So, you want to grow your business. You have maxed out of the current market, and have already expanded across your country. What’s next? You, your Board or Senior Execs might be asking? Why not look at expanding internationally. And yes, that includes expanding your business and/or service offerings in the US.
International market expansion is the means through which many businesses are continuing to add value for their customers, while also improving the bottom line. International market expansion requires more than your typical business development strategy of identifying a country, registering the business, finding clients and off you begin. Before anything else, international market expansion requires thought. When a business is operating successfully in a local and/or national market, it becomes accustomed to and familiar with the cultural element of that market, the potential customer base, its competitors, the rules and regulations for successfully operating the business in that chosen market. Furthermore, companies quite often enter a new local or national market as a way to either keep up with or staying ahead of the competition.
International market expansion on the other hand requires thought…A lot of thought, planning, research and testing; prior to fully establishing and operating a successful foreign office in a chosen international market. The first thought process for the business must be to determine if the timing is right to expand internationally. What are the motives for this international expansion? Has the business truly exhausted all likely and potential clients in the current market? If so, are there rural areas that the business could expand into, to widen its customer base? Parallel to this thinking process, the business must also begin to research international markets that will be open to its services, products and offerings. Once those international countries have been determined, it must then research the size of the potential market. Will there be sufficient clients for your products? For how long?
Next, as a group, the business decides that international market expansion makes sense. So, now that you are ready to take the leap, what should you do?
The following are steps that, once engaged by a client, Phasis Consulting would take to help you with the international market expansion. Of course, each business is different and has specific requirements, but in general, we hope these will help you as you think about ways to expand and grow your business abroad.
- Country Analysis
Your Board and Executives must determine the reliability of the country. This research provides you with insight about:
- Political and judicial system
- Taxation and excise
- Market Analysis
Determine the potential market size, the likelihood its product/service offering will meet a local demand for that market and who potential competitors are. Additional considerations should be given to finding a balance between what the business wants to offer and at what cost it should be offered.
- Cultural Analysis
Your business needs to understand and bridge the cultural differences between its Home Office and that of the country it plans to expand in. It’s imperative that the business understands and is respectful of the new country’s cultural norms in order to succeed.
- FDI /Monetary Analysis
It's important that as a business, you understand in general terms trade in/out of this country. It is important to expand to a country with growing FDI, as it makes raising capital to support your growth an easier task-though finding the investors willing to invest in your growth is independent of FDI.
- Regulatory Analysis
You must become very familiar with the legal and regulatory environment businesses operate under in that country.
- Entry Strategy
Evaluate the best strategy to expand globally. This initial research looks at recent competitors, regardless of size and how they entered that local market internationally.
Once the entry strategy is underway, there are many other steps to be followed, but that will be for another post. If you are serious about growing your business and expanding internationally, contact us. We’d be happy to grab a coffee and learn more about your business, then develop a unique plan for your international market expansion that will see you succeed and add more profits to your bottom line.