service) overseas. Obviously, there are lots of countries you could target, but how do work out which is the right one for your international market entry strategy?
Don't be an opportunist
Don't be an opportunist, for starters. Plan where you're going to expand to, don't just snatch at the first proposition that comes along.
If you've been in business a while, the chances are you've been contacted out of the blue by a customer in an overseas location who wanted to place an order with you. Before you rush to fill it and before you start dreaming about becoming a market leader in that country, take the time to work out whether your offering really belongs in that market and whether going there really fits with your company's broader strategic priorities. If not, don't waste your time, especially if there is no indication that the initial, random order is going to turn into anything more permanent.
Don't trust your gut - especially if you're just starting out
Too many companies trust "gut feel" to guide them as they put together an international market entry plan. While this might be ok if you're a seasoned player in international markets, it can be a disaster, especially if you've never operated outside your home market before. Let me give an example.
I recently worked with a company that was building its entire internationalisation and export strategies around selling into China. The product was a fresh one and the rationale for going into China was:
"We know China is a huge market and we know that its middle class is growing rapidly. We know that the middle class wants premium products and doesn't trust domestically produced food. We will sell our premium fresh food into China and exploit that market."
So far so good. The statements above are true and on that basis, China seems like a prime market for foreign food producers. So, the company had decided that it would target China to the exclusion of other overseas markets. What its leadership team failed to appreciate was that there was no market access to China for the products it was producing, and it had no way of selling the products in the Chinese market. So that was the end of that expansion strategy.
90% of the time, unless you already know the market that you plan to go to back-to-front, more research and less reliance on what seems intuitively to be the right answer will save you time, energy and money.
Do your research
Nothing, apart from spending a lot of time on the ground, will give you a better idea of whether a new country is the right market for your company. Research is not fun, it's not sexy, but it is vital to success overseas. There are lots of things that you'll need to research and market size, segmentation and market trends are right up there with the most important items. So is research on competitors and relevant regulations.
If you hate research, don't know where to start, or don't have time, get help from the experts. Include conversations with people who have already tried operating in the market you're planning to enter as part of your research. Hearing first hand what has worked and what hasn't can be gold.
Once you've done enough research to verify that the market you want to enter seems to be the right one, visit. Don't try to do much business on the first visit, just go there and make sure that it is somewhere you will enjoy working and that you like interacting with the people. Use the time to set up more meetings and conversations, to confirm and enrich the information that you've gotten through desk research. Get comfortable and connected with the locals. Then start.
Do you feel ready to chose your international markets? Are you keen to start crafting a strategy to expand internationally? Visit the Global Entrepreneur Awards for your chance to win a fully-funded, 12-month place on our International Business Accelerator - valued at $13,800! Entries are now open so apply today!!